SCOTT DETROW, HOST:
The economy is looking strong. That's based on the latest GDP numbers out today. But ask Americans if the economy feels strong to them and you get different answers, including disbelief.
DAVID BOLUS: It's scary.
KATHRYN ANTHONY: Stress.
JEANNIE KIMBERLY: I think it's fixed.
DETROW: NPR personal finance reporter Stephan Bisaha is here to share more about how these Americans feel about the economy. Hey, Stephan.
STEPHAN BISAHA, BYLINE: Hey, Scott. Good to be with you.
DETROW: So before we hear those voices, what did we learn about the overall economy today from the data?
BISAHA: Yeah, we learned, overall, it's growing strong. Gross domestic product is the widest measure of the economy from the Commerce Department. Today, we got the numbers for July, August and September, and GDP grew at an annual rate of 3.4%. Just about any economist would be happy to see those numbers. The growth was faster than in the spring and was largely driven by this massive investment we're seeing in AI and by consumer spending.
DETROW: So that's the big picture numbers. What about people you spoke with? What did they say about it?
BISAHA: Yeah, one of the first things I heard was disbelief. That was from Jeannie Kimberly. She's retired and lives in Spokane Valley, Washington. When I called her up on her flip phone, she was cutting coupons to save on groceries.
KIMBERLY: I was so happy. My grandson was coming over, and I got a coupon for a free bag of Oreos, any size. And I thought, boy, I never thought I'd be in this position where I would be so excited about a free bag of Oreos, any size.
BISAHA: Kimberly says herself and her neighbors are all scraping to get by, and she just doesn't buy these economic numbers. There just continues to be a disconnect between what the numbers are showing us and how people are feeling about them. Part of the problem is that inflation is still high. Prices rose 3.6% in September, according to a reading on inflation we got today. That includes healthcare costs, which Kimberly says are really hurting her and her community.
KIMBERLY: They're just going, OK, can I do without this medicine? Can I only have maybe two meals a day?
DETROW: OK. But you just told us one of the reasons GDP is up is that consumer spending is up. So how can consumers be struggling to get by at the same time that they're still spending more?
BISAHA: One reason for that is that a lot of spending growth is driven by higher income earners. But honestly, even some people you normally consider well off say they are feeling squeezed, too. I heard this while walking and talking to people in my neighborhood here in Birmingham, Alabama. Kathryn Anthony is an OBGYN and a fellow at the local university here. And she says even doctors are trying to stretch their dollars these days.
ANTHONY: It's influencing, like, honestly, every single day to day life. Every single day has to be a decision about how you're spending your money. And so just have never had to actually live through that before.
BISAHA: She's now buying more in bulk and cooking more at home and with more veggies rather than meat. That said, Americans like Anthony, they are still spending.
ANTHONY: No, I'm still - I'm really good at spending money. I want to make that very clear here. But something that I never would have thought about getting, like a cup of coffee, is, like, now an intentional decision.
DETROW: Yeah. So even if Americans are spending more overall, I mean, is that just because prices are higher instead of because they're purposely buying more things?
BISAHA: A lot of it is just that. Everything costs more, so the overall spending is higher, even as Americans are getting less bang for their buck. That's part of what happens when rising prices outpace wages. David Bolus, I talked with him. He's from the University of Alabama and told me about how he's trying to tighten his budget.
BOLUS: Cutting back on my number of expenses. But the things that are pretty much baked into my monthly budget, I am spending more on. I'm spending more on gas. I'm spending more on food. I'm spending more on incidentals like the - I do have a monthly book budget, so I'm spending a little bit more on my books because I am not spending money on movies.
BISAHA: Basically, when he tries to make a cut somewhere in his budget, he finds another part getting more expensive. It's a zero sum game.
DETROW: OK, one other thing you talked about before, a driver of the economy is the tech industry investing billions in AI. Why is that boost not being felt by consumers?
BISAHA: Well, the AI buildout is certainly being felt by construction workers building these data centers, but a lot of people outside of construction and tech are not feeling that financial benefit. In fact, many of them are worried this power-hungry tech will just boost up their utility bills, and with that, hurt their budgets altogether.
DETROW: That is NPR's Stephan Bisaha. Thank you so much.
BISAHA: Thank you. Transcript provided by NPR, Copyright NPR.
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