The US Isn’t in a Recession. But Many Americans Think It Is

Recession Illusion

Officially, the U.S. economy is not in a recession. Despite the post-pandemic stretch of historically high inflation, stringent interest rate policy by the Federal Reserve, and concerns over consumer spending, the economy is still growing. Why then, do a whopping 3 in 5 Americans believe the U.S. is currently in a recession?

Stark Sentiment

A traditional definition of a recession is two consecutive quarters of negative GDP growth. This hasn’t been the case since the pandemic recession, which was as extreme as it was brief.

But since then, the economy has been growing again. Nevertheless, many Americans believe a recession began in March 2023 and could last another year, according to a July survey from buy now, pay later company Affirm (AFRM).

The reason? More than two-thirds (68%) of respondents cited the rising cost of living and inflationary pressures, saying the current inflation rate is negatively impacting their financial health and goals.

Bad Vibes

The survey results are further evidence of what some have dubbed a “vibecession”, where the economy feels in a slump even though the data show otherwise.

It’s another strike against the bifurcated U.S. economy, in which wealthier households have an easier time existing and spending in their high cost environments, while less wealthy households struggle to make ends meet.

The real concern here is that consumers could start spending as though they’re in a recession, dialing back and delaying purchases, which would be bad news for economic growth.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

SOSS242072502