Why are we so miserable?

Homes are worth less, the value of retirement accounts is shrinking, and the price of food and other necessities is claiming a bigger portion of paychecks.

It's been a tough year for Americans, and the downbeat drumbeat of economic news suggests things may not get better any time soon.

The Dow fell nearly 500 points last week alone and is down 20 percent since October. Home prices in Minnesota dropped 15.5 percent in April from a year earlier, according to the S&P/Case-Shiller home price index. The state's unemployment rate is at a 17-year high. Oil is $140 a barrel and it now costs a wallet-draining $60 or more to fuel the family car.

No wonder that consumer confidence, according a widely watched survey released Tuesday, is as low as it was in 1967.

"I'm sliding," 61-year-old Floyd Ohlson said of his household net worth. Ohlson, who works part-time, had hoped to sell his Rosemount home this year to lower his costs and help finance his retirement. He's had to scratch those plans now and continue working.

Read any survey about the economy these days and the answers are pretty much the same. The majority of Americans surveyed by the Pew Research Center said it's more difficult for the middle class to maintain its standard of living than it was just five years ago.

Nearly three-quarters of consumers surveyed by GFK Roper plan to cut back on expenses such as dining out, movies and other entertainment, clothing and vacations.

The United States has narrowly avoided an official recession so far, thanks in part to tax rebates and strong exports. And by many historic measures, the economy isn't doing as badly as everyone might think.

"The situation has been nowhere as bleak as it was during the 1980s, or especially not the Great Depression," noted Minnesota State Economist Tom Stinson.

Misery index

One measure, the so-called misery index, confirms that people are feeling more miserable today, but not nearly as miserable as their parents or grandparents have felt in the past. The index, calculated by adding the unemployment rate to the inflation rate, was created in the 1960s and cited often during the stagflation days of the 1970s and 1980s as a simple and catchy assessment of the economy's well-being.

Add May's 5.5 percent unemployment rate -- up 0.5 percent from the month before -- to the May inflation rate of 4.18 percent -- and the misery index today is 9.68 percent. That's the highest it's been since September 2005, but nowhere near the all-time high of 21.98 in the summer of 1980, when the nation faced double-digit inflation and an unemployment rate of almost 12 percent.

But for consumers who measure prices by weekly trips to the gas pump, not by decades, that's little consolation.

Kevin Koivisto, a 35-year-old single dad who sold his truck to buy "a little car" with better gas mileage, thinks the economy is treading a fine line between good times and bad: "I think all it takes is one event -- be it big or small -- where we're either going to be in recession completely, 100 percent, or we're going to pop out of this."

Blame the 1990s

Even Stinson acknowledged that the gloom and pain people feel today is not imagined, especially coming after the decade that preceded it.

"By almost everyone's assessment, [the 1990s were] the best economy our generation will ever see," Stinson said. The era from 1994 to 2000 brought low unemployment, inflation and energy prices, rising wages and soaring stock markets and home values.

"We got mesmerized by the increase in asset values," said David Joy, chief market strategist for RiverSource Investments in Minneapolis.

The collapse of the housing market has provided stark evidence that consumer lifestyles and the American economy may have been living on borrowed time and borrowed money.

Adrienne Garcia thinks it's about time for a behavior shift.

"Everyone's going to have to adjust their way of living," said the 28-year-old St. Louis Park resident. "If you think of our generation, we've always had it good. People need to get back to reality because it's been way too hunky-dory for a while."

Kara McGuire • 612-673-7293