Image from The White House
Ahead of the 2024 election, a majority of Americans believe that an economic recession currently plagues the nation. According to a Harris poll for The Guardian, there is widespread, misguided pessimism about the economy, with a majority of participants falsely believing in the underperformance of the S&P 500 market index, unemployment rate, and gross domestic product (GDP). In fact, contrary to Americans’ skepticism, there has been growth in each of the aforementioned.
The poll found that Americans attribute their financial difficulties to supposed underperformance by the Biden administration with respect to economic policy-making. However, common metrics for the nation’s financial well-being illustrate quite the opposite. Due to post-pandemic changes in consumer spending habits and the successful financial maneuvering by the administration, the consumer price index (CPI), a basket measurement of goods and services purchased by urban consumers, fell substantially from 9.1 percent in June 2022 to 3.4 percent in April 2024. Likewise, the unemployment rate (3.9 percent in April) hovers at a historic low against the average from the past two decades. The nation’s gross domestic product (GDP) also steadily grows, with a 1.6 percent increase in the first quarter of 2024.
Economists often determine that a recession has occurred when the nation’s GDP has declined for two consecutive fiscal quarters combined with sharp, downward spirals in unemployment and consumer activity — none of which has occurred since the summer of 2022. On the contrary, President Biden touted to NBC TODAY in April that “America has the best economy in the world.”
Within the realm of United States fiscal policy, all seems calm. Yet, it would be presumptuous to dismiss the murmurs of the American electorate as little more than popular caviling fed by conservative media pundits. The Harris poll illustrates that behind the positive macroeconomic performance in the US after the pandemic, working and middle-class Americans were skeptical of the Biden Administration’s economic track record long before the President’s poor debate performance in June.
Although erroneous, the belief in an ongoing recession reveals that economic strain felt by households across the nation exists beyond the macroeconomic data trumpeted by the administration.
As the CPI, GDP, unemployment, and the cost of homes in the United States have readjusted to pre-pandemic levels, a key factor in the economy may be reflected in Americans’ discontent ahead of the election: personal wealth.
Although household nominal net worth has risen between 2020 and 2023 to 19 percent, according to The Wall Street Journal, the gravity felt by consumers falls to a mere 0.7 percent when adjusted for inflation. Furthermore, the wealth held by the average American has fallen drastically in recent years. An LPL Financial article illustrated the excess savings households accrued due to the government’s pandemic-era stimulus programs have declined and ultimately washed away, household credit debt has climbed to $17.69 billion within the first quarter of 2024, and self-reported paycheck-to-paycheck living remains a reality for a staggering 78 percent of Americans, according to a Forbes survey.
“The point that needs to be understood is that consumers see these personal economic indicators every day,” said Merrill Mathews, a resident scholar for the Institute for Policy Innovation, in an article for The Hill. “They can turn off the news and tune out Biden’s economic self-backslapping. But they can’t ignore their own financial conditions.”
American households’ fear of hemorrhaging paychecks and the reality of a populace beset with debt — thereby accumulating greater financial risk — translates into pessimism about future decisions with respect to homeownership and retirement. Despite inflation stabilizing, housing prices continue to rise, placing greater pressure on a rental market already plagued by soaring public demand. Additionally, social security is likely to run out within nine years, leaving prospective and current retirees dubious of their financial security.
The Biden administration has not been awarded the credit it deserves for the post-pandemic economic recovery as reflected in the positive shifts in unemployment, GDP, and the CPI. Although household debt, turbulence within the housing market, and the all-in-all capricious nature of inflation are together a painful reality to Americans living paycheck-to-paycheck, these trends are not unique to this presidency; rather, each (from housing to social security) remain unresolved dimensions of the US economy sustained since before the pandemic, that should not give way to newfound alarmism ahead of a highly contentious election. However, despite supporters and liberal economists singing President Biden’s praise — even going as far as dismissing the working class’ economic grievances as illusions conjured on TikTok — the 2024 election will be determined in part by Americans’ sensitivity to the nation’s post-pandemic recovery beyond the macroeconomic level.
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