Is the economy good or bad?
Surveys indicate people are almost equally divided on their views of the economy. About half are optimistic, and half are pessimistic. Is there a logical explanation? N.C. State University economist Mike Walden responds.
“I see this when I give talks all around the state: Some people are very upbeat about the economic future, and others are not. And I think it’s because if you look at the economic data — now, people don’t look at this, but I think they have a sense … — you see a divide. You see, for example, on the plus side, we have regained all the payroll jobs that we lost during the recession here in North Carolina, but on the other hand if you count as unemployed the people who have stopped looking for work as well as people who are working part-time because they can’t find full-time work, the unemployment rate is still at double-digit levels.
“Also, since the job market has been improving, about half the news jobs are paying above the average wage. So people who are getting those jobs are probably pretty happy, but half are below the average wage. So those folks may not be as happy.
“And then one last economic statistic: If you look at where consumer income is spent and you categorize some spending as necessities — spending on things like food and utilities, medical care, gasoline — you see that lower-income households are actually spending a bigger percentage of their income today on necessities than they were previous to the recession, whereas it’s just the opposite for higher-income levels. They are spending less on necessities.
“So I think the fact that we have these economic statistics going in different directions really is the reason behind the divide we have on the outlook for the economy.”