What, exactly, is going on with the economy these days? On one hand, there are headlines about an impending recession and on the other hand the unemployment rate is the lowest it’s been in decades. Rents are declining a bit, but still up hugely over the last year. And what about the cost of eggs?!
The reality is that the economy has a lot of mixed signals right now – and it really depends on what measures you care about. For example, while it’s great that unemployment is low (that means people who are looking for work are able to find it!) solely focusing on unemployment masks the fact that at the end of 2022 labor force participation was lower for most groups of women than it was prior to COVID – and Black women and Latinas faced the largest declines. That means there are barriers to women joining the labor market – such as unsupported caregiving responsibilities – that we need to eliminate.
And the recession story is complicated. The rule of thumb is that the U.S. enters a recession when we have two consecutive quarters of negative growth – but how it’s determined is more complex than that. The National Bureau of Economic Research has an expert committee (yes, it’s mostly men and very white) that examines a range of economic indicators to determine if the economy is growing or shrinking. There’s not a set list of indicators or a standard formula for how to weigh their importance, but they include things like consumption, employment and production. But a quick look at what factors they consider shows that things like food insecurity, racial and gender wage gaps, and health insurance coverage – essential measures of people’s wellbeing and economic security – are notably absent from this economic discussion.
A more important question than, “Is the economy in a recession?” is, “What do people’s everyday lives feel like?” When people go to the grocery store, they don’t pull out their “share-of-the-GDP” card to pay the bill. What matters is whether the money in people’s pockets supports them in living their daily lives. So a better way to think about the economy would be to look at data that measure people’s everyday experiences.
We just got important new information on this front. The Household Pulse Survey shows that 8.1 million people say paying for their children to eat at school makes it harder to meet their other expenses – at the very time when school lunches have been cut. And the Department of Labor just published new information about child care being unaffordable for far too many families. These data are what women and families care about – not some esoteric acronym on a spreadsheet.
These and other data also make clear that communities that have been systematically marginalized through racism, ableism, sexism and more have a harder time making ends meet. For example, Black, Latinx and Asian families are more likely to be burdened by paying to feed their children at school than are white families. And research shows that child care is least affordable for Black and Latinx families with low incomes. These are data that matter – and they often are not even part of the conversation.
So the answer to “what’s going on with the economy?” is there isn’t just one answer. Some people are benefitting from the current economy while others – like those with caregiving needs – are harmed. But when the economy doesn’t work for everyone – and when “fixes” like raising interest rates actually hurt Black workers who have long been marginalized and excluded from the labor market – you know we are looking at the wrong data to assess the situation. A fulsome picture of the economy accounts for the barriers and inequities people face. Anything less is falling short.
P.S. Those egg prices? That’s not really a story about inflation – it’s a story about disease. The increase in egg prices is primarily driven by an epidemic of avian flu which is, heartbreakingly, decimating bird populations. Just one more piece of evidence that focusing our measurement – and our policy – too narrowly hurts us all.