Will the 'vibecession' continue to be a thing? Experts weigh in.

• The gap between the economy's performance and individuals' perceptions of their financial well-being is referred to as "Vibecession."
• According to NBC Exit Poll data, nearly half, or 45%, of voters reported being financially worse off now compared to four years ago.
• Yet economic metrics show otherwise.

Some experts predict that the "vibecession" that some consumers have been experiencing for a while may worsen their feelings.

Kyla Scanlon, the author of "In This Economy? How Money and Markets Really Work," coined the term "vibecession" in 2022 to describe the disconnect between consumer sentiment and economic data.

She tells CNBC that economic data and consumer sentiment are conveying different messages.

According to NBC Exit Poll data, nearly half of voters, or 45%, say they are financially worse off now than they were four years ago, which is the highest rate since 2008.

Despite some concerns, economic indicators suggest the economy is doing well. Inflation has decreased, and while there are some signs of instability in the job market, overall conditions are improving from the overheated market of recent years.

"In the presidential election, Scanlon stated that the economy is highly personal and people strongly dislike inflation."

The upcoming presidential election has led some Americans to adopt a "doom spend" mentality.

Despite a stable economy, Americans are likely to experience a "vibecession," according to experts.

If President-elect Donald Trump implements certain policies, the vibes could deteriorate, according to Jacob Channel, senior economist at LendingTree. The implementation of high-rate tariffs on imported goods may erase the progress made in reducing inflation.

If Donald Trump implements the economic policies he campaigned on, we will experience a recession, not just a vibecession, according to Channel.

Inflation and the labor market

Prices for goods and services are increasing at a slower pace due to a decrease in inflation, according to Brett House, an economics professor at Columbia Business School.

"The persistent high prices that remain post-pandemic are causing Americans' ongoing frustration with the economy and their personal circumstances, resulting in daily sticker shocks when buying groceries, getting a burger, paying rent, and filling up the car, according to him."

The annual inflation rate in the U.S. reached 2.4% in September, as indicated by the Bureau of Labor Statistics, with the consumer price index growing to a seasonally adjusted 0.2%.

Despite the Federal Reserve's ongoing concerns about inflation, "we're observing indications of labor market weakness," Scanlon stated.

The Bureau of Labor Statistics reported that the quits rate in September was 3.1 million, a 1.9% decrease from the previous month. Additionally, there was a slowdown in hiring as the economy only added 12,000 jobs in October, which is lower than the forecast of 100,000 increase and significantly less than the 223,000 jobs added in September.

Mark Hamrick, senior economic analyst, stated that "a lot of this is just simply normalization after the distortions that occurred after the COVID shutdowns."

Despite signs of weakening, the labor market remains firm with an unemployment rate of 4.1% and wage growth of 4% from the previous year, according to J.P. Morgan.

'What the bond market is telling us'

The stock market experienced a significant surge after the presidential election results, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all reaching record highs.

On Wednesday, the 10-year Treasury yield increased by 15 basis points, reaching a high of 4.43%, its highest level since July. This rise in yield occurred as investors predicted that a Trump presidency would lead to increased economic growth and higher fiscal spending.

The 2-year Treasury yield increased by 0.073 basis points to 4.276%, marking its highest level since July 31.

Scanlon warned that the inflation story may not be over yet, as indicated by the bond market.

If Trump's second term results in certain policies, inflation may worsen, experts predict.

According to Hamrick, when treasury yields increase and the possibility of an additional $7 to $10 trillion in federal debt arises, these actions are not anti-inflationary measures, and mass deportations are not the solution.

Trump has proposed a tariff of 10% to 20% on all imports and 60% to 100% on goods from China. This move will lead to inflation, according to Scanlon. Additionally, his fiscal plan could result in an additional $7.75 trillion in spending by 2035, as estimated by the Committee for a Responsible Federal Budget.

"It's uncertain what will be included in this fiscal plan, but the proposed tax cuts and tariffs are costly, and the bond market is indicating this," she stated.

'Vibecessions' going forward

The National Bureau of Economic Research defines a recession as a substantial decrease in economic activity that affects the entire economy and persists beyond a few months. This occurred most recently during the start of the pandemic in 2020.

Experts say that it can be challenging to reconcile what people are experiencing in their daily lives with national averages and medians, which may not accurately reflect their feelings about the economy.

Scanlon stated that there will remain a gap between individuals' emotions and the economy's performance.

To that point, "the vibecession will endure," Channel said.

If consumers have to deal with extra costs associated with tariffs every time they go to the grocery store, "the vibes might actually start to get a whole heck of a lot worse," Channel added.