Wages are rising. Jobs are plentiful. Nobody’s happy.

Explaining the state of the American economy at the moment is a conundrum. The labor market is good — as is much of the economy — and people say that everything is terrible.

The past couple of years have been a solid stretch for workers in America. Unemployment is low. People who want to find jobs, by and large, can. Wages are up — even accounting for inflation over the past several months, and especially for people at the lower ends of the income spectrum. Workers really have been able to flex their muscles, whether that means quitting their jobs or unionizing or going on strike.

And yet, amid all this, poll after poll shows that Americans say the economy is absolutely awful (what Americans do in this supposedly awful economy is a different thing, which we’ll get to later). That such a strong labor market isn’t making a dent, opinion-wise, is a little weird. It seems like this jobs landscape should make the public feel better. So why do people say it doesn’t?

There are some obvious answers as to why Americans are so disgruntled. Everything is super expensive. The pandemic hangover is persistent — long covid isn’t just physical, it’s emotional. The government supports doled out in recent years — expanded unemployment insurance, the student loan pause, the child tax credit — have expired. The country’s political system is not exactly working spectacularly, not to mention the sense of dread heading into the 2024 elections.

But what if full employment — meaning a labor market firing on all cylinders — or something close to it, like we’ve got now, just isn’t that popular, at least in its current form?

Some elements of it clearly are. People generally like higher pay, lower unemployment, and unions. But it’s not that simple — the American public isn’t on cloud nine over the state of affairs.

Hot job market, cold hearts

To get this out of the way, there is absolutely evidence that full employment in other contexts has gone over much better. In the recent past, the United States largely had a full employment economy in the pre-Covid Trump era in 2018 and 2019. People generally felt pretty good about that. There is a partisanship element to all of this — when a Republican is in the White House, Republican voters say everything is awesome and Democratic voters say everything is terrible, and vice versa, even if they don’t really change their spending.

“The reason we think it’s puzzling, why people are unhappy now, is because the evidence that a full employment economy makes people happy is overwhelming,” said Justin Wolfers, an economist at the University of Michigan.

Right now, people are frustrated by inflation that, while cooling, is still higher than it has been in many people’s lifetimes, and they’re still missing 2019 prices. Consumers and businesses are dealing with higher interest rates that have come as a result of the Federal Reserve’s attempt to tame inflation, meaning items such as mortgages and car loans are more expensive. All of the noise coming from that can drown out the positive aspects of the economy, including the labor market, which not everyone experiences uniformly.

“Full employment is so good for the economy. It raises wages, it brings people into the labor force who have been traditionally left behind, it is an extremely equalizing force,” said Bharat Ramamurti, former deputy director of the National Economic Council. But that equalizing force might be part of the perception problem. “I think a lot of people respond to that negatively because they’re on the other side of that equation.”

[Related: The problem isn’t inflation. It’s prices.]

This type of labor market means that businesses big and small have to compete more for workers, which they don’t love and complain about loudly. In turn, it means consumers might have to wait more or have a worse time at a restaurant, cafe, or hotel, because staffing just isn’t what it used to be. That latte isn’t only pricier, but it takes longer, and customers are now being asked to tip more often as companies try to keep workers happy and subsidize their pay without cutting into their own bottom lines. This labor market means more “Help Wanted” signs, which are generally a good thing, though that’s not always intuitive.

The flip side of full employment is not enough workers. Companies need workers just as much as workers need companies. When employers say, “Oh, it’s so hard to find good help these days,” that means better pay for their employees (though it also sometimes means shorter staffing). The public hears the former voice more often and louder than it does latter.

“There is a recognition that a strong labor market is great for workers but not necessarily good for businesses,” said Joanne Hsu, who runs consumer surveys for the University of Michigan’s Institute for Social Research. “People tell us that they’ve been hearing bad news about labor markets with respect to business conditions.”

The Michigan survey’s current readings find that people report hearing more negative news about employment than they did in the mid to late 2010s. “A surprising share of consumers are mentioning labor markets as a topic of negative news about the economy,” Hsu said.

Why do people feel like this? A lot of it is perception

It may be the case that people should say they feel better about the economy than they do, but nobody can tell anybody how to feel about things or say the reality they’re living isn’t, well, real. As to why full employment isn’t breaking through, sentiment-wise, there are likely a number of factors in play.

