Why the U.S. is suffering from a “vibesession”

Kyla Scanlon, author of ‘In This Economy?,’joins TheStreet to explain what a vibesession is and why U.S. consumers are suffering from it.

Transcript

00:00So you're famous for coining the term vibe session. What is a vibe session?

00:06Yeah, so a vibe session is a disconnect between consumer sentiment and economic data

00:12So it's the idea that people are feeling worse about the economy than the economy would suggest

00:18There's a lot of reasons for it structural affordability is a big one

00:22Like there are reasons that people feel bad housing crisis elder care child care cost

00:26One could point to media headlines is also being a reason that people feel bad

00:30But really it's just meant to dive a little bit deeper into why people feel bad

00:34And then of course start start a conversation about how they could feel better

00:39So are we in a vibe session?

00:44Um, we have been in a vibe session

00:46I think for a while now the piece came out about two years ago and it was worse than

00:53I think now the economy is showing signs of slowing the labor market has shown signs of weakness

01:01Inflation is slowing down, but it's still sticky in some spots

01:05GDP is weakening. But what's funny about all of this? It's not funny funny, but

01:10Consumer sentiment has actually ticked up. So we're still in somewhat of a vibe session, but not how it used to be

01:17so why are we seeing such a disconnect between

01:22The realities of the economy and the realities of how people feel

01:31Well one could there's a lot of different reasons

01:33I think one could say that perhaps economic metrics aren't fully capturing how people are feeling like is GDP actually a measure of happiness

01:41Um, probably not right. It is a measure of consumer spending and maybe spending as a measure of happiness

01:46But I think there's a lot to say about like the numbers that we're using and then I think also

01:52We are sort of in a time of immense uncertainty and immense uncertainty is going to come with an element of doom and gloom

02:00And so I think that also has a big part to play

02:03So what's the one thing that you think most people are misunderstanding about the state of the economy right now?

02:11But I think the main thing that people are missing about the economy right now

02:15It's just something that happens with the human experience where you're you have trouble parsing out the short term in the long term

02:22So I think a lot of people want the problems that we're facing to be fixed right now

02:26But the housing crisis is decades in the making inflation has been you know, a five year four year long problem

02:32Um, you know, the labor market is cyclical

02:35So I think people want immediate solutions to problems that are just going to take a lot of time

02:41To fix and there's a lot of effort being put forward to fix them

02:45But it just takes time and I think that time is extremely expensive, right? It's expensive to wait

02:50It's expensive to be patient and it's hard to be patient as well