Viral Vibes: TikTok's Take On A Silent Depression — What Experts Say

Social media platform TikTok invented the term "silent depression" to describe the current economic scenario in the U.S. as the rising cost of goods and services has triggered an affordability crisis across the country. 

The viral theory alleges that life was better in the 1930s, during the Great Depression, compared to today with nearly 62% of Americans living paycheck to paycheck and racking up debt. 

Affordability Crisis Despite Waning Inflation

Inflation has been cooling over the past year as the Federal Reserve implemented an aggressive monetary strategy, cooling from the 40-year high levels observed in June 2022. However, the consumer price index rose by 3.4% in December, above the expected 3.2%. This is still significantly below the Federal Reserve's 2% inflation target. 

Despite cooling price levels, Americans are still feeling the pinch in several sectors, notably real estate. Average home prices hovered at approximately $382,600 last month, reflecting a 4.4% increase from the same period last year. 

Numerous consumers are still facing challenges because of the exorbitant prices of everyday goods. The majority have depleted their savings and are relying on credit cards to meet their financial needs. 

Total card balances reached a new record of $1.08 trillion, according to a quarterly report from the Federal Reserve Bank of New York.

The report reveals that 49% of people with credit cards maintain a balance from month to month, a slight increase from the previous year’s 46%. Additionally, 56 million cardholders have sustained debt for a minimum of one year.

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Debunked By Economist

Despite the diminishing affordability levels, economists maintain that life today is significantly better compared to nearly 100 years ago. 

"Any notion from TikTok that life was better in 1923 than it is now is divorced from reality," Brett House, professor at Columbia Business School, told CNBC. "Today, life expectancies are much longer, the quality of lives is much better, the opportunities to realize one's potential are much greater, human rights are more widely respected and access to information and education is widely expanded."

The 3.8% unemployment rate as of December is a stark difference from the 25% unemployment rate observed during the Great Depression in the 1930s. 

Despite concerns regarding a potential recession, most analysts believe that the Federal Reserve has managed to navigate the U.S. economy to a "soft landing."

At the World Economic Forum in Davos, Switzerland, economic professionals and corporate leaders expressed that the U.S. economy will steer clear of a recession in 2024. Optimism regarding the economy’s well-being has been fueled by the potential interest rate cuts from the Fed in the coming months, coupled with an increase in consumer confidence unless there is another significant geopolitical crisis.

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