Business is booming. At least, that's what GDP figures tell us. In data released on Thursday, the Commerce Department reported the economy grew by 5.7 percent in 2021. That's the highest rate since 1984, when profits and jobs roared back from the early '80s recession.
If the numbers are so good, though, why do we feel so lousy?
Just a few days before GDP data were released, economists reported consumer confidence fell in January. That's partly due to recent fluctuations in the stock market, which are themselves related to inflation and the likelihood that the Federal Reserve will raise interest rates in response. Some commentators, including my colleague Ryan Cooper, also blame the Biden Administration's failure to adequately highlight economic bright spots. And there's clearly a partisan dimension to perceptions of the economy: A majority of self-identified Republican see inflation or product shortages as the biggest problems facing the country, while a majority of Democrats cite COVID as the main challenge.
But econometrics and survey data paint an incomplete picture of the situation. Even if it doesn't show up in the numbers, many Americans' experience of the economy over the last year and more has been defined by what sociologists call "precarity."
A term of art for the absence of psychological security, unpredictability, and vulnerability to technological change, the concept of precarity first caught on in Europe, where it designated the consequences of deregulating the labor market in the 1990s. But it's since been adopted more widely to describe a pervasive feature of modern life. Constant anxiety that your job will be outsourced or automated is one form of precarity. But so is fear that you'll get sick, that your children's school will close, or that goods you count on vanish from the shelves.
The concept is useful because it helps reorient the conversation away from material deprivation in the strict sense. You can suffer from precarity even if you're employed and possess the full range of consumer goods. Indeed, precarity is in some ways more intense among the downwardly mobile middle class than among the genuinely poor. It's less about needing things you simply can't afford than fearing conditions you count on today will become inaccessible tomorrow. Even though it's not necessarily an economic disaster, inflation is especially unsettling because it raises that prospect every time you fill your tank or buy groceries.
The causes of widespread precarity go back decades (for example, see the national security intellectual Edward Luttwak's prescient 1994 essay). Yet the pandemic has widened the gap between our expectations for stability and the reality of daily life. No matter what the numbers say, many of us feel that economic, political, and social phenomena which once seemed orderly and predictable have spun disastrously out of control. Until that changes, aggregate statistics like GDP growth won't matter very much.