The numbers were good, but feelings were bad: The US economy in 2024
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Despite the recent political dysfunction in Washington, the U.S. economy is ending this year on a high note. Inflation is down. Real wages are up. New figures released last week showed that GDP grew at an annual rate of more than 3% in the late summer and early fall.

The Economist magazine has called the United States' performance, quote, the envy of the world, and Federal Reserve Chairman Jerome Powell says he hears regularly from foreign counterparts who wish their own countries were doing this well. The U.S. economy has just been remarkable. In these international meetings that I attend, this has been the story, how well the U.S. is doing. If you look around the world, there's just a lot of slow growth and continuous struggle with inflation.

But even as the U.S. is outperforming most other countries, many Americans remain frustrated by the high cost of living. Two-thirds of the people who responded to an Associated Press survey this month described the U.S. economy as poor. Sydney Siner is a retired autoworker in Lynchburg, Virginia. I just think people are working harder than ever. I know both of my sons and my daughter-in-laws. Everybody's working as absolutely...

hard as they can. They're clipping coupons, they're saving money. They are not farther ahead than my husband and I were 30, 40 years ago. President-elect Donald Trump told NBC this month that the high cost of groceries was a key factor in this election.

Since the presidential vote, Republicans and Democrats have flip-flopped in their views about the economy. Most Democrats now expect a downturn in the new year, while Republicans like Teresa Wolf are increasingly optimistic. I think that we are in the right direction just because we have hope.

Consider this. Donald Trump will soon take the reins of an economy that has bounced back strongly during the four years he was out of office. For many families, though, that rebound was overshadowed by soaring prices for food, housing, and other necessities. Dissatisfaction with those prices gave Trump an opening to recapture the White House. Will his policies bring costs down or rekindle inflation? From NPR, I'm Scott Detrow.

It's Consider This from NPR. By most objective measures, the U.S. economy is in good shape. Employers added about 2 million jobs this year. Unemployment is low. In much of the country, gasoline is now selling for less than $3 a gallon. Other prices are still elevated, though, and that has fueled a lot of unhappiness and also a political comeback for Donald Trump.

We're going to talk through some of the economic facts and feelings about the year ending and what is ahead with NPR's Scott Horsley. Hey, Scott. Hi, good to be with you. Let's start here. A survey from the University of Michigan last week showed that Americans' attitudes about the economy are improving, but they are still not great. So what's going on? Yeah, by most objective measures, this is a really good economy. But people who are struggling to keep a roof overhead or put food on their table are

just don't necessarily feel that way. Reporters like me can talk all we want about strong GDP growth or the near record number of women in the workforce, but to people like Teresa Wolf in Tampa, that just sounds out of touch. The facts are, if inflation was where it should be and food prices had come down and rents are under control, honestly, I don't think there's any way that Trump would have been reelected.

Of course, Donald Trump did win the election last month, and polls suggest voters' unhappiness with the economy was a big part of that. So here's where we are. Inflation has come down, but with the exception of things like gasoline, most prices still haven't fallen. Is that a big reason why people are still grumpy? It is, yeah. Inflation has cooled off considerably, but that just means prices aren't going up as fast as they had been. It generally doesn't mean prices are coming down.

And grocery prices are a particular sore spot. Even though they haven't gone up much this year, they went up a lot in the two previous years. I talked to Cindy Siner as she was on her way to the grocery store in Lynchburg, Virginia. I think that groceries stand out the most just because we're always at the grocery store and you have to eat. In the nearly four years since President Biden took office, grocery prices have jumped by a cumulative 22%.

while average wages have risen only about 19%. So Federal Reserve Chairman Jerome Powell says he gets why people are unhappy with that. We understand very well that prices went up by a great deal, and people really feel that. And it's prices of food and transportation and heating your home and things like that. So there's tremendous pain in that burst of inflation that was very global. This was everywhere in all the advanced economies at the same time.

Now, that worldwide spike in prices was primarily caused by fallout from the pandemic and Russia's invasion of Ukraine. But here in the U.S., government spending likely contributed a bit as well. The good news is wages are catching up now. Average wages have been going up faster than prices for the last 19 months.

And with inflation cooling off, workers' real buying power should continue to grow. But it's not just high prices. It's also high interest rates. Yeah, that's right. The Federal Reserve raised interest rates a lot to crack down on inflation. And while they've now begun to lower those interest rates, borrowing costs are still a lot higher than they were a few years ago. And that's really a double whammy for anyone trying to buy a house or a car or some other big ticket item.

Teresa Wolf sells appliances for a living, and a lot of her customers have to finance those purchases. When the average interest rate on a credit card is more than 20%, that can be really costly. I meet the ordinary people all day long. Those are who I deal with, and all I hear is complaining how hard it is. That's especially true for lower-income families. Three-quarters of the people earning less than $50,000 a year say the economy is poor.

And even among people earning twice that much, there's a lot of dissatisfaction. You know, Ellie Currence lives outside Kansas City and has a young daughter. She and her husband would like to move to a better school district. But Currence told me that just feels like a pipe dream right now. It's just hard. I work full time. My husband works full time. You know, I feel like at this point we're moving more towards survival mode rather than thriving. All

All right. So, Scott, key question going into 2025. Does President-elect Trump have a solution for any of this? Not really. His main prescription for lowering prices is to increase domestic energy production. But, you know, that's already at a record high.

And economists say some of Trump's other policy proposals could actually push prices up. Congressional forecasters say the tariffs that Trump talked about would raise prices, especially for lower-income families. And mass deportations could also increase prices and make it harder for employers to keep adding jobs.

That said, Trump voters like Teresa Wolf are generally upbeat about what's in store. I spoke to her just a few days after the election, and she said her biggest feeling was relief. I am elated and I have hope. Many, many, many people I know are super excited. Even my daughter, who's a liberal, is a Trumper.

We've had enough. In the AP survey, almost seven in 10 Republicans said they expect the economy to get better once Trump's in office. On the other hand, six out of 10 Democrats expect the economy to get worse. This is basically a mirror image of what we saw four years ago. You know, the country is so polarized and so evenly divided, it's really hard to get agreement, even when most yardsticks say the economy's in good shape. NPR's Scott Horsley, thanks so much. You're welcome.

This episode was produced by Catherine Fink. It was edited by Courtney Dorning and Raphael Nam. Our executive producer is Sammy Yannigan. It's Consider This from NPR. I'm Scott Detrow.