Two events from the past week help crystallize this strange, contradictory moment for the U.S. economy.<\/p>\n
On Wednesday, the Bureau of Labor Statistics reported that the surge in energy prices had wiped out a year and a half of wage gains<\/a> for the average American worker. On Friday, the public-markets debut of SpaceX made Elon Musk the world\u2019s first trillionaire<\/a>.<\/p>\n That stark juxtaposition helps explain why many Americans, in survey after survey, say they no longer believe the U.S. economy is working for them. A few people are getting fabulously, unimaginably wealthy at the same time that entire generations of families worry they will never be able to afford to buy a house, raise children or enjoy a comfortable retirement.<\/p>\n \u201cI don\u2019t think the stock market is necessarily causing\u201d Americans\u2019 pessimism about the economy, said Stefanie Stantcheva, a Harvard professor who studies public sentiment. \u201cBut I don\u2019t think people are looking at it and are thinking, \u2018Great, this means I\u2019m going to do very well, too.\u2019 It\u2019s potentially reinforcing this feeling of \u2018I\u2019m falling behind.\u2019\u201d<\/p>\n Inequality is hardly a new feature in America. But the explosion of wealth at the very top<\/a> is without precedent in U.S. history. At the height of the Gilded Age at the end of the 19th century, the richest handful of Americans had a net worth equivalent to about 3 percent of the country\u2019s annual economic output, according to data<\/a> compiled by the French economists Gabriel Zucman and Emmanuel Saez. Today, the fortunes of the same 0.00001 percent \u2014 about 20 individuals \u2014 make up roughly four times as large a share, equivalent to 12 percent of annual output.<\/p>\n Other economists, using different methodologies, come up with somewhat different numbers. But hardly anyone disputes the basic fact that the wealthiest few have made extraordinary gains in recent years.<\/p>\n The picture for the other 99 percent of Americans is more nuanced. More than half of U.S. households own stocks, either directly or through retirement accounts, meaning they have benefited at least somewhat from the record-setting run-up in share prices. Wealth has risen more slowly for middle-class families than for the rich over the past decade, Federal Reserve data<\/a> shows, but it has still risen.<\/p>\n For most Americans, however, \u201cwealth\u201d is a somewhat abstract concept, tied up in the house where they live and the retirement accounts they hope to leave untouched for as long as possible. What matters more, day to day, is their income. And the share of national income going to workers has been trending down for decades. It hit a record low in the first quarter of the year, according to data from the Commerce Department.<\/p>\n Now, rising costs are again taking a bite out of workers\u2019 paychecks. The recent jump in energy prices \u2014 a result of the war with Iran \u2014 pushed the annual inflation rate to a three-year high in May. Hourly wages, adjusted for inflation, have fallen for three months in a row, erasing all the gains made during President Trump\u2019s first year in office. Measures of consumer sentiment have plummeted as gas prices have risen.<\/p>\n Oil prices have eased somewhat in recent weeks on hopes of a lasting cease-fire, and are likely to fall further if the United States and Iran reach a deal and tankers begin to move out of the Persian Gulf through the Strait of Hormuz in greater numbers.<\/p>\n But relief at the pump is not likely to end Americans\u2019 anxiety after years of one economic shock after another. First, the Covid-19 pandemic shut down large parts of the economy and put tens of millions of people out of work, at least temporarily. Then inflation soared to the highest level in four decades. Since then, Americans have endured high interest rates, tariffs and repeated recession scares.<\/p>\n \u201cIf you think about what it felt like to go through Covid, and then inflation, and also political unrest and instability, you come out of those things thinking, \u2018How am I supposed to plan for the future?\u2019\u201d said Elizabeth Wilkins, president of the Roosevelt Institute, a left-leaning think tank.<\/p>\n Ms. Stantcheva, the Harvard economist, has found that bouts of high inflation take a long-term toll on consumers\u2019 economic attitudes. That is not only because of the strain on their budgets but also because it seems unfair \u2014 the wealthy are able to absorb higher prices relatively easily, while lower-income households struggle.<\/p>\n \u201cIt goes hand in hand with a big sense of inequity and injustice,\u201d she said.<\/p>\n Now Americans face a new threat in the form of artificial intelligence, which tech industry leaders warn could eliminate whole categories of white-collar work<\/a>. Many economists are skeptical of those predictions, but polls show that many workers are worried about what the technology will mean for their careers. Voters across the country have also rebelled against plans to build A.I. data centers<\/a> in their communities, citing their impact on electricity bills, water supplies and air quality.<\/p>\n Given those concerns, it is hardly surprising that the public is uncomfortable with the surge in wealth that has accompanied the A.I. boom. Companies connected to the technology have driven the recent gains in the stock market. SpaceX\u2019s debut on Friday was the first in what is expected to be a series of giant initial public offerings for A.I. companies. (SpaceX, though best known for its rockets and satellites, also owns an A.I. lab and has made huge investments in A.I. infrastructure.)<\/p>\n