Welcome to Fivethirtyeight’s politics conversation. The following transcript is slightly arranged.
Nrakich (Nathaniel Rakich, Senior Elections Analyst): For a long time, the economy has been seen as a great responsibility for President Biden in the re -election proposal. Inflation increased in 2021 and 2022 and 9.1 percent rate last June. Same Moon, average gas prices The gallon exceeded $ 5 per galli. And in the second quarter of 2022, gross domestic product 0.6 percent decreased. At that time, only 28 percent of Americans are Biden’s economy July 2022 Quinnipiac University Survey.
However, it has been looking for economic indicators in recent months and Biden started doing the case that economic policies are working. Nevertheless, Americans seem to change their perceptions of management for the economy. ( Last Quinnipiac Survey Put the approval grade to the economy at a rate of 36 percent.
First, let’s determine the scene: What does it say about the health of the economy right now?
Ameliatd (Amelia Thomson-Deveaux, Senior Reporter): For an economy, for an economy allegedly on the verge of a stagnation Now more than a yearlooks pretty good! Real fees Eventually it rises faster than inflationlabor market Slim up However, it is still quite strong for workers and consumers. Still spending A healthy rate.
Monica Potts (Monica Potts, Senior Policy Reporter): Amelia said. The labor market is really strong for beginners. Unemployment 3.8 percentAnd the wages are increasing. Inflation, A little above 3 percentFinally it gets cold. The federal reserve seems to be able to achieve the high -wire movement in reducing inflation without much unemployment.
There are other signs. For example, inflation reduction law encouraged manufacturing investmentWhite House He was very happy to point out.
Amelıatd: In many aspects, the economy seems to finally return to normal before pandemic-but with a little more worker-friendly conditions. He is legendary “gentle down”It seems to actually pass.
Of course, economists’ stagnation forecasts are never very reliable. (This is a fivethhirtyeight avoidance. But still more robier Many people they predicted Even a few months ago.
Gallottmorris (G. Elliott Morris, Data Analysis Editorial Director): Correct. Some of the apocalypse forecasts of a stagnation were never really reliable, but Total Economic Expectations It is still a year or even six months ago, according to what people say. However, there are some indicators that are not very hot. Mortgage And interest rates For example, they continue to climb and Personal savings rate Almost all time at the lowest level. This is a dimension of “economy”, for example, from annual growth in wages, but this is an important dimension.
Amelıatd: Right, elliott and Not clear The Fed was made with the rate increases. A lot will depend on what August 2023 inflation data appear when it appears later this week.
Monica Potts: Yes, I think it points to a really big and lasting problem by asking the voters how they feel about “economy .. The meaning of this term for people can change a lot. Does it mean how much money they make or how much they spend on things like housing and food? Does it mean whether they can get daily care? There is a major change in how people feel about the economy – and there are many different ways where the federal government can have an impact on these things.
Amelıatd: Another question is whether consumer expenditures will begin to decrease – this was a possibility as people to spend Pandemic savings. In general, however, there are other signs that Americans feel good about their financial situation. For example, a Last IPSOS SURVEY He found that the share of Americans, who said that they had enough money to cover an unplanned cost (54 percent), was higher than last year (40 percent). Fewer people say they don’t have enough money to spend what they want after paying their bills.
Nrakich: And still, it is difficult to convince Biden voters that “Bidenomics” is working. From where?
Monica Potts: At the beginning, he inherited a really strange economy to begin. Covid-19 closes caused a serious and dramatic recession, but then the economy began to return. However, people’s behavior also changed. More people were working and moving from home, they had money to spend, and the chains began to start slowly. Thus, the Americans were sour in the economy from the moment they took office.
The healing was affected by super high inflation, as you initially mentioned, most of what Nathaniel and Biden administration has done on the economic policy is a kind of slow -moving policy, which voters don’t really notice. Although inflation is cool, prices are still much higher than before pandemia; Borrowers still see much higher interest rates; I think many of the Americans are often unhappy than the new normal we found ourselves.
Galliottmorris: I think this last point is a really good point, Monica. The share of people who say to the polls The wider economic situation is weak Still since 2018, the highest. At first, it seems difficult to make a square with the pink economic indicators mentioned. However, I think it is possible for people to have longer term memories about economic growth and remember a time when prices are significantly lower.
Many of the discussions on this issue have been decided to monitor or what you have to follow the annual change in the consumer price index or labor market. But if you get a longer opinion, for many families, things are now permanently more expensive. Even if the wages rise, I doubt that they enjoy spending 15 percent more in the grocery store than before. And it will take some time for these memories to fade.
Of course, this is just my theory.
Amelıatd: I mean, some people think the economy is developing. Civiqs’ monitoring survey In particular, it is more likely to say that the current situation of the democrats is quite good or very good (63 percent) compared to a year ago (53 percent). But this is not the question you ask, Nathaniel – not only what people think that the economy is better, but whether people have seen a development and “Yes, Biden is doing this!” Says. And there, it doesn’t seem to get much support for Biden. According to A Last Wall Street Journal SurveyFor example, the share of registered voters, who said that Biden confirmed how they were handled, has not changed significantly since April.
He reaches my theory about what happened. I’m not sure that voters will give a loan for an healing economy, especially under the time of inflation increase. It is not the way he can go in and say, “Look at this chaos that my predecessor has left for me”.
However! This does not mean that these events are not good for him, because the alternative – a sour economy – can really harm him.
Nrakich: Interesting, Amelia. So do you think the smell of the bad economy a few years ago was permanent for Biden? Can’t he never wash even if he fixs it?
Amelıatd: I don’t know permanentBut as Elliott said, prices are still higher. Americans are increasingly believed to stay here with these high prices. Therefore, the fact that people begin to get used to this higher prices and say that the economy has healed can be an indication that Biden has escaped a bullet. So it depends on how you frame it. On the one hand, people don’t give credit, so that’s unfortunate for him. But on the other hand, we may have a normal economy that entered 2024, and it seems increasingly, which you can see as a big gain considering how much economic volatility we have seen since its pandema started.
Monica Potts: I don’t think prices will fall, but it is also possible that people get used to them. As Amelia said, they can cause less damage. And this leaves room for other problems that voters care about rise.
Nrakich: Still question: How important is it to get this win? Historically, what was the correlation between the health of the economy and the chance of re -election of the Presidency?
Amelıatd: Will Biden love “Bidenomic” to appear in high school history textbooks? Certainly. But what really wants is to win re -election, and if people think the economy is worsening, it is less likely.
Galliottmorris: Historically, we know that real economic conditions are very well related to the results of the presidential election. If the situation of the economy is widely positive compared to one or two years ago, the party on duty tends to get a support. Of course, economic indicators do not fully predict the election results, but it has a residual effect.
The good news for the biden on this front is two -way: First, voters tend to start making these retrospective assessments closer to the election. And the second, they Just a few years in the past. This means that things are time for him to be even better and to reward him.
But the bad news for Biden is still time for things to return to him!
