Vibecession
Have you heard of the term? I haven't until recently. A vibecession is a profound disconnect between objective economic metrics and subjective public perception. It describes a landscape where "hard data"—such as positive Gross Domestic Product (GDP) growth, robust corporate investments, and historically low unemployment—signals a fundamentally healthy expansion. Yet, the public "vibe" remains overwhelmingly pessimistic, with consumer confidence surveys tracking at levels typically reserved for severe economic contractions.
The term "vibecession" was coined by economic commentator Kyla Scanlon in her newsletter on June 30, 2022.
She is a published author and at her relatively young age, commands a popular sub-stack that many grey haired economist pay attention to.
The Drivers behind the Vibe
Economists and sociologists point to a few core structural stressors that keep the negative vibes alive:
The Sticker Shock of Cumulative Inflation:
Headline inflation rates may cool down (for instance, dropping toward a more stable 2-3.0% range), but prices do not reset. The cumulative 20–30% jump in the cost of groceries, dining out, and everyday necessities over the last few years has permanently altered the baseline cost of living. Every transaction serves as a psychological reminder of eroded purchasing power.
The Affordability Crisis:
Traditional milestones are out of reach for younger generations. Mortgages holding above 6.0%, paired with record-high home values and soaring rental costs, mean that even if someone has a stable job, they feel structurally locked out of financial security.
A "Fragility Premium":
Rather than a pure deficit of happiness, modern economic anxiety functions as a fragility premium. After surviving a global pandemic, massive supply-chain shocks, rapid monetary tightening, banking scares, and geopolitical volatility, consumers operate with the constant expectation that the other shoe is about to drop. The present feels temporarily okay, but the horizon feels highly unstable.
Impact on Today's Economy
The danger of a prolonged vibecession is that vibes dictate velocity. Consumer spending accounts for roughly 70% of U.S. economic activity. When bad vibes alter consumer behavior, it ripples across the macroeconomy:
Bifurcated Spending Behavior:
While overall consumption remains resilient, the mix of spending shifts. Households increasingly pull back on discretionary items and prioritize non-discretionary essentials (like gasoline and staple groceries). Low- and middle-income cohorts begin lagging significantly behind higher-income spenders, creating an uneven economic profile.
The Threat of Self-Fulfilling Prophecies:
As Scanlon initially posited, if millions of people collectively decide an economic winter is coming, they pull back on capital investments, delay major purchases, and increase precautionary savings. This defensive posture can artificially trigger the exact drop in demand required to induce a true corporate slowdown.
Algorithmic Distortion:
Modern economic sentiment is heavily filtered through algorithmic social media feeds. Viral trends and alarmist financial content heavily outperform nuanced economic reporting, amplifying the negativity bias. Widespread anxiety travels faster than a complex GDP revision chart.
As Tim Wu, recently put in a NYT article
An entire generation has grown up thinking that extraction, as opposed to building, is the path to riches. That is a prospect at once uninspiring and, for most people, almost by definition, out of reach. To recover the sense of optimism and opportunity that once characterized American commerce, Americans need to be confident that — even if they don’t work for a platform — they can reap what they sow.
Impact on Today's Society
The social toll of a vibecession is a steady erosion of institutional and social trust.
The "Permacession" Mindset:
Over time, a prolonged vibecession can calcify into a permanent state of economic doom. Sociological data shows a marked decline in self-reported happiness across nearly all major demographics. People stop believing that a "good economy" is achievable for them, resulting in a collective fatigue where admitting personal financial stability feels out of touch or impossible.
Political Polarization:
When a government points to stellar macroeconomic data while a voter's checking account feels depleted, it creates a massive credibility gap. Economic performance is increasingly viewed through an intensely partisan lens, where the definition of a "good" or "bad" economy depends entirely on which political party occupies the executive branch.
Intergenerational Friction:
The divide between those who secured fixed assets (like 3% mortgages) before the inflationary spike and those trying to build wealth today has widened. This deepens the generational belief that standard economic metrics like GDP are simply abstract numbers designed for Wall Street, entirely detached from the lived reality of Main Street.
Aren't we seeing the examples of all these in our present sphere?