Partisanship and negative media bias play a role. Republicans aren’t going to say things are good when Joe Biden is in office, and apparently, Democrats have their own qualms, too. (Whether Democrats are actually mad about the economy or just nonplussed by Biden is an open question.) The media tells stories through the lens of business owners, CEOs, and investors, all of whom are less likely to love how hard it is to find workers; stories about the workers who are benefiting tend to be less plentiful. Layoffs make headlines, especially when they’re at big names in media and tech — and even when they’re a teeny tiny sliver of the labor market. Social media often thrives on negative content.

Inflation is, of course, painful and an enormous mood dampener. It’s not clear how much higher wages have played into higher prices (the answer appears to be likely not very much). Still, consumers worry that higher pay for workers and organized labor making more demands could lead to higher prices on items ranging from their cars to their Chick-fil-A sandwiches. Inflation also feels like a thing happening to people outside of their control. When things go well for people at work — when they get promotions and raises — they often attribute it to their unique circumstances and talents, not macroeconomic conditions.

In a robust labor market like this one, many people feel secure about their jobs and confident about their prospects. At the same time, they’re seeing businesses scrounging around for employees. They can’t get a plumber to come fix their sink, their favorite restaurant has shorter hours, or their local vet clinic has completely shut down. “When you run into that, then you see the downside of the tight labor market, and I think this is particularly acute because people with jobs — which is most people who want jobs right now — have money to spend, and they can’t always spend it in the ways that they want,” Hsu said. “Even good news can be spun into bad news.”

Given the strength of the current labor market, it’s fair to think things should feel better. Many people (though not everyone) are making quite a bit more than they were four years ago. It can feel almost more frustrating that your job is finally paying you well, you’re in the spot you wanted to be in, and you still can’t afford things easily. Gas and groceries remain a pain. You finally got to take that vacation, but it was more than you expected to pay, and the service at the hotel was dismal. Moreover, full employment does not address how prohibitively expensive some major pillars of our economy are — health care, child care, higher education, housing. “Making it” in America today doesn’t feel very made.

“You need more than fully realized wages, you need many other pieces that comprise your cost of living to be significantly more affordable,” said Felicia Wong, president and CEO of the Roosevelt Institute, a progressive think tank. “The reason many of these things aren’t affordable is because their markets are so broken.”

Even though people are saying the economy is bad, a lot of them aren’t acting like it

In conversations with economists, journalists, policymakers, and others who pay attention to the economy, one theme often comes up: The way people say they feel about the economy right now doesn’t line up with where the data, historically, would indicate it should, or even with their own actions.

From 2019 to 2022, American families saw their net worth increase and their incomes go up. While wages overall lagged inflation for much of the pandemic, that’s no longer the case, and they’re growing faster than prices are rising.

The economy has seen wage compression as low-wage workers, specifically, have been able to take advantage of the tight labor market. That may cause some consternation for more middle- and upper-middle-class Americans, who aren’t used to much economic discomfort and are accustomed to the gap between them and lower earners being bigger. (The gap between the ultra-rich and everyone else, of course, is much wider, which makes you wonder if an economy so unequal could ever feel that good.)

As Derek Thompson at the Atlantic noted in 2022, plenty of people say that their personal financial situations are okay and that even their local economies are plugging along, but then they say the national economy is trash.

Many Americans are better off financially than they were pre-pandemic, and many of them are acting like it, too. Consumers and businesses have kept spending. New businesses have been created. None of this is to say that all is hunky dory. If you’re trying to buy or sell your house right now, things are far from ideal. Credit card debt is on the rise. I cannot say this enough: Higher prices suck. Still, actions speak louder than words.

“If you just look at people’s actual spending habits, which I think is probably a fair measure of their actual view of their financial condition and where the actual economy is going, it is screaming that people feel very comfortable with where they think things are,” Ramamurti said. “We should evaluate conditions more by how people act rather than what they say.”

The economy has been in an odd moment for years now, as has the way people feel about it. It’s not that full employment shouldn’t be a goal, or that it’s not a good thing, but depending on the context, it’s complicated — maybe a little more than, on paper, it would seem.