3 Reasons Why People Feel Rotten About The Economy

According to a recent CBS News poll, Americans feel rotten about the economy and haven't felt this pessimistic since April of 2009. Let me put that in context: in April of 2009, the stock market was over 50 percent lower than where it is today; the US economy was shrinking, not growing; and job losses were running in the hundreds of thousands.

There are three easy reasons to explain the numbers: jobs, wages and houses.

Jobs: From July 2007 to July 2010, the US economy has lost a staggering 7.88 million jobs. In the same period, the adult population has grown by 6 million. Sure, we stopped hemorrhaging pink slips, but the private sector can't even create more than 100,000 a month yet, so the employment situation is likely to be stuck for the foreseeable future. That's bad news for the nearly 6.5 million people who have been out of work for more than six months and the 8.5 million who are working part-time and want to be full-time.

Wages: To my delusional friend "A", who recently argued that Wall Street's boom was good not only for the top earners, but for all US workers, I finally have the back up to my argument. Chuck Marr of the Center on Budget and Policy Priorities recently wrote: "In 1979, the middle fifth of Americans took home 16.5 percent of the nation's total after-tax income. By 2007, after several decades of stagnant incomes in the middle and surging incomes at the top, the middle fifth's share had dropped to 14.1 percent. Over the same period, the top 1 percent's share more than doubled, from 7.5 percent of total after-tax income to 17.1 percent. So by 2007, the top 1 percent had a bigger slice of the national income pie than the middle 20 percent."

Got that? The rising tide didn't exactly lift all boats.

Housing: The housing boom and bust has left homeowners working off one heck of a hangover. This week, the data confirmed that housing still stinks and prices are likely to drop further in the second half of the year nationally due to the historically high level of supply.

With jobs, wages and housing all mired in the post-recession dumps, no wonder Americans feel lousy about the economy!

Jill Schlesinger

Jill Schlesinger, CFP® is the Emmy-nominated business analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and chief investment officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.

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