Depressed Americans: The State of the Economy

I am reproducing another interesting update from the American Bankruptcy Institute:

ANALYSIS: AMERICANS REMAIN DEPRESSED DESPITE ECONOMIC GAINS

A rift is emerging between Americans' state of mind and the state of the economy, the Washington Post reported today. The economy is growing stronger, with the nation's gross domestic product growing at its fastest clip so far this year. The number of new people signing up for unemployment benefits has steadily declined, and consumer spending is rising. But by almost any measure, Americans remain unhappy. Consumer confidence has plunged to levels last seen during the financial crisis. A recent Nielsen poll found that nine out of 10 Americans believe the country is still in recession. "It's the hangover from the Great Recession," said James Russo, vice president of global consumer insights for Nielsen. "People feel the economy not at the macro level but at the micro level." This persistent pessimism has perplexed economists. Most of the time, our emotions and our actions move in tandem. But the gap between the two has widened since the financial crisis. Economists say something will have to give: Either Americans will perk up or, more worrisome, the recovery will conform to our low expectations. Lynn Franco, research director at the Conference Board, said consumers have been beaten down too long to be impressed by recent blips of economic good news. According to conventional theories, depressed consumers spend less money, slowing down economic growth and further eroding confidence in a vicious cycle of decline. Typically, our attitudes are merely reflections of major sectors of the economy, such as the job market or stock prices. But during changes in business cycles — from recession to recovery, for example — consumer confidence can provide a crucial nudge, said Mark Zandi, chief economist at Moodys.com. Read more.
Is the "recovery" a phantom recovery for many?  Does the data trumpeted by the media not reflect reality on the ground?

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