What’s the biggest problem with the US economy right now? The vibes are off.
Allison Morrow
By almost any objective measure, Americans are doing much better economically than they were nearly three years ago, when President Joe Biden took office. Still, a majority — 58% — say Biden’s policies have made economic conditions worse, according to a new CNN Poll conducted by SSRS.
That’s up from 50% a year ago.
But the grim outlook is at odds with the hard data, which reveal an economy bursting with optimism.
“Has the economy improved under Joe Biden? There’s literally no question,” said Justin Wolfers, a professor of public policy and economics at the University of Michigan.
In January 2021, the start of Biden’s term, “everything sucked,” according to Wolfers. Unemployment was at 6.3% and the economy had yet to rebound from the shock of Covid-19. Wolfers described that time as “one of the worst economic moments of my life.”
Two and a half years later, the US economy is in a much healthier spot.
A help wanted sign on a storefront in Ocean City, New Jersey, US, on Friday, Aug. 18, 2023. Surveys suggest that despite cooling inflation and jobs gains, Americans remain deeply skeptical of the president's handling of the post-pandemic economy. Photographer: Al Drago/Bloomberg via Getty Images
The US economy continued to add jobs at a robust pace last month
Unemployment has been hovering near its lowest level in a half-century — roughly 3.5% — for the past 18 months. August marked the 32nd consecutive month of job growth. Real wages (meaning adjusted for inflation) are rising. That’s helped everyone feel confident about continuing to spend money, which keeps the US economic engine humming.
Put another way: People are spending like they’re in a good mood, even if they say they’re not.
“There’s this disjunction between reality and perception that’s as large as I’ve ever seen in my career,” Wolfers told CNN. “If you’d fallen asleep in 2019 and woke up in 2023, you would discover pretty much the sort of economy you would have expected.”
So, why the sour mood?
In short: Inflation, housing and bitter national politics.
How the economy is thriving
Economists are practically stumbling over themselves to revise their growth forecasts higher. Many banks are drastically rolling back or even reversing their expectations for a 2023 recession.
On Wednesday, S&P Global Market Intelligence raised its third-quarter GDP estimate by nearly two percentage points to an annualized rate of 4%, citing surprisingly strong retail sales data. It moved its annual estimate up slightly to a historically strong 2.3%.
An even sunnier outlook comes from the Atlanta Fed’s GDPNow model, which currently expects third-quarter GDP growth at a whopping annualized rate of 5.6%.
The economy is “growing much stronger than we anticipated,” Morgan Stanley economists recently told clients in a research report. The bank now expects GDP for the year to clock in at a 1.9% pace — nearly double its previous projection.
Inflation hangover
Sharply higher prices in 2021 and 2022 marked a painful economic moment for households around the world. In the United States, inflation peaked at 9.1% in June 2022. The euro zone hit 10.6%, while the UK topped 11%.
Americans have continued to spend, signaling optimism about the economy.
Americans have continued to spend, signaling optimism about the economy.
Jamie Kelter Davis/Bloomberg/Getty Images
Inflation has dramatically improved. The United States hit 3.2% in July, according to the latest Consumer Price Index. (The euro zone hit 5.3% in August, while the UK is at 6.8%.)
That means prices overall are still about 18% higher today than they were in late 2019, before the pandemic, according to the Bureau of Labor Statistics.
Despite all of that, real personal consumption expenditures are still growing at a strong pace, said Carola Binder, associate professor of economics at Haverford College. “So it seems that ‘bad vibes’ are not leading to a lot of precautionary saving.”
Gas prices on the rise
Gas prices, which are notoriously volatile, tend to feel like a slap in the face because they are unavoidable — even if you don’t drive, you see the prices on display outside every gas station.
Throughout 2022, gas prices were especially hard to predict as the Russian invasion of Ukraine jolted global commodities markets.
Earlier this summer, US drivers were enjoying big savings on gas compared with 2022. But by late August — around the time the CNN poll was conducted — prices had climbed back up to their highest level in months, just shy of $4 a gallon on average.
Unaffordable housing
The economy feels extra crummy for people looking to buy a home.
Housing affordability is at its lowest point in decades, with mortgage rates climbing above 7% to their highest level in more than 20 years. When Biden took office, mortgage rates were at a record low of 2.65%.
