US Economic Perception vs. Reality: How Government Data Misled Voters

[Social Media]

 

Before the 2024 presidential election, many Democrats were baffled by the disconnect between government economic data and the public’s overwhelmingly negative perception of the economy. Some believed misinformation was to blame, arguing that right-wing media had convinced voters that the country was in decline. But what if the real issue wasn’t perception, but rather the accuracy of the government’s economic indicators?

 

What if the statistics used to showcase economic strength were fundamentally flawed, presenting an overly optimistic view of reality?

 

Having spent years analyzing the intersection of public perception and economic data—first as comptroller of the currency and later as an adviser to financial institutions—I have grown increasingly skeptical of the numbers that Washington relies on. Many officials I’ve worked with believe in the infallibility of government statistics, treating them as hard facts. Yet my experiences outside of Washington have revealed something different: a widening gap between what the numbers say and what people are actually experiencing.

 

Official statistics suggest low unemployment, steady wage growth, and overall economic expansion. But when traveling the country, I’ve seen something else—deteriorating cities, struggling communities, and even a homeless encampment right outside the Federal Reserve building. This disconnect has become more pronounced along partisan lines: Democrats, in general, seem more willing to trust government data, while Republicans rely more on their personal observations.

 

For decades, federal agencies have relied on the same methodologies to report key economic indicators, rarely questioning whether these measurements truly reflect reality. To investigate, I assembled a team of researchers under the Ludwig Institute for Shared Economic Prosperity to take a deeper look. What we found was striking: for over 20 years, and especially in the months leading up to the election, public skepticism about the economy was more accurate than official statistics.

 

Consider the most widely cited economic indicator—unemployment. The official U-3 unemployment rate suggests near-record lows, standing at just 4.2% in November 2024. But this figure is deeply misleading. It counts as “employed” millions of workers who are underemployed—those working only a few hours a week while seeking full-time jobs.

 

It also excludes many people who have stopped job-hunting out of discouragement. Even worse, the measure ignores income levels, meaning that someone doing occasional gig work while living on the streets is still counted as employed. Adjusting for these factors, our research found that true unemployment—including underemployment and poverty wages—was actually 23.7%, meaning nearly one in four American workers was functionally unemployed.

 

Wage statistics are similarly misleading. The government’s reported median wage of $61,900 is calculated using only full-time workers, excluding those in part-time or unstable jobs. When all workers are accounted for, the actual median wage falls to around $52,300—16% lower than the commonly cited figure.

 

Inflation, another major election issue, also appears rosier in official data than in reality. The Consumer Price Index (CPI), which tracks prices for 80,000 goods and services, suggested that inflation had cooled by Election Day, with prices rising 4.1% in 2023. But the CPI tracks a broad range of goods, including luxury items that wealthier households purchase, which tend to have more stable prices. Lower- and middle-income Americans,

however, spend a disproportionate share of their income on necessities—housing, groceries, healthcare—where prices have risen far more sharply.

 

Our research found that for working-class households, the real cost of living has increased 35% more than the CPI suggests over the past two decades. In 2023 alone, while the CPI recorded a 4.1% increase in prices, our alternative measure showed a 9.4% rise in the cost of essential goods and services. When adjusted for this more accurate inflation measure, purchasing power at the median actually declined by 4.3% last year.

 

Even GDP, often used as the gold standard for measuring economic growth, fails to tell the full story. While GDP has risen, much of this growth has benefited wealthier Americans, leaving many others behind. Since 2013, those with college degrees have seen notable gains, while Americans without high school diplomas have experienced stagnation. Geographic disparities have also widened, with cities like San Francisco and Boston thriving while places like Youngstown, Ohio, and Port Arthur, Texas, have fallen further behind.

 

Taken together, these discrepancies reveal a troubling reality: the economic indicators that policymakers and media outlets rely on consistently obscure the hardships facing middle- and lower-income Americans. This isn’t to say that official statistics are without value, but they fail to capture the full picture. If policymakers in Washington are working from flawed data, their economic strategies will inevitably miss the mark.

 

This should not be a partisan issue. Leaders from both parties would benefit from gaining a clearer, more accurate understanding of economic conditions at ground level. The alternative indicators my team has developed offer a pathway to more precise measurements, and the government should consider adopting similar methodologies to ensure that economic policy reflects reality.

 

In a time when public trust in institutions is declining, it is essential that economic facts reflect the lived experiences of ordinary Americans. If we continue relying on misleading statistics, we will fail to address the real economic challenges facing the country. The question now is whether policymakers will recognize this gap and take steps to correct it.

 

Based on a report by Politico 2025-02-13

 

 

 

[thesetat]

The Dems lost the elections for 2 main reasons. They fail to se what is really happening in the country and because they chose Harris to run in the elections. Both reasons were major factors in why people chose Trump in the end. 

