A top economist believes he has finally solved why Americans feel so lousy about an economy that looks healthy on paper.
University of Michigan economist Justin Wolfers made his case Wednesday in his Substack newsletter Platypus Economics, pinning much of the national gloom on a record collapse in public faith in how President Donald Trump's administration is handling the economy.
Wolfers wrote that cable news hosts keep putting the same question to him. "Our economic statistics look pretty good, so why are Americans so gloomy?"
The University of Michigan's consumer sentiment index registered roughly 52 this summer, almost exactly where it stood in May 1980. Back then, unemployment was close to 8 percent, and inflation was running near 14 percent. Today, joblessness sits at about half that rate, and price growth is roughly a quarter of it, according to Wolfers.
Using decades of data on prices and jobs, Wolfers built a model to estimate where sentiment ought to be. It put the figure at about 82, far above reality.
"That's a 30-point gap, and it's the mystery we have on our hands today," he wrote. His "prime suspect," Wolfers wrote, is the overwhelming majority of Americans who rate economic policy under Trump as poor, a verdict he called "the worst it has ever been."
The case rests on another survey question asking whether the government is doing a good or poor job on economic policy. Subtracting the share who answer "good" from those who say "poor," Wolfers found the gap widened from 14 points in late 2024 to 66 points in May 2026. The previous high of 52 came during the 2011 debt ceiling standoff.
"That's the highest reading in the history of the question (by a lot)," he wrote.
Wolfers then tested whether the theory would have predicted the slump ahead of time, feeding the model only data through October 2024. Prices and jobs alone forecast a drop of about two points. Sentiment actually fell 17. Adding the public's harsher verdict produced a predicted decline of roughly 20.
"In economics, we don't call that a near miss," Wolfers wrote. "We call it nailing your forecast."
He offered a blunt answer for the next time he's hit with the question of why Americans are so gloomy despite good economic statistics.
"They're not misreading the economy," he wrote. "They're reading the people running it. And their verdict today is the harshest on record."