President Joe Biden goes into next year’s election with a vexing challenge: Just as the U.S. economy is getting stronger, people are still feeling horrible about it.
Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception. The divergence could be a decisive factor in whether the Democrat secures a second term next year. Republicans are seizing on the dissatisfaction to skewer Biden, while the White House is finding less success as it tries to highlight economic progress.
“Things are getting better and people think things are going to get worse — and that’s the most dangerous piece of this,” said Democratic pollster Celinda Lake, who has worked with Biden. Lake said voters no longer want to just see inflation rates fall — rather, they want an outright decline in prices, something that last happened on a large scale during the Great Depression.
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“Consumers have been feeling broadly uneasy about the economy since the pandemic, and they are still coming to grips with the notion that we are not returning to the pre-pandemic ‘normal,’” Joanne Hsu, director and chief economist of the survey, said of the overall trend in recent months.
Jared Bernstein, chair of the White House Council of Economic Advisers, stressed that a strong underlying economy is “absolutely necessary” to eventually lifting consumer sentiment.
As the annual inflation rate has fallen, GOP messaging has focused instead on multi-year increases in consumer prices without necessarily factoring in wage gains.
Administration officials had once assumed that better economic numbers would overcome any doubts among voters, only to find that the negativity stayed even as the U.S. economy became likely to avoid a recession once forecasted by economists.
As a result, there’s a lag before a slowing rate of inflation boosts how consumers feel, according to a recent analysis by the economists Ryan Cummings and Neale Mahoney.
Adjusting for government transfers and taxes, the average annual income for someone in the lower half of earners was $34,800 when Biden took office, according to an analysis provided by Gabriel Zucman, an economist at the University of California, Berkeley.
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