It is easy for the consumer to see their monthly expenses increased dramatically with no changes in their spending habits. Just as it is easy for the people to see the homeless problem and employment problems. The government needed to be shaken up and have a wake up call to reality and Trump is doing that now. What bothers me is that even now, the Dems still walk around with blinders on and in denial about everything being exposed. All they care about is keeping themselves in power and locking Trump up. 

[impulse]

17 minutes ago, thesetat said:

The Dems lost the elections for 2 main reasons. They fail to se what is really happening in the country and because they chose Harris to run in the elections. Both reasons were major factors in why people chose Trump in the end. 

It is easy for the consumer to see their monthly expenses increased dramatically with no changes in their spending habits. Just as it is easy for the people to see the homeless problem and employment problems. The government needed to be shaken up and have a wake up call to reality and Trump is doing that now. What bothers me is that even now, the Dems still walk around with blinders on and in denial about everything being exposed. All they care about is keeping themselves in power and locking Trump up. 

 

And they call us the "low information" voters.

 

[impulse]

4 hours ago, Social Media said:

It also excludes many people who have stopped job-hunting out of discouragement. Even worse, the measure ignores income levels, meaning that someone doing occasional gig work while living on the streets is still counted as employed. Adjusting for these factors, our research found that true unemployment—including underemployment and poverty wages—was actually 23.7%, meaning nearly one in four American workers was functionally unemployed.

 

Now watch.  Dollars to donut holes, the true numbers will come out and they'll blame it on the Bad Orange Man and Musk.

 

[Purdey]

I blame the chickens.

[candide]

5 hours ago, impulse said:

 

Now watch.  Dollars to donut holes, the true numbers will come out and they'll blame it on the Bad Orange Man and Musk.

 

Trump will whine, as usual, and blame it on whoever he can: Biden, the deep state, Rinos, etc....

[SunnyinBangrak]

21 minutes ago, candide said:

Trump will whine, as usual, and blame it on whoever he can: Biden, the deep state, Rinos, etc....

Trump will blame Biden's intentionally misleading economic stats used to gaslight the liberal hivemind, on Biden? Really? Good. Conservatives think state misinformation is wrong.

[candide]

20 minutes ago, SunnyinBangrak said:

Trump will blame Biden's intentionally misleading economic stats used to gaslight the liberal hivemind, on Biden? Really? Good. Conservatives think state misinformation is wrong.

As usual, a lame conspiracy theory. You guys have a conspiracy theory for every subject. 🤣

[SunnyinBangrak]

2 minutes ago, candide said:

As usual, a lame conspiracy theory. You guys have a conspiracy theory for every subject. 🤣

Its literally the OP🤣

[candide]

1 minute ago, SunnyinBangrak said:

Its literally the OP🤣

The OP doesn't claim that stats have been intentionally misleading. It's a conspiracy theory.

 

It's exactly the same statistical system as before, including under Trump. And if you were knowledgeable about it, you would have noticed that most of the detailed indicators used by the author to citicize plain indicators such as GDP, have also been drawn from official stats.

[Oliver Holzerfilled]

This helps explain the Boomers with fat pensions/401ks, healthy SS payments and paid off houses and cars caught up in the "The economy is doing great!" echo chamber being surprised Trump won.

[roquefort]

There are lies, damn lies, and statistics (Winston Churchill).

[JonnyF]

No surprise Biden lied about this.

 

He lied about everything else.

[thesetat]

I think the headline is incorrect. I do not think the government mislead voters.

i think they tried to mislead the voters which is why so many Dems changed their vote to Trump allowing him to win the elections. 

[mrwebb8825]

Doge was created because President Trump made campaign promises to the American people. He told them what he would do and who would help him and they said "Yes".

The whole "Weed Out Corruption" part of that promise meant taking a realistic and transparent view at "Facts vs Stats".

The Dems are freaking out because the bodies are being dug up and most of them are in the Dems party's backyards. They've even gone as far as getting left-leaning judges to try and order the POTUS to run the country the way they want?!?!

Happy to see him mostly ignoring those Dem Appointed Presidents.

[candide]

53 minutes ago, mrwebb8825 said:

Doge was created because President Trump made campaign promises to the American people. He told them what he would do and who would help him and they said "Yes".

The whole "Weed Out Corruption" part of that promise meant taking a realistic and transparent view at "Facts vs Stats".

The Dems are freaking out because the bodies are being dug up and most of them are in the Dems party's backyards. They've even gone as far as getting left-leaning judges to try and order the POTUS to run the country the way they want?!?!

Happy to see him mostly ignoring those Dem Appointed Presidents.

More baseless conspiracy theory  stuff  as usual! 

[candide]

The funny aspect of some comments, is that it's exactly the same indicators, from the same institutions, calculated in exactly the same way that MAGAs were using for bragging  about Trump's economic performance during his first mandate! 

[Harrisfan]

5 minutes ago, candide said:

The funny aspect of some comments, is that it's exactly the same indicators, from the same institutions, calculated in exactly the same way that MAGAs were using for bragging  about Trump's economic performance during his first mandate! 

