The mood of Americans and Canadians has been a subject of intense discussion in the news recently, especially in the aftermath of the recent United States presidential election. One term that has emerged to describe this phenomenon is “vibecession,” which refers to the gap between people's personal financial situations and the overall economic landscape.

Unraveling the Financial Mood Gap between Two Nations

Financial Struggles in the US and Canada

In the 2024 surveys, it was found that Canadians and Americans reported similar financial hardships when asked about having enough money for household necessities. Approximately 70% of Canadians and 62% of Americans said they rarely or never faced a shortage of funds. However, when it came to beliefs about others' experiences, a significant difference emerged. In both countries, 43% of respondents thought that most people frequently couldn't afford basic necessities.When asked about their monthly financial situations, responses were categorized. In both countries, 27% said they were struggling to make ends meet, while half said they were slightly getting ahead or comfortable. But the perception of others' experiences differed sharply. While 43% of Americans believed most others were struggling, an astonishing 65% of Canadians held the same view about their peers.

The Impact of Cost of Living

The cost of living plays a major role in shaping Canadians' distorted view of others' financial well-being. Although inflation has eased in recent months, it has had little effect on Canadians' pessimistic views about the economy. This gloomy perspective is not new; in 2020, 62% of Canadians believed the cost of living had worsened compared to 46% of American workers. Fast forward to October 2024, and the numbers are even more disheartening. 84% of Canadians said the cost of living had worsened, with 51% believing it had become much worse. In contrast, Americans remain relatively less pessimistic, with 65% saying it had worsened compared to 2020 and 35% believing it had become much worse.

The Political Consequences

My research aims to understand how distorted perceptions about money influence people's thoughts and discussions about getting ahead in life, especially through their attitudes towards work. In the current context, the focus is on how this pessimism shapes political consequences, which is relevant on both sides of the border. Both Vice President Kamala Harris and Prime Minister Justin Trudeau are well aware of the political weight of these “bad vibes.” In every election cycle, the adage “it's the economy, stupid” seems to hold true. Perhaps a more appropriate version now is “It's people's perceptions, stupid.” Public sentiment about financial well-being can have as much impact on political fortunes as the actual economic data.