In spite of a strong economy on paper, a significant number of Americans feel that their financial situation has worsened under President Biden’s administration. A recent CNN Poll indicates that 58% believe the economy has suffered due to Biden’s policies, up from 50% last year. This sentiment runs counter to hard data that paints an entirely different picture.
When Biden entered office in January 2021, the nation was grappling with a 6.3% unemployment rate and a pandemic-shaken economy.
Fast forward to now, and things look markedly different. Unemployment stands at about 3.5%, marking 18 months at nearly the lowest level in 50 years.
Real wages are increasing, and August celebrated 32 months of consecutive job growth. Yet, despite these positive signs, a disconnect persists between public sentiment and economic indicators.
“People are no longer telling us how they feel about the economy — really, they’re telling us how they feel about the president,” said Justin Wolfers, a professor of public policy and economics at the University of Michigan.
Pain at the Pump and Beyond
Three major factors can be attributed to the prevailing gloom: inflation, the cost of housing and gas, and political polarization.
While inflation has considerably improved from its peak at 9.1% in June 2022 to 3.2% in July 2023, the impact lingers. Prices today are still 18% higher than they were at the end of 2019, before the pandemic began.
For many households, this has resulted in higher everyday costs, including unavoidable skyrocketing gas prices, which add to the economic struggle.
The pinch is particularly felt in the housing sector, with affordability at its lowest point in decades. Mortgage rates, once at a historic low of 2.65% when Biden took office, have risen above 7%, thanks in part to eleven interest rate hikes.
Divided We Stand
The average home price has also surged, making it increasingly difficult for Americans to buy homes. This adds another layer to the public’s economic dissatisfaction.
Political divides further deepen the rift in economic perception. A near-unanimous 91% of Republicans believe the economy has worsened under Biden, while 48% of Democrats feel conditions have improved.
A quarter of Democrats even agreed that Biden’s policies have made the economy worse.
It seems public opinion on the economy is now more a reflection of political views on the President rather than an assessment of actual economic conditions.
The administration faces a dilemma. They have a strong economy by most measures but are failing to make that a compelling narrative for the public. It’s not just about proving the numbers; it’s about making people believe in them.
What This Means for Biden
Former White House senior adviser David Axelrod summed it up best when he said, “You can’t jawbone people into feeling better.”
For Biden, this translates into a need for a different strategy that addresses public perception, possibly focusing on tangible changes people can feel, to win back public sentiment.
While economic indicators suggest that Americans should be optimistic, a combination of lingering inflation, steep housing costs, and political divisions have soured the public mood.
As we move closer to the next election, the challenge for President Biden will be not just to tout economic gains but to bridge the gap between the statistical prosperity and the public’s lived experience.
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