3 Things That Make Americans Feel Left Behind in The Economy

Achieving the American Dream, for many, comes down to three things: owning a home, landing a good job, and doing well financially. But it has become harder to tick all of these three boxes. And that has exacerbated the wealth gap in America.

Bigger Barriers

The barriers to entry in America’s housing market have grown over the past years. The reasons include a structural shortage of housing across the nation, a dwindling supply of for-sale homes that were snapped up in the red hot housing market of the pandemic, and higher mortgage costs than before.

Americans who bought a home during the low-mortgage rates of the early pandemic, have seen their home values rise, but likely aren’t keen to sell right now. After all, they would have to pay up to buy another place.

Meanwhile, the job market, which has been historically strong since the pandemic recovery, has recently shown signs of softening. The number of job openings, while still in the millions, are shrinking, and the unemployment rate has climbed to 4.3% in July from 3.5% two years prior, according to the Bureau of Labor Statistics. For the workers in stable jobs, this may be less concerning, but for job seekers, these changes could be significant.

Finally, Americans who were invested in the stock market over the past years, may have seen their investment portfolios grow as the market rallied amid the strong economic rebound from the pandemic, and the emergence of AI. But those who have been on the sidelines haven’t enjoyed these benefits.

Feeling Left Behind

Together, these three dynamics have made many Americans feel left behind and unable to catch up. It’s part of what economists refer to as the two-speed economy, in which households of different wealth levels have very different experiences of the current economic conditions.

With the U.S. economy expected to soften somewhat over the summer, it could weigh on consumer sentiment and people’s shopping behavior. In turn, this could affect the economy, which relies on consumer spending.

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