Many Americans are wrong about key economic trends. Take this quiz to test your knowledge.
Americans have been notoriously glum about the country's financial outlook in the post-pandemic years, with only one-third describing the economy as good in a CBS News poll earlier this year.
But increasingly, there's a gap between how a large portion of Americans think the economy is performing and what key indicators show — a dissonance that some describe as a "vibecession." In part, this disconnect reflects the limitations of economic measurement, which often doesn't capture the financial realities facing millions of Americans.
That said, when asked about key economic trends and data, upward of half of Americans are getting the facts wrong about some basic financial issues, according to a new poll from Harris/The Guardian.
Think you have an accurate read on the state of the U.S. economy? Answer the following four questions to find out.
Is the U.S. in a recession?
A) Yes
B) No
Answer: The correct answer is B. As commonly defined by economists, a recession is a slump in economic activity, or when GDP is negative. As the GDP has been growing — fueled partly by strong consumer spending — at rates that have exceeded economists' expectations, the U.S. economy is not in a recession.
What Americans believe: About 56% of those polled by Harris/The Guardian said that the U.S. is currently experiencing a recession.
How has the S&P 500 index performed in 2024?
A) Stocks are up for the year
B) The stock market is down for the year
C) The market is unchanged
Answer: The correct answer is A. The S&P 500 — a proxy for the broader stock market — has climbed 11% this year.
What Americans believe: About half of people polled by Harris/The Guardian said the stock market is down for the year.
How does the current unemployment rate compare with prior periods?
A) The unemployment rate is now near a 50-year low
B) The unemployment rate is near a 50-year high
C) The unemployment rate still hasn't recovered from the pandemic
Answer: The correct answer is A. The jobless rate stood at 3.9% in April, near a 50-year low. Current unemployment numbers are also similar to levels experienced prior to the pandemic, indicating that jobs lost during the crisis have been recovered.
What Americans believe: About half say unemployment is near a 50-year high.
Is inflation increasing or decreasing?
A) Inflation is rising
B) Inflation is falling
C) Inflation isn't changing
Answer: The answer is B. Inflation, which measures the rate of change in prices, has been declining since reaching a peak of 9.1% in June 2022. In the most recent CPI reading, inflation was 3.4% in April.
What Americans believe: About 7 in 10 responded that they believe inflation is rising, the Harris/Guardian poll found.
Are prices still rising? Yes. Although inflation — the rate at which prices are changing — is falling, prices are still moving higher. The decline in inflation simply means those price increases are moderating from the large increases experienced in 2022.
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Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
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