Welcome to Fivethirtyeight's Political chatThe regenogram below was slightly edited below.
Nrakich (Nathaniel RakichSenior election analyst): For a long time, the economy was considered a great responsibility for President Biden in his application for a re -election. Inflation increased in 2021 and 2022, climax Bet of 9.1 percent in June last yearField in the same month Average gas prices exceeded 5 dollars per gallon. And in the second quarter of 2022, gross domestic product actually decreased by 0.6 percentThe field was therefore little surprising that only 28 percent of the Americans approved how Baiden copes with the economy in July 2022. University survey QuinnipiacField
But in recent months, economic indicators have been looking for, and Bayden began to prove the case that his economic policy works. More Americans, it seems, do not change their idea of their management of the economyField ( Last Quinnipiac survey Place its rating of the economy by 36 percent.) Therefore, for today's FiveThirtyight Slack chat, I want to study why this is so, and is there a baiden of hope to make the economy winning it in the elections next year.
First, let's set the scene: what is the saying of the economy now?
Amlyaitd (Amelia Thomson-VevSenior Reporter): For the economy, which was supposedly on the verge of a recession for More than a yearIt looks pretty good! Real wages Finally grow faster than inflationlabor market Weakening a bit but still quite strong for workers and consumers Still spending at healthy speed.
Monica Potts (Monica PottsSenior Political Reporter): What did Amelia say. To begin with, the labor market remains really strong. Unemployment in 3.8 percentAnd wages are growing. Inflation, a little more than 3 percentFinally, cools. The federal reserve, apparently, succeeds in its act with a high content of wires to reduce inflation, without causing too much unemployment.
There are other signs. For example, the law on reducing inflation prompted investment in productionWhich is the White House was more than happy to indicateField
Ameliatd: It seems that the economy is finally returning to its puncturemic normal norm, but with conditions that are a little more convenient for workers. That mythical “Soft landing“In fact, it looks as if it could happen.
Of course, the forecasts of economists in economics are never very reliable. (This Time is checked Fivethirtyeight Rearrun.) And things can always change – for example, as Monica recently wrote, The repayment of a student loan is going to restartWhat will mean that millions of Americans have less money to spend when they resume their monthly payments. But this is still a more pink situation than A lot of people Forecasted Even just a few months ago.
GelliottMorris (G. Ellitt MorrisEditorial Director for Data Analystation): This is true. Some of the predictions of Doomer recessions have never been really reliable, but aggregate economic expectations They still get up compared to what people spoke a year or even six months ago. However, there are some not very hot indicators. Mortgage And interest rates continue, for example, rise, and Personal level of savings Almost at a record low level. This is another measurement of the “economy” than, say, the annual growth of wages, but this is important.
Ameliatd: Right, Elliot and This is not clear that the Fed is made with raising bets. Much will depend on how the inflation data in August 2023 look like, when they come out later this week.
Monica Potts: Yes, I think that hints at a really large and persistent problem with the question of voters, that they relate to the “economy”. The fact that this term means to people can vary greatly. Does this mean how much money they earn, or how much do they spend on things like housing and food? Does this mean, can they afford a kindergarten? There is a huge option in how people relate to the economy – and in many different methods of the federal government can affect these things.
Ameliatd: Another question is whether consumer expenses will begin to fall – what was the opportunity as people conduct Their pandemic savings. But, as a rule, there are other signs that Americans feel normally in their finances. For example, a Recent IPSOS survey He found that the share of Americans who say that they have enough money to cover unplanned expenses (54 percent), higher than currently last year (40 percent). Less people also say that after they pay their bills, they don’t have enough money to spend what they want.
Nrakich: And yet, despite this, Biden has problems with the conviction of voters that “Bidenomics” works. Why?
Monica Potts: To start at the beginning, Biden inherited a really strange economy. The closure of the Covid-19 caused a serious and dramatic recession, but then the economy began to bounce. But the behavior of people has also changed. More people worked from home and moved, they had money to spend, and the supply chains are in no hurry to restart. Thus, the Americans, as a rule, have been acidic in the economy since he took office.
The restoration was affected by super-high inflation, as you noted at the beginning, Nathaniel, and much of what the Biden administration has made in the field of economic policy is the type of slow, backstage policy that voters do not really notice. Despite the fact that inflation cools, prices are still much higher than they were before the pandemic; Borrowers still see much higher interest rates; etc. Therefore, I think that in many ways this is that the Americans, as a rule, are unhappy with the new normal we are in.
GelliotottMorris: I think the last moment is really good, Monica. The proportion of people telling the surveys that The wider economic situation is bad Still at the highest level since 2018. At first, this seems to be difficult to move with pink economic indicators that we talked about. But I think that it is quite possible that people simply have more long -term memories of economic growth and remember the time when prices were significantly lower.
Most of the discussion of this topic is attached to tracking annual changes in the consumer price or labor market or what you have. But if you hold longer, for many families, now everything will be more expensive. Even if their wages grew up, I doubt that they like to spend 15 percent more in a grocery store than before the pandemic. And for these memories will take some time to disappear.
Of course, this is only my theory.
Ameliatd: I mean, some people think that the economy is improving. CIVIQS tracking survey It shows that democrats, in particular, are more likely to say that the current state of the economy is quite or very good (63 percent) than a year ago (53 percent). But this is not entirely a question that you ask, Nathaniel is not only whether people think that the economy is getting better, this is whether people see an improvement and say: “Yes, Bayden does it!” And there, it seems, it does not look like Biden gets most of the increase. According to Recent survey Wall Street JournalFor example, the proportion of registered voters who say that they approve of how Baiden copes with the economy has not changed since April.
What comes to my theory about what is happening. I’m not sure that the voters were going to pay tribute to Biden for improving the economy, especially because an increase in inflation occurred under his clock. Not that he could enter and say: “Look at this mess that my predecessor left for me.”
But! This does not mean that this turn of events is not suitable for him, because the alternative – a sour economy – can really hurt him.
Nrakich: Interesting, Amelia. So, do you think that the stinking of a bad economy of the year or two ago constantly for Biden? He can never wash it off, even if he corrects it?
Ameliatd: I don't know about constantBut, as Elliot said, the prices are still higher. The Americans are more and more convinced that these high prices are here to stay. Thus, the fact that people begin to get used to these higher prices and they say that the economy is improving may indicate that Bayden evades the bullet. So it depends on how you create it. On the one hand, people do not give Biden a loan, so this is regrettable for him. But on the other hand, it looks more and more often as if we can have a normal economy, heading in 2024, which you could see in a huge victory, given how much economic instability we saw from the moment the pandemic began.
Monica Potts: I do not think the prices will fall, but it is also possible that people will simply get used to them. Thus, they could less damage Biden, as Amelia said. And this leaves a place for other issues that voters care about growth.
Nrakich: The question is, however: how much does this victory actually matter politically? Historically, what was the correlation between the health of the economy and the chances of re -election of the president?
Ameliatd: Will Biden love Bidenomics to appear in high school history textbooks? Certainly. But he really wants to win the re -election, and this will happen much less if people think that the economy is deteriorating.
GelliotottMorris: Historically, we know that Actual economic conditions are Corrected quite well With The results of the presidential electionThe field if the state of the economy is generally positive compared to a year or two ago, then the current party tends to get an increase. Of course, economic indicators do not completely predict the results of the elections, but they have a residual effect.
The good news for Biden on this front is twice: first, voters, as a rule, begin to make these retrospective estimates closer to the elections. And secondly that they Look only a couple of years in the pastThis means that there is time for things to become even better for him, and that it be rewarded.
However, bad news for Biden is that there is still time for everything to oppose him!
