President Joe Biden enters the forthcoming election year confronted with a perplexing predicament: Despite the burgeoning strength of the U.S. economy, there persists a prevailing sentiment of profound dissatisfaction among the populace.
Things Are Not So Clear-Cut for a Sitting President
Based to pollsters and economists, a notable disparity has emerged between the fundamental state of the economy and the prevailing public perception. The divergence in question holds significant implications for the potential reelection of the Democratic candidate in the upcoming year.
The Republican party is capitalizing on the prevailing discontent to criticize President Biden, while the White House is encountering limited success in its endeavors to emphasize advancements in the economy.
According to Celinda Lake, a Democratic pollster who has collaborated with President Biden, there exists a concerning discrepancy between the perception of improvement and the anticipation of worsening conditions, which is deemed as the most precarious aspect of the current situation.
Voters Want to See Lower Prices and Lower Inflation Rates
In the words of Lake, there is a shift in voter preferences whereby they no longer merely seek a reduction in inflation rates, but rather, they now express a desire for a substantial decrease in prices. This phenomenon, reminiscent of the notable occurrence during the Great Depression, highlights a significant change in public sentiment.
The individual expressed a sense of perplexity, stating, “To be completely honest, I find myself somewhat bewildered by the matter at hand.”
In accordance to various indicators, the United States economy exhibits a high degree of stability and resilience. The employment report for Friday revealed that a total of 199,000 jobs were added by employers during the month of November, resulting in a decline of the unemployment rate to 3.7%.
The rate of inflation has experienced a significant decline within a relatively short span of time, decreasing from a concerning 9.1% to 3.2% in slightly over a year. This occurrence, which has not resulted in an economic recession, has been referred to by certain previously skeptical economists as a “immaculate” phenomenon.
However, it is worth noting that there exists a prevailing sense of despondency among individuals with regards to the state of the economy, as indicated by the University of Michigan’s Index of Consumer Sentiment.
The preliminary figures for the month of December, released on Friday, indicate a notable increase in sentiment among individuals, suggesting a growing awareness of the gradual moderation of inflation. However, it should be noted that the index continues to remain marginally below its level observed in July.
The survey respondents highlighted the 2024 election as a potential indicator of concern for President Biden. The observed data indicates a substantial increase in sentiment among individuals identifying as Republicans compared to those identifying as Democrats. This finding potentially implies a heightened sense of optimism among GOP voters regarding their prospects of securing the presidency in the upcoming election.
Economics Is Crucial
In the words of Joanne Hsu, the director and chief economist of the survey, there has been a prevailing sense of unease among consumers regarding the economy in the wake of the pandemic. Furthermore, she highlights that individuals are still in the process of comprehending the fact that a return to the pre-pandemic state of affairs is unlikely.
Jared Bernstein, the esteemed chair of the White House Council of Economic Advisers, emphasized the indispensable requirement of a robust foundational economy in ultimately elevating consumer sentiment. The argument posits that with the ongoing improvement of the economy, a growing number of individuals will increasingly acknowledge the advantages therein, consequently leading to an amelioration of sentiment.