DUMFRIES, VA - AUGUST 13: Single-family homes with ample yards are seen in Dumfries, Virginia, on August 13, 2023. (Amanda Andrade-Rhoades/For The Washington Post via Getty Images)
Home affordability is the worst it has been since 1984
The Fed is partly to blame. Eleven interest rate hikes over the past year and a half have helped push mortgage rates higher, faster.
The median US home price has risen to $416,100 from $258,000 in 2019.
But the affordability issue isn’t just because of higher financing costs. It’s also because of historically low inventory, thanks to a pandemic-era buying spree combined with a lingering shortage rooted in the 2008 subprime mortgage crisis.
The partisan gap
CNN’s latest poll shows that Republicans and Democrats are both souring on President Biden’s handling of the economy.
Only 2% of Republicans and 48% of Democrats said economic conditions had improved under Biden. Nearly a quarter of Democrats said Biden’s policies have worsened economic conditions. Ninety-one percent of Republicans agreed.
“People are no longer telling us how they feel about the economy — really, they’re telling us how they feel about the president,” Wolfers said.
Either way, that poses a political problem for President Biden, whose re-election campaign has sought to highlight the economy’s strengths.
“You can’t jawbone people into feeling better,” said former White House senior adviser David Axelrod on CNN This Morning. “I think the president has to find a way to talk about the things that he’s done in a context other than kind of asking for a report card from the American people.”
Date: October 23rd, 2023 11:16 AM Author: Motley Cyan Mad-dog Skullcap
>>> By almost any objective measure, Americans are doing much better economically than they were nearly three years ago, when President Joe Biden took office
This is objectively false. Real wage growth, likely the single most important measure for consumers, has been negative.
Date: October 23rd, 2023 11:42 AM Author: Motley Cyan Mad-dog Skullcap
Seems like at least some do not
>>> CNN’s latest poll shows that Republicans and Democrats are both souring on President Biden’s handling of the economy.
Only 2% of Republicans and 48% of Democrats said economic conditions had improved under Biden. Nearly a quarter of Democrats said Biden’s policies have worsened economic conditions. Ninety-one percent of Republicans agreed.
Date: October 23rd, 2023 12:53 PM Author: Soul-stirring glassy indian lodge preventive strike
To be fair,
The biggest black pill ITT is that 2% of ***REPUBLICANS*** allegedly believe that the economy has "improved" under Biden.
I realize that some people out there are just genuinely irredeemable <80 IQ retards, but getting two "slam dunk" easy answers wrong (Economy better! Biden did it!) in a single polling question when all of your biases and priors should be helping you to get at least one of those questions correct is truly impressively stupid. Like "oh shit... uhhhh, how do I tie my shoes again durrrr?" level dumb.
Either that or they lied about being "Republicans" (and I mean that in the broadest possible sense, even RINOs with severe TDS should still be saying "no" to at least one of those questions without a second thought).
Real wage growth went slightly negative for a couple quarters when inflation was at its peak, but otherwise it has been positive during Biden's entire presidency.
I think the article is partly correct in that people think the economy is terrible because many thing (particularly housing) are much more expensive than they were in 2019. But I also think that the average wage growth numbers are misleading because they are concentrated in certain industries that had major shortages after the pandemic. I work in tech, and my salary increases haven't come close to keeping up with inflation. But to say that overall real wage growth has been negative is simply false.
Date: October 23rd, 2023 5:44 PM Author: Filthy Marvelous Faggotry
cr PERSONALLY my salary hasn't kept up with inflation but the economists say otherwise so they must be right and I'm wrong. Happy to take one for the team ! Thank you President Biden! 🇺🇲🇺🇲🇺🇲
Date: October 23rd, 2023 10:12 PM Author: Stimulating juggernaut
I'm not defending Biden. I'm just laughing at reptiles who will mindlessly blank bump unsourced claims that make Biden look bad when two minutes of Internet research would have shown that the claims were bullshit. And it's easy to cherry pick data points to make the economy look good or bad under a specific president. Libs love to point out that Trump was the first president since Hoover who presided over a net decrease in jobs during his presidency.
The reality is that the president's ability to influence the economy is actually quite limited. Congress and the Fed have far more power in this area. But people still manage to spin the numbers such that the economy is wonderful when their party is in the White House but terrible when the other party controls the presidency.
