The standard of living in the United States reached its highest level since 2008, just before the recession caught hold, and the year that Gallup began to collect and report on the data.
According to researchers at Gallup:
Gallup’s U.S. Standard of Living Index climbed to 47 in May, the highest score recorded since Gallup began tracking this measure in 2008. This index score is up slightly from 44 in April.
After reaching a low of 14 in October and November 2008 during the Great Recession, the Standard of Living Index fluctuated; it generally moved in an upward direction since that time. The index dipped down to 34 during the U.S. federal government shutdown in October 2013, but has generally increased since then.
Not surprisingly, the measure mirrors several other indices of a healthy economy. First among these is unemployment, which has reached its lowest point since the recession’s beginning. Second is housing. Although prices have started to plateau in many markets, in others prices have gone above their pre-recession highs. And, finally, the stock market has hit several all-time highs recently.
If the standard of living is any indication of consumer spending, then it could be self-perpetuating. Consumer spending continues to be about two-thirds of gross domestic product (GDP). As it rises, so does the likelihood that unemployment will fall and GDP rise. The pattern becomes a virtuous circle.
It there are any threats to the standard of living advance, they are the fact that median income has been flat for 10 years, which means in real terms that it has fallen as the cost of living has risen. And an entire generation of young Americans faces poor job prospects, which means their standards of living likely will be low. Many think it will be lower than that of their parents.
As the polls of standard of living go forward, they will weigh the portion of Americans who have experienced a recovery from the recession against those who think that recovery will never happen.
Methodology: Gallup’s Standard of Living Index is a composite of Americans’ responses to two questions: one asking whether they are satisfied with their current standard of living, and the other asking whether their standard of living is getting better or worse. The index has a theoretical maximum of 100 (if all respondents say they are satisfied with their standard of living and say it is getting better) and a theoretical minimum of -100 (if all respondents are dissatisfied with their standard of living and say it is getting worse).