The economy, statistically speaking, is sluggish, but hardly Great Depression-like—though American consumers seem to disagree, the Washington Post reports. They're paying more for everything from gasoline to grapefruit, are watching the value of their homes decline and fear their jobs may be disappearing—which, policy-makers worry, could breed behaviors that will make all the doom and gloom come true.
After two decades of prosperity, Americans have come to expect low unemployment and inflation as the norms. In May 1980, unemployment was at 7.5% and inflation at 14.4%; they’re 5.5% and 4.2% today. But skyrocketing gas and food prices, plus falling home values, affect the vast majority of Americans, so the perception of trouble can be a few shades darker than reality.