Date: October 23rd, 2023 10:08 PM Author: Stimulating juggernaut
Obviously I did, because that's a better measure, as should be obvious to anyone with an IQ over 80. The reason that unadjusted real wage growth looked worse after the pandemic is because most of the jobs that disappeared during the pandemic were low-paying jobs. When employers started rehiring these people, it drove down average unadjusted wages, but that's just because there were more low-paying jobs in denominator. Once adjust for that, the numbers look significantly better.
Date: October 24th, 2023 9:57 AM Author: Stimulating juggernaut
What is the evidence that this has happened? I'm sure there are a ton of programmers and other white collar workers who took jobs as baristas and truck drivers as the economy reopened after COVID? Are you stupid by chance?
You almost certainly don't know any blue collar workers if you are trying to argue with a straight face that real wage growth has been negative. My friend's dad is a truck driver, and he has cleared six figures the last two years. The problem has been that wage growth has been concentrated in a few (mostly blue collar) sectors that bled tons of jobs during the pandemic while housing costs have gone up for everyone. I'm not trying to say that Biden's economy is amazing. I'm just laughing at reptiles like you poasting blatant falsehoods and the huge circlejerk where you think you somehow "owned the libs" by doing so.
There was a huge spike after tons of service workers got let go during the onset of COVID, but since stabilized at basically the level it was pre-COVID. What are you looking at, exactly?
Date: October 24th, 2023 1:29 PM Author: bateful trust fund
But what's the "real wage growth data" you're referencing? I will grant you the 0.5% decline in real wages since pre-COVID. You're the one who kept harping on some magical "real" data, so just show us.
That’s the data - real wages are down since pre-COVID
People are also psychologically not as flush as they were during 2021 while prices for necessities continue to rise significantly. Why should people feel better now than they did pre-COVID when food prices were literally 50% plus lower?
“Real wages” are the hourly rate of pay adjusted for both of these factors. Households have more purchasing power when they rise and less when they fall. For most of 2021 and 2022, they fell. In the second half of 2022, real wages were about 3 percent lower than they were two years earlier, which for the average worker amounts to a loss of nearly $1,800 per year. It is hardly surprising that people’s opinion of the economy has been affected. It would be shocking if it wasn’t.
Date: October 23rd, 2023 11:22 AM Author: Motley Cyan Mad-dog Skullcap
>>> Despite all of that, real personal consumption expenditures are still growing at a strong pace, said Carola Binder, associate professor of economics at Haverford College. “So it seems that ‘bad vibes’ are not leading to a lot of precautionary saving.”
Date: October 24th, 2023 10:01 AM Author: Stimulating juggernaut
This is the especially laughable claim. If anything, I would say that the mainstream media has been making the economy sound much worse than it actually is. When Trump was in office, the media used to regularly talk about the record-low unemployment. Today, despite the fact that record-low unemployment continues and every single jobs report shatters economists' expectations, it barely gets mentioned. And when it does, it usually is along the lines of, "The record-low unemployment is a bad thing, because it means that inflation will continue for longer." Well no shit, Sherlock. Anyone who has taken economics 101 knows that there is a tradeoff between unemployment and inflation. But the media loves to spin any good economic news as doom and gloom.
Date: October 24th, 2023 10:06 AM Author: Greedy Potus
what in the actual fuck are you talking about? today is opposite day again?
yes tard, 30%-200% inflation for everything that actually matters to people is more of a negative than "record low unemployment" that takes gig economy bullshit into the calculation.
Date: October 24th, 2023 10:19 AM Author: Stimulating juggernaut
Good God. Do you actually believe this nonsense? Even housing prices haven't gone up close to 200%, much less anything else. And if wages are keeping with inflation (which they almost always do), then who cares?
As I said below, I do think a big part of the problem was that wage gains in the past few years have been concentrated in a few specific sectors whereas higher housing costs are fucking almost everyone. But it does seem odd that the media barely talks about the historically low unemployment. (And I also laugh at the reptiles who said that Trump was the greatest president ever due to his unemployment numbers, but when Biden produces ever better unemployment numbers, suddenly it is NBD.)
Date: October 24th, 2023 10:20 AM Author: Greedy Potus
"And if wages are keeping with inflation (which they almost always do), then who cares?"
they aren't and it's not even close. and yea, where I live you see plenty of houses that sell for 200%+ of what they did 5 years ago. it's obviously the high end which is why I gave a range, but even 30% as the low is not good.