Trump's inflation was a lot lower using the same methods  

[candide]

17 minutes ago, Harrisfan said:

Trump's inflation was a lot lower using the same methods  

Yes, as in the other countries, there was less inflation pre- Covid than post Covid.

But your pals said that the indicators were misleading, or even lies. So according to their claims, they were misleading for Trump too? 

[Harrisfan]

Just now, candide said:

Yes, as in the other countries.

But your pals said that the indicators were misleading, or even lies. So according to their claims, they were misleading for Trump too? 

Every country has dodgy figures. But if same method as least you can compare. Real figures would be 3 or 4 times higher.

[candide]

6 minutes ago, Harrisfan said:

Every country has dodgy figures. But if same method as least you can compare. Real figures would be 3 or 4 times higher.

Says AN macroeconomist! 

 

(I don't disagree with the claim that indicators are comparable over time)

[Harrisfan]

1 minute ago, candide said:

Says AN macroeconomist! 

The article says more than 2x higher.

[candide]

1 minute ago, Harrisfan said:

The article says more than 2x higher.

There's a recurrent debate among economists about economic indicators. They don't all agree.

[Harrisfan]

22 minutes ago, candide said:

There's a recurrent debate among economists about economic indicators. They don't all agree.

How many does it take to change a light bulb?

[sqwakvfr]

On 2/12/2025 at 9:16 PM, Purdey said:

I blame the chickens.

I am back in So Cal now and at Traders Joes one can only buy 1 carton of eggs.  The store said this was because of the Bird Flu outbreak.  

[sqwakvfr]

I landed in LAX last week and went to eat some of my favorite places:

 

1. In N Out was $10 for cheeseburger, fries and a coke.  It was packed and the employees looked happy.  In N Out starts at $22 per hour. Managers can make over $100,000.  Always pleased to eat In N Out

2. Raising Canes was $13 for 3 chicken fingers combo meal.  The chicken fingers were smaller than a couple of years ago.  The place was almsot empty at 1130 on a weekday. 

3. Chik Fil A was really disappointing.  A grilled chicken sandwhich combo was over $14.  The sandwhich was not great, the fries were not great and at 1200 on a weekday the dining room only had 5 customers in it.  The food and overall service were disappointing. I did not get the usual "my pleasure:.  Will not be going back to Chik Fil A

 

The economy for most is based upon what we actually pay and recieive. AKA "The economy sucks".  Granted Trump only has been in office for three weeks but doubt it will get better anytime soon.  I get the feeling fewer people are actually eating out.

[hotsun]

4 minutes ago, sqwakvfr said:

I landed in LAX last week and went to eat some of my favorite places:

 

1. In N Out was $10 for cheeseburger, fries and a coke.  It was packed and the employees looked happy.  In N Out starts at $22 per hour. Managers can make over $100,000.  Always pleased to eat In N Out

2. Raising Canes was $13 for 3 chicken fingers combo meal.  The chicken fingers were smaller than a couple of years ago.  The place was almsot empty at 1130 on a weekday. 

3. Chik Fil A was really disappointing.  A grilled chicken sandwhich combo was over $14.  The sandwhich was not great, the fries were not great and at 1200 on a weekday the dining room only had 5 customers in it.  The food and overall service were disappointing. I did not get the usual "my pleasure:.  Will not be going back to Chik Fil A

 

The economy for most is based upon what we actually pay and recieive. AKA "The economy sucks".  Granted Trump only has been in office for three weeks but doubt it will get better anytime soon.  I get the feeling fewer people are actually eating out.

Restaurants keep increasing calories and portions to justify the higher prices. Last time i ate out was five guys two months ago, i was the only one in there at noon

[HappyExpat57]

On 2/13/2025 at 6:38 AM, thesetat said:

The Dems lost the elections for 2 main reasons. They fail to se what is really happening in the country and because they chose Harris to run in the elections. Both reasons were major factors in why people chose Trump in the end. 

It is easy for the consumer to see their monthly expenses increased dramatically with no changes in their spending habits. Just as it is easy for the people to see the homeless problem and employment problems. The government needed to be shaken up and have a wake up call to reality and Trump is doing that now. What bothers me is that even now, the Dems still walk around with blinders on and in denial about everything being exposed. All they care about is keeping themselves in power and locking Trump up. 

 

[sqwakvfr]

27 minutes ago, hotsun said:

Restaurants keep increasing calories and portions to justify the higher prices. Last time i ate out was five guys two months ago, i was the only one in there at noon

The one thing I have not seen is increased portions of the food I have paid for.  It seems smaller than in the past. I also went to a Panda Express (you know allegedly Chinese food made by Mexicans) and the the two item combo with a drink was $14.  The fried rice was plentiful but the beef in beef broccoli was slim. Also, the chicken in orange chicken was slim and it was a lot of breading.  

[candide]

1 hour ago, Harrisfan said:

How many does it take to change a light bulb?

(y − γ)(y − γ) = (y − Xβˆ)+(Xβˆ − γ)(y − Xβˆ)+(Xβˆ − γ) 😆