https://edition.cnn.com/2023/09/07/business/us-economy-biden-approval/index.html

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.”

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971368)

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971370)

This is objectively false. Real wage growth, likely the single most important measure for consumers, has been negative.

So the entire article is thus bullshit

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971377)

>>> 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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971489)

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).

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971847)

https://www.dallasfed.org/research/economics/2022/0215

https://www.nbcnews.com/business/economy/americans-are-finally-getting-raise-thanks-lower-inflation-rcna93844

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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46973271)

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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46974326)

Are you Jewish by chance?

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46974380)

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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46975397)

https://fred.stlouisfed.org/series/LES1252881600Q

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?

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46975288)

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?

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46976627)

“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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971384)

We're still at the top of the roller coaster and it's just starting to pick up speed

Hope you remembered to buckle up! (Your seat belt is broken.)

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971865)

People are spending because shit like food is literally 50% more expensive. What the fuck is this kike klaptrap

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971392)

We have to kill all Jews.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971868)

"Stop complaining about needing to dangerously reshuffle your spending goy. Biden's economic is strong. You're the one that's weak."

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971396)

THAT’S BECAUSE EVERYTHING FUCKING COSTS MORE

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971411)

Haha yeah, goddamn.... uh... "chinks" pushing this bullshit in the, uh... "Chinese-friendly American press"!!!!

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971886)

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971433)

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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46975430)

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.)

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46975503)

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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46975508)

Home prices are up over 60% while real wages are down. WHY DO AMERICANS FEEL BAD ABOUT THE ECONOMY I WONDER?

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971446)

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.

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46975470)

Odd case

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971515)

This happened 10-20 years ago

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#47206305)

*adds shitload of gig workers*

“Look at how many jobs have been created!”

(https://autoadmit.com/thread.php?thread_id=5433092&forum_id=2#46971596)