Many users on TikTok have latched onto the idea that the U.S. economy has fallen into a depression, much like the 1930s, which has made the cost of living largely unaffordable. Economists told CNBC that’s almost definitely not the case.
TikTok user Freddie Smith, a realtor based in Orlando, posted a video in September claiming that the U.S. economy is in what he calls a “Silent Depression.” In the video, which has amassed nearly 800,000 likes, Smith compares the average 2023 salary and basic costs to those of the Great Depression to highlight the growing cost-of-living crisis in the country.
“If you look back to the Great Depression, the house was only three times the average salary. Now, it is eight times the average salary,” Smith said. “The car was 46% of the salary, the car today is 85% of the salary. And here’s the craziest part, the rent was 16% of the average salary, it is now 42% of the average salary.”
Smith’s post inspired several others to share figures and anecdotes that affirm of the existence of a “Silent Depression,” including skyrocketing home values and the growing number of people living at home with their parents.
While inflation is still above pre-pandemic levels, clocking in at 3.1% last month, the Federal Reserve’s inflation-fighting campaign has proved largely successful at slowing the pace of rising prices, with many economists and analysts predicting that the elusive “soft landing” is in sight for 2024: a case where inflation is wrangled without tipping the economy into a recession.
Meanwhile, U.S. employers added 199,000 jobs in November and the unemployment rate dropped to 3.7% from 3.9% — signs that, although the economy appears to be cooling off and the labor market is opening up, the economy remains strong.
“To be sure, the economy is slowing, and the job market is cooling, but we are not in a depression,” Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, told CNBC. “Now wages are rising faster than inflation, boosting buying power. This is hardly a depression.”
I’ve been saying this a lot, but a society like ours who forms most of its views of history, politics and the physical/natural World around them by watching stuff that’s primary function is entertainment. Movies, tv shows, and now socials.
As an example, if I bring up D-Day or even just World War II, most people probably get some sort of saving private Ryan footage playing in their head. And while that movie tried to be authentic, it is still built from the ground up to manipulate your feeling first. So large scale you get a lot of people acting on feeling disguised as fact.
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Many users on TikTok have latched onto the idea that the U.S. economy has fallen into a depression, much like the 1930s, which has made the cost of living largely unaffordable. Economists told CNBC that’s almost definitely not the case.
TikTok user Freddie Smith, a realtor based in Orlando, posted a video in September claiming that the U.S. economy is in what he calls a “Silent Depression.” In the video, which has amassed nearly 800,000 likes, Smith compares the average 2023 salary and basic costs to those of the Great Depression to highlight the growing cost-of-living crisis in the country.
“If you look back to the Great Depression, the house was only three times the average salary. Now, it is eight times the average salary,” Smith said. “The car was 46% of the salary, the car today is 85% of the salary. And here’s the craziest part, the rent was 16% of the average salary, it is now 42% of the average salary.”
Smith’s post inspired several others to share figures and anecdotes that affirm of the existence of a “Silent Depression,” including skyrocketing home values and the growing number of people living at home with their parents.
While inflation is still above pre-pandemic levels, clocking in at 3.1% last month, the Federal Reserve’s inflation-fighting campaign has proved largely successful at slowing the pace of rising prices, with many economists and analysts predicting that the elusive “soft landing” is in sight for 2024: a case where inflation is wrangled without tipping the economy into a recession.
Meanwhile, U.S. employers added 199,000 jobs in November and the unemployment rate dropped to 3.7% from 3.9% — signs that, although the economy appears to be cooling off and the labor market is opening up, the economy remains strong.
“To be sure, the economy is slowing, and the job market is cooling, but we are not in a depression,” Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, told CNBC. “Now wages are rising faster than inflation, boosting buying power. This is hardly a depression.”
I’ve been saying this a lot, but a society like ours who forms most of its views of history, politics and the physical/natural World around them by watching stuff that’s primary function is entertainment. Movies, tv shows, and now socials.
As an example, if I bring up D-Day or even just World War II, most people probably get some sort of saving private Ryan footage playing in their head. And while that movie tried to be authentic, it is still built from the ground up to manipulate your feeling first. So large scale you get a lot of people acting on feeling disguised as fact.