President Joe Biden Faces Challenge as Economy Strengthens but Public Perception Remains Negative

WASHINGTON — President Joe Biden faces a perplexing challenge as he heads into next year’s election: despite the growing strength of the U.S. economy, people still feel pessimistic about it. According to pollsters and economists, there has never been such a wide gap between the underlying health of the economy and public perception. This divergence could significantly impact whether the Democrat secures a second term in office. Republicans are capitalizing on the dissatisfaction to criticize Biden, while the White House is struggling to highlight economic progress.

Democratic pollster Celinda Lake, who has worked with Biden, expressed concern about the situation, stating, “Things are getting better and people think things are going to get worse – and that’s the most dangerous piece of this.” Lake added that voters no longer simply want to see inflation rates decrease; they now desire a significant decline in prices, a phenomenon not seen on a large scale since the Great Depression.

Despite positive economic indicators, such as the recent employment report that showed the addition of 199,000 jobs in November and a drop in the unemployment rate to 3.7%, people remain pessimistic about the economy, according to the University of Michigan’s Index of Consumer Sentiment. The preliminary December figures indicate a slight increase in sentiment as people recognize a cooling of inflation, but the index remains slightly below its July level.

One potential warning sign for Biden is that sentiment among Republicans has risen dramatically more than among Democrats, potentially indicating increased optimism among GOP voters about winning back the White House in 2024.

Jared Bernstein, chair of the White House Council of Economic Advisers, emphasized the importance of a strong underlying economy in eventually improving consumer sentiment. He argued that as the economy continues to improve, more people will recognize the benefits and sentiment will improve. “We’ve got to keep fighting to lower costs and build on the progress that we’ve made,” Bernstein said. “We just need more time to get these gains to working Americans – that’s our plan.”

The White House has made three major shifts in its messaging in an attempt to build confidence in Biden’s economic leadership. Firstly, Biden began using the term “Bidenomics” to describe his policies, but Republicans quickly turned it into a point of attack. Secondly, Biden started blaming inflation on corporations that increased prices to improve their profits, a message aimed at portraying Biden as fighting for the people against those responsible for fueling inflation. Finally, Biden’s campaign has begun criticizing former President Donald Trump’s track record on the economy.

Republicans, on the other hand, have dismissed positive economic data and focused on how voters feel. They have highlighted multi-year increases in consumer prices without considering wage gains, arguing that people should trust their instincts about the economy rather than the statistics cited by Biden.

Biden’s speeches on the economy have not significantly improved his polling numbers over the past two years. Administration officials had expected that better economic numbers would overcome any doubts among voters, but the negativity has persisted despite the U.S. economy’s ability to avoid a recession as previously forecasted by economists.

Various theories attempt to explain the gap between the major economic data and public sentiment. Besides the impact of the pandemic, social media may have distorted people’s perception of the economy as they observe the lavish lifestyles of influencers. Additionally, people often judge the economy based on their own political beliefs rather than the actual numbers. Furthermore, there may be a lag before a slowing rate of inflation boosts consumer sentiment. The loss of government pandemic aid could also be a contributing factor, as it left people materially poorer. Adjusting for government transfers and taxes, the average annual income for someone in the lower half of earners fell significantly after Biden took office, indicating that wage growth could not compensate for the loss of government support.

In conclusion, President Biden faces a challenging task of bridging the gap between the strong U.S. economy and public perception, which remains negative. The outcome of this divergence could have a significant impact on Biden’s chances of securing a second term in office.