Is Pessimism About the Economy Justified?

So, which is it -- doom and gloom, or the approach of a glorious summer? 

S.T. Karnick | March 31, 2026

Recent press reports and opinion poll results declare the U.S. economy is in worse shape than it was in 2021 through 2024. This impression prevails despite very high gross domestic product growth and falling inflation in the second and third quarters of last year, in the wake of slower growth and steady inflation numbers in the fourth quarter.

An accurate gauge of the overall health of the economy is critically important considering the federal government’s assumption of authority and control over the nation’s economic well-being. A false diagnosis will lend credence to bad policy choices.

Overall, the U.S. economy is not yet where it should be, though the doom talk today is overstated and politically motivated. What is most damaging about the mismatch between today’s economic myth and reality are the false conclusions about economic policy its advocates send.

The midterm elections are the obvious context for the doomsaying about the economy. The wrong diagnosis could have long-term policy implications. The important question is what the current state of the economy indicates about economic principles and what policy course the United States should pursue in the future.

The two broad alternatives are more government intervention and economic management, or greater economic freedom. Let’s look at the numbers with that in mind.

Inflation has come down far from its mid-2022 peak of 9.1 percent (as measured by the Consumer Price Index, or CPI), to 2.4 percent. January’s headline inflation rate was the lowest since May of last year. Inflation of core consumer prices,........

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