That followed last week's news that the "misery index" had hit a 28-year high. The misery index, created by an economist in the 1960s, combines the unemployment rate with the inflation rate. It's based on the simple notion that if prices are rising while more people are out of work, misery abounds.
But psychologically, there's more at work than just jobs and money. Here's a look at the underlying emotions that are really getting us down -- and some insights from subjective well-being research that can help cheer us up.
A volatile stock market, concerns about job security, rising costs of health care, food and other basics -- they all add up to a cloud of uncertainty. And humans hate uncertainty.
Economist Carol Graham of the Brookings Institution studied Americans at the beginning and late stages of the economic crisis that began in late 2007. She found happiness levels were higher in June 2009 than in January 2008, although living standards were markedly higher in 2008.
That's because in early 2008, nobody had any clue about the scope of the economic storm the U.S. was sailing into, Graham suggests. "The idea is, 'I'm poorer than I was before, but now I know what I've got to deal with,'" she explains.
Solution? Focus on what you can control: managing spending, boosting income by moonlighting or selling goods on eBay or Craigslist, evaluating how much risk you are really comfortable with, and reducing investment fees.
Losing a job or a financial cushion can also cause people to feel like they've suffered a loss of status. Evolutionary biologists suggest our drive for prestige derives from a physiological need that played an important role in early primate survival: The higher one's status, the larger a share of key resources -- i.e., food -- one received in competitive situations.
The alpha-ancestors survived better, lived longer, and left more healthy offspring, preserving their genes in the population. For this reason, our biology evolved to make us keenly attuned to status, says Denise Cummins, an author who teaches psychology at the University of Illinois in Urbana-Champaign.
Solution? Change your reference group. A shift in relative status hits us the hardest. So if you get laid off, don't hang out at cocktail parties with your former professional peers who are doing well. Instead, network with those people one on one, and look for social gatherings with a less career-oriented focus.
Saving regularly for retirement in a 401(k) can offer a sense of confidence and security about the future. On the other hand, when that money goes into the stock market -- with its stomach-churning ups and downs -- we can feel a terrible sense of powerlessness. And that can inspire actions that compound the misery.
Adam Galinsky of Northwestern University and Jennifer Whitson of the University of Texas-Austin found that in an effort to restore a psychological sense of control, powerless people see patterns and make connections that aren't there. (The classic example is embracing superstitions, such as baseball player Jason Giambi's revelation that he wears a gold lamé thong to break out of bad slumps.)
Researchers find that worries about volatility can lead us to distort information -- and bad information leads to bad decisions. Galinsky and Whitson had two groups of people read different material about the stock market. One piece was headlined "Smooth Sailing Ahead for Investors" and discussed why the markets would be stable, while the other blared "Rough Seas Ahead for Investors," and described a volatile, unpredictable market. Participants then read analysts' comments about two anonymous companies. Company A had twice as many comments as Company B, but both had an equal percentage of positive reviews (about two-thirds).
When asked to recall how often bad things were written about company B, those who were primed to think the market would be stable were very accurate. Those primed to feel the market was unpredictable and uncontrollable reported 25% more bad news than they actually read. Asked whether they would invest, 58% of those who thought the market would be stable said they would buy Company B -- compared to 25% of those primed for volatility. Their fear led them to see false patterns in the data, which guided their subsequent decisions.
Solution: While thong-wearing can be a harmless (if uncomfortable) ritual for a pro athlete, applying superstitions and distorted thinking to investing can be much more painful. In his book Your Money & Your Brain, author Jason Zweig advises investors to create an "investment policy statement" to guide them through good times and bad. Set some guidelines to rein in bad decision-making during times of volatility -- and stick to them.
If you find yourself dwelling endlessly on your misery, either make a change or create a diversion. Researchers have found there are two kinds of rumination -- analytical and experiential. The former can be constructive, because it leads to possible solutions (i.e., I have to pay off this credit card debt, so I'll get a part-time job over the holidays.)
By contrast, experiential rumination can exacerbate depression, impair problem solving, and alienate supporters, as loved ones get tired of the negativity, researchers found. When presented with hypothetical negative life events, such people tend to pick gloomier and more distorted interpretations, minimize their successes, and overgeneralize from their failures.
Ruminating leads to procrastination, which can compound the initial problem, says Sonja Lyubomirsky, psychology professor at University of California-Riverside. She and several co-researchers found female ruminators with breast cancer symptoms experienced greater distress, so they delayed seeking a diagnosis -- waiting more than two months longer than non-ruminators to report symptoms to a doctor.
Solution: Diverting your attention can break a cycle of rumination and lead to clearer decisions. Read, play sports, meditate, volunteer or spend time with friends -- though not with other ruminators, nor with people who might remind you of a fall in status.
And practice gratitude. Write down your list of worries, from largest to smallest. Then compose a second list of everything you are most grateful for. Consider whether you would give up anything on your grateful list to make something on your worry list disappear. Odds are the answer will be no -- and maybe your personal misery index will improve just a little bit.
Struggling with a personal finance situation? I welcome your questions but it's also about your wisdom, ideas, and experiences that may help other readers. Email me at firstname.lastname@example.org. You can also follow me on Twitter @MoneyHappiness.