The word is new to me. I'm not sure it tells me anything, except that the lived reality for most of us is separate from the 'numbers'.
Feels depleted, or is depleted?
Is it possible to have strong employment numbers and yet have that employment number not reflect limited job mobility? Strong employment numbers and have lagging wage growth?
I think this is the biggest factor affecting 'consumer confidence'.
I grew up in the 50s. While we lived under the shadow of nuclear annihilation (duck and cover exercises) there was a belief in the economic promise of the United States. Everyone believed they were part of the economic engine that drove the country. We believed in the stability of our domestic government. We had the sense that even disease was under control as we looked at polio in the rear view mirror. Science, the military, the government were dependable and predictable. We didn't question election integrity.
What a different world we live in now. People have faith in their neighbors, maybe, and their local communities. Not even in their school boards anymore. The rich are building bunkers, not against nuclear bombs but to defend against threats of undefined origin. Everybody wants a gun. Dual citizenship is a growing movement as people wonder if they should have an exit strategy.
Maybe the vibe people are feeling is more real than the economic numbers suggest. It's true the numbers don't hint of a depression, or recession. It's true such events would hit the middle and lower classes more than the wealthy. But those are distant threats. People look around today, and very little that they see gives them hope that there is stability not only in the distant future, but even in the near future.
Anyway, that's the way it looks to humble me who know little about economic theory.
Probably both for most.
Absolutely and not just mobility, meaning upward mobility in my mind, but also the jobs that are available are not simply good enough or well paid enough.
I see my Amazon delivery arrives regularly at 4:30 am by regular sedans. These are likely people doing a Amazon delivery service before going to the regular job at 8am.
We certainly don’t in Houston Public Schools where both my girls go. Just search Mike Miles. Enough said!
I read up on Mike Miles (!!)
I don't know if you know that I used to teach. It was a private school for adolescent girls who were diagnosed with psychiatric issues. We had books, and a state curriculum. I used the books, and my lessons (social studies, various courses) corresponded to the state curriculum, but I wrote all my own material. I wrote all my own study guides. I had small classes, because these students couldn't operate in a larger class, so I knew each student well and I knew each student's ability. My lessons were tailored for each class, with each student in mind. It was exhausting, but highly successful (I actually had to retire after six years because I was worn out😇). I can't imagine teaching to a scripted curriculum. I wouldn't have done it.
Mike Miles is much worse than that:)
Remember 1984 of Orwell?
He essentially created a "big brother" culture for the teachers over the last 3 years. We are personally throwing money at the problem because that's the only thing we can do. But situations is dire here for the teachers.
Over 4,700 teachers (about 40% of the teaching force) left during the 2023-24 school year,
https://www.houstonchronicle.com/news/houston-texas/education/hisd/article/june-teacher-employee-departures-2025-20770583.php
I think the overall state of the world makes it hard to be optimistic about much of anything!
Yet, life moves on. I have young children so I got to put up a brave face
I'm a huge fan of Kyla, I think she does a really good job of communicating economics in a clear and understandable way. There has been a bunch of topics that I didn't quite understand until Kyla did a video on them.
The interesting part to me is that the current economic pessimism has persisted through Biden and Trump's Administrations. Biden had a pretty healthy recovery from the height of the Covid pandemic with pretty low inflation and low unemployment, but I still knew people that spent multiple years trying to find work after being furloughed. It's hard to say if the economic data was telling the full story, or my anecdotal evidence was an outlier.
It's super hard to trust the economic data now, so I'm not surprised people feel pessimistic, it legitimately feels like only the rich and well connected get access to the proper data.
I only recently discovered her substack. An amazingly talented young lady!
Yes, we definitely see all of the above in our current economy. The mortgage rates are the biggest factor in my opinion, don't think we are going to ever see sub 3% 30 year mortgages. At least not in our lifetime...
I agree 3% likely very hard in our lifetime
Your breakdown captures the 'permacession' mindset perfectly—it’s not just about money, it’s about a crisis of agency. If you feel like the game is rigged, why bother playing by the old rules of thrift and long-term saving?
Yes that's the current status
This one really landed 'Vibecession', it's the kind of post that makes the feed better.