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Biden’s economy is soaring, but voters still see bleak

The contrast between the way the economy is performing on paper and how it feels in practice has made it difficult for Mr. Biden to capitalize on politically, by most measures, a strong economic recovery in the region. history even after prices soar.

Mr. Biden can take some comfort from the last president to experience a similar combination of strong growth and rapid inflation: Ronald Reagan. Mr. Reagan, too, faced an economy that was struggling with rising prices and a troubled supply curve at the start of his term. He, too, struggled at first to convince Americans that the economy was on the rise. However, in 1984, the message “morning in America” ​​led him to a landslide re-election victory.

There are important differences between the two eras. Mr. Reagan took office near the culmination of “Great inflation“Of the late 1970s and early 1980s, when interest rates were very high; By 1984, price growth and borrowing costs both fell. Economic growth also accelerated near the end of Reagan’s first term, while most forecasters now expect growth to slow as the post-pandemic boom fades. And Mr. Reagan ran for re-election in an era when views on the economy were much less divided than they are today.

The conundrum that Mr. Biden is facing is evident in the numbers of polls and opinion polls.

ONE Gallup survey conducted this month found that Americans view the economy more negatively than positively: Only 29% say the economy is improving, while 67% believe it is getting worse.

Consumer expectations data conducted by the Federal Reserve Bank of New York showed that a high percentage of consumers expect to be financially worse off a year from now: 26.3% in December, compared with 9.9% at the end of 2019, before the coronavirus outbreak. That change came as inflation expectations tracked by the same survey has increased.

Part of the gloom is certainly related to the protracted pandemic. While people hold out hope that the economy will reopen and life will return to normal when a vaccine becomes available, continuing waves of infection have prevented that from happening.

“There was a lot of optimism a year ago,” said Karen Dynan, a Harvard economist and former Treasury official in the Obama administration. “We got the vaccine faster than we thought, and we thought our lives would be able to get back to normal, and people just expect the economy to go with that. And maybe that’s a bit naive. “

https://www.nytimes.com/2022/01/27/business/economy/biden-economy-politics.html Biden’s economy is soaring, but voters still see bleak

Fry Electronics Team

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