Date: October 24th, 2023 10:12 AM Author: Stimulating juggernaut
Well, once again real wages aren't actually down, but I think this is the real issue on why many people think the economy is terrible even though, by most metrics, it's actually doing pretty well. A very high percentage of the inflation in the past few years has been in the housing market (both home prices and rents), which is one cost that is unavoidable for basically everyone. A few people (those who bought or refinanced when rates where at post-pandemic lows) made out like bandits, but even those people don't necessarily feel wealthier, because their gains are all on paper (and they probably can't afford to cash in because they would lose their favorable rates). Everyone else is looking at much higher rent/mortgage payments.
And while some jobs have seen huge wage increases since the pandemic ended, these were the jobs that were hit the hardest during the pandemic, so they don't give Biden much credit for that. For those outside of these sectors, their wage increases have probably not kept up with inflation in housing costs, particularly if they stayed at the same job. The hot job market has made it much easier than usual to get a raise by job hopping, but many people don't want to do that.
Hence, due to a combination of factors, you end up with a situation where the "average" person is doing pretty well, but a high percentage of the population feels like they are doing badly, since most of the gains have been concentrated in specific segments of the population while higher housing costs are biting almost everyone in the ass.
Date: October 23rd, 2023 11:34 AM Author: comical sooty hell
Just look at Linkedin -- it's constant layoffs among white collar employees and many of the people who were laid off earlier this year still haven't found new jobs because no one is hiring. It's evil how they're ignoring this and lying constantly
None left. Liberalism (center-left elitist capitalism) has been refuted. It's all down to leftists versus fash now as we fight over the majority who is still trying to figure out what happened.
Date: October 23rd, 2023 12:02 PM Author: pearly vibrant pozpig church
Literally everyone that I’ve talked to IRL will say the economy sucks and has gotten worse, every independent and even most libs will concede that point. Between the fraud jobs reports, housing, groceries/gas prices it’s painfully self-evident. Where are they finding people that will say otherwise? Feels like I’m in the twilight zone
Date: October 23rd, 2023 12:12 PM Author: Titillating green water buffalo nursing home
It's absolutely insane. They conjure up a fraud every 4 years it seems like. 2016 was the Russia hoax, 2020 was the fraud virus, this time around the early contender is fraud economics.
Date: October 23rd, 2023 4:59 PM Author: Greedy Potus
I honestly figured libs would force a recession to happen in 2020 in order to sink trump. turns out they had a "gain of function" virus ready to roll out and forcememed global pandemic instead. great people these libs.
Date: October 23rd, 2023 1:00 PM Author: Soul-stirring glassy indian lodge preventive strike
To be fair,
Glad to see The Adults In The Room(R) who belong to The Party Of Logic And Science(TM) are able to see through all of the Right Wing White Supremacist Conspiracy Theories(C) concerning Biden's fantastic roaring economic miracle!
Date: October 23rd, 2023 1:33 PM Author: Jet trip stage
real wages are up! So poors make 50 dollars more a week and the top few percent make a shit ton more, which means on average poors make a thousand dollars more a week!
Date: October 23rd, 2023 5:01 PM Author: Hairraiser Brilliant Cuckold Station
"By almost any objective measure, except reality, Americans are doing much better economically than they were nearly three years ago, when President Joe Biden took office.
Date: October 24th, 2023 7:10 AM Author: overrated slap-happy trailer park rigor
Maybe I am imagining it, but it seems like we get at least one of these articles from expert economists every week. All with the same theme: don’t believe what you are actually experiencing. Weird
Date: October 28th, 2023 11:22 AM Author: bateful trust fund
We all know "obeezy" doesn't really exist and is just Rudolph, who's obvious goal is just to watch the world burn. As a Real Lib I would think this is obvious to all
Date: December 23rd, 2023 2:45 PM Author: yapping odious idiot
Inflation isn’t rly all that bad if you download the McDonalds app. There are many daily deals that make it easy to feed a a family of four dinner for under $20, especially if your local football team is playing well.
Date: January 30th, 2024 12:07 PM Author: Soul-stirring glassy indian lodge preventive strike
To be fair,
He's too busy "pwning conturds" over how great the Biden economy is and how much Middle America loves Biden's amazing economic miracle in multiple other threads (most of which he also created).
But anyway, suffice to say that anyone who participated in this thread "is a retard" and "embarrassed themselves. ;)"