In This Economy? - The Good News - Part 1
Trying my best to make sense of what seems inexplicable about current markets, the US economy, and our current widespread gloom
One of my jokes lately is to question anyone’s decision about anything with a “in this economy?”1 retort.
For example, when my 16 YO wants to get the Grande Iced Strawberry Acai Refresher at the Starbucks drive through, she can count on dad making that comment. When friends want to order a second dessert at our fancy couples night out, I might make the “in this economy?” joke.
It’s the kind of ironic tone-deaf commentary friends and family have come to expect from me.
But also, I’ve been having these weird markets & economy & risk conversations over and over this past year and a half with clients, and there’s an “I just don’t get it!” aspect to these conversations. They are asking the same thing I am asking: Is the economy amazing? Is the economy terrible? Are we teetering on the edge of a cliff? Are stock market indices just going up, up, up to the moon, always? Should I sell everything and move to a remote island and wait it all out?2
Trump Derangement Syndrome
In a related question: Do you suffer from TDS? Ask your doctor if you suffer from TDS.
I definitely suffer from TDS.
That is not to say that there are not authentic, fully-warranted reasons to feel outraged. I feel this every day when I read the news. We can (and will!) talk about that later.
But in this context I want to admit that TDS can lead me, and maybe you, to missing the good news.
The good news, despite your awful feelings, is that the US economy is really quite strong.
This is all strange to say, because at the same time consumer sentiment is in the tank. A new Gallup poll released April 28 shows that the share of Americans who say their financial situation is getting worse is the highest it’s been in 25 years. Twenty-five years ago returns us to the year 2001, which had the distinction of being a tech-bubble-crash year as well as the year of September 11.
A key component of the survey-respondents’ view is their worry that energy costs in general and gas prices at the pump in particular are climbing higher, and threaten to get worse. This makes intuitive sense given the uncertainty of war on Iran and blockades on the key Hormuz shipping route.
Of course our feelings are valid. I’ve been in therapy, I get it.
But maybe in this case people’s feelings (about the economy I mean) are just plain wrong?
Taken from many angles, the growing proportion of people feeling their financial situation is getting worse is…odd. Because statistically, many key things would point to people feeling really great, financially.
This is just my dumb simplistic way of thinking but I periodically like to look at 4 major macroeconomic factors. With each one of them the US economy is basically crushing it.
My 4 dumb simplistic things to measure are GDP, unemployment, inflation, and major asset prices. Let’s take them in turn, to try to remind ourselves of the good news, despite our TDS.
GDP
This was released this morning, April 30th.
The year-on-year growth from Q1 2025 to Q1 2026 was 2%, according to the US Bureau of Economic Analysis. Not bad. The biggest boost came from business spending.
Yes, growth has been higher in the past but this is quite respectable growth. Also, jobless claims data released last week are the lowest they have been since 1969, which leads us to…
Unemployment
The US unemployment rate was most recently measured at 4.3% in March 2026. While not the 50-year low of 3.4% from April 2023, it’s still quite amazing. Looking back at our current nearly-full employment from the distance of some future recession, it will be easy to see that 4.3% unemployment is historically a fantastically low rate of national unemployment. In employment terms, these are the good times.
Inflation
Headline inflation was most recently measured in March 2026 at a 3.3% annual rate. That’s higher than the Federal Reserve’s 2% target level, but it’s not awful. It’s also highly sensitive to energy prices, which are naturally volatile, particularly these past 2 months of war on Iran.
If any one of the 4 dumb simplistic things I’m highlighting doesn’t feel good, it’s this one. But also, the US became the world’s largest producer and exporter of oil and gas in the past few years, so we are far better able to weather this volatility than we were in the past, and far better than are most countries.
Asset prices - Stock market
This is hitting new highs. The Dow Jones Industrial Average, S&P 500, Nasdaq, and Russell 2000 have all hit new historic highs multiple times this Spring, the latter three indices in just this past week. Yes, the stock market is not “the economy” and yes it’s not people’s lived experience of prosperity, but it’s also not totally divorced from that either. Anyway, again, three different indices hit all time highs there just this week.
The S&P 500 is up 12.5% on the month, and up 70.7% over 5 years.
Asset Prices - Real Estate
The other major widely-owned asset class, real estate, is much more regional and geographically specific. But there’s certainly no housing crash nationally. Prices and price rises cooled in a few areas with the interest rate hikes of 2023, but nothing has gotten really “cheap” anywhere. Middle class homeowners have maintained their wealth there.
So what are we all so upset about?
Again, these actually are the good times, economically speaking. We will look back fondly (during some future recession) and remember how good we had it in the Spring of 2026.
I’m upset about Trump. I have TDS. He is, absolutely, a corrupt authoritarian menace and an existential threat to the country.3
But this is not primarily a political substack, it’s about money and finance. So I think we should acknowledge how good the economy actually is right now. When I quip “…in this economy?” I am being fully ironic. We’ve never had it this good.4
In a follow up post, I’ll dig in a little more speculatively about
1. Why we might feel so bad right now despite good macroeconomic stats, and also
2. Why we should not hope for bad things to happen in the future, in our desire to get rid of Agent Orange Man.
Not unlike Michael Scott’s annoyingly frequent joke “that’s what she said.”
No, you should not sell everything. Also, islands are expensive! You’re going to move to an island, now? In this economy?
It’s beyond the scope of this post but I do not believe he will accept the results of the 2026 midterm elections. He is a sore loser and will certainly claim massive fraud. And he is a massive risk to attempt another coup in 2028. He tried and failed with his coup in 2020, but didn’t suffer long term consequences from it. He whitewashed the whole thing with pardons. He will try again in 2028, but with more levers at his command. I am deeply worried.
Could the stats be wrong? I mean, I don’t believe in multi-person conspiracy theories holding together without serious leakage, so I don’t think these statistics are wrong. Are they the full story? Of course not. Lots of aspects of the US economy are quite legitimately problematic. Just not the big ones taken in aggregate.