Americans Frustrated by 'Boomcession' Despite Economic Growth

Policymakers struggle to understand disconnect between data and public sentiment

Feb. 1, 2026 at 4:39pm

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The models used by policymakers to understand wages, economic growth, and consumer spending are misleading, leading to a disconnect between the data showing an economic boom and the public's frustration with the economy. While corporate America is experiencing good times, much of the country is experiencing recessionary conditions, with rising costs for non-discretionary expenses like banking fees and healthcare outpacing wage growth. This 'boomcession' highlights how traditional economic metrics like GDP and consumer spending fail to capture the realities of modern commerce and growing spending inequality.

Why it matters

This case illustrates how the economic models and metrics used by policymakers are outdated and fail to reflect the lived experiences of many Americans. As a result, policymakers are struggling to understand and address the public's frustration with an economy that looks prosperous on paper but feels like a recession for much of the country. Addressing this disconnect is crucial for restoring public trust in institutions and policymaking.

The details

The article examines how metrics like GDP growth, low inflation, and high consumer spending are masking the reality that much of the country is struggling with rising costs for non-discretionary expenses like banking fees and healthcare. For example, while real average hourly wages increased by 1.1% in both 2018 and 2025, consumer sentiment plummeted over that time due to the outsized impact of these rising costs. The article also discusses how traditional economic models fail to account for 'spending inequality', where the purchasing power of the dollar varies significantly based on one's income and wealth level.

  • In 2018, when consumer sentiment was high, real average hourly wages increased by 1.1%.
  • In 2025, when consumer sentiment hit an all-time low, real average hourly wages also increased by 1.1%.

The players

Kevin Warsh

A lawyer and political operative nominated by Donald Trump to become Chair of the Federal Reserve. Warsh is perceived as an avatar of capital and is tasked with making sure the public likes Trump's economy.

Jason Furman

An Obama advisor and Democratic economist who made the case for confirming Warsh as Fed Chair.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

The takeaway

This case highlights the need for policymakers to update their economic models and metrics to better reflect the realities of modern commerce and growing spending inequality. Relying on outdated measures like GDP and aggregate consumer spending is leading to a disconnect between the data and the public's lived experiences, undermining trust in institutions and policymaking.