Why Americans feel so bad about a growing economy

Welcome to the “boomcession.”

The term is a portmanteau of the words “boom” and “recession.” It highlights how the average American doesn’t feel like they’re reaping the benefits of an economy that is — on paper — humming along, according to creator Matt Stoller.

Economic output and the stock market are surging, consumers are spending big and the post-pandemic recession that many expected never materialized. But many feel terrible about their finances, with debt at all-time highs, and the majority of Americans incorrectly believe the country is in an economic slowdown.

“Traditionally, the economy is doing really well,” said Stoller, an antimonopoly advocate and research director at the American Economic Liberties Project, a nonpartisan thinktank. “But ordinary people are saying they’re not.”

It’s thematically similar to the “vibecession,” a term popularized in 2022 to explain the disconnect between solid economic data and negative consumer sentiment readings exiting the pandemic. It can also draw comparisons to the “K-shaped economy,” a phrase illustrating how Americans can feel vastly different depending on their income bracket.

Stoller’s “boomcession” framework aims to bring awareness beyond opinion to the material financial hardships faced by those not in America’s uppermost echelons, he said. Once that’s contextualized, it’s easier to understand why many Americans believe the national economic engine they help power isn’t propelling them forward, Stoller said.

On its surface, Stoller said the “boomcession” theory can help explain why data in recent years shows that U.S. GDP growth hasn’t correlated with better consumer sentiment readings. That marks a significant break from the typical trend seen over the past six decades.

“I’ve never seen anything like it,” said Diane Swonk, chief economist at consulting firm KPMG. “I’ve been doing this for 40 years. And that’s a long time to never see anything like this.”

Helping drive that disconnect, Stoller and economists say, is the fact that inflation isn’t one size fits all. Consumers face different rates of price growth based on factors like their income class or geographical location, data shows.

Grocery and shelter inflation rose the most of any essential tracked by Morgan Stanley between 2020 and 2025. Those two categories made up a disproportionately high share of lower-income consumers’ spending in 2024, the bank found.

Lower earners historically see higher rates of inflation than their better-off counterparts, said Morgan Stanley economist Heather Berger. The inflationary gap widens when overall price growth is above the Federal Reserve’s target of 2% — as has been largely the case for the past several years, according to the bank.

This can’t be written off as a post-pandemic idiosyncrasy. The Atlanta Fed reported this year that food prices rose around 9% more in poorer areas than richer ones between the second quarter of 2006 and the third quarter of 2020. More grocers in underserved communities can increase competition and drive down prices, Stoller said, in turn helping lessen the inflation disparity.

“If you look at monopolization as a systemic feature of the American economy and price discrimination as a systemic feature of the American economy, then it’s not that hard to jump from there,” Stoller said. “The people who are happy are getting different prices than the people who are sad.”

President Donald Trump has pushed initiatives aimed at lowering prices for homes and pharmaceuticals this year. Trump claimed last month that there was “virtually no” inflation in the U.S. despite the latest data showing rates higher than the 2% annual level considered healthy by monetary policymakers.

Economists and investors are watching to see how affordability initiatives ramp up ahead of November’s midterm elections.

In the meantime, households feel less insulated than they did when pandemic stimulus programs rolled out in the early 2020s, said Elizabeth Renter, senior economist at financial education platform NerdWallet. Credit card debt hit a record high of $1.28 trillion in the fourth quarter of last year, according to data from the New York Fed released last week.

While high prices have been a perennial issue since the pandemic’s inflationary shock, consumers without financial safety nets have more recently focused their concern on the job market.

Economists have described the current labor backdrop as a “jobless boom” and “hiring recession.” Fed Chair Jerome Powell has dubbed it a low hire, low fire environment.

December job openings fell to their lowest level since 2020 despite the stock market rallying further, data shows. Because higher-income cohorts are more likely to own stocks, economists say that continued gains in these holdings can buoy economic confidence and pad consumer spending. Meanwhile, anxiety washes over the rest of the country as the labor market tightens.

“If you have the assets that are enjoying really high values, then you’re feeling supported,” said Joanne Hsu, director of the University of Michigan’s Surveys of Consumers. “But strong stock markets don’t mean a lick to you if you don’t own any stocks.”

Economic output by worker per hour broke out of its pandemic funk to new all-time highs last year, federal statistics show. But that may be bad news for employees: The boost can be taken as a sign that artificial intelligence is turbocharging productivity, which could encourage companies to whittle down headcounts.

Nike, Amazon and UPS announced large-scale job cuts this year. Layoffs surged more than 200% from December to January, according to consulting firm Challenger, Gray & Christmas.

So-called labor share, or the percentage of economic output trickling down to workers in the form of compensation, tumbled to new lows last year. What’s more, the gap between corporate profits and employee pay as a slice of GDP grew to its widest on record. Michigan’s survey of sentiment fell near all-time lows last year.

Strength in consumer spending despite the bad vibes helped the economy expand at a faster-than-expected rate of 4.3% in the third quarter of 2025. However, total spending is more driven than ever by the top 20% of Americans, according to a Moody’s analysis. Fourth-quarter GDP data is scheduled for Friday.

Last week’s nonfarm payroll report for January came in hotter than economists predicted, offering hope of stabilization in the job market. But those overall gains were mainly driven by the health care sector, which alone accounted for more than half of net growth.

Nearly three-fifths of Americans believe the U.S. economy is currently in a recession, which is widely defined as a period of multiple quarters with negative GDP growth, according to a Guardian-Harris poll conducted in December. That’s up 11% from a similar survey taken earlier in 2025.

A new survey from Snap Finance shared exclusively with CNBC shows just how much worse the outlook is for those at the bottom of the financial food chain.

Just around one-fourth of respondents called their current financial situations “unstable” or “very unstable,” per data released Wednesday. But that percentage shoots up to 41% for those with credit scores below 670 and 54% for people in households with incomes at or below $50,000.

Snap Finance polled more than 1,400 people in December.

That can help explain the growing skepticism of economic data from the government. YouGov found fewer Americans trusted federal reports on the economy than didn’t in August of last year, a reversal from a few months prior. Trump fired former Bureau of Labor Statistics Commissioner Erika McEntarfer in August, implying that the agency was manipulating labor market data under her leadership.

But NerdWallet’s Renter cautioned against concluding that these reports — which are meant to be aggregate readings — aren’t necessary if they don’t match how an individual feels. These national data sets can help ensure, for example, that economic grants are appropriately allocated, she said.

“Multiple experiences can be true,” Renter said. “The economy can be doing quite well, and millions of people are pretty uncomfortable in it at the same time.”