Americans are growing more optimistic about the economy — but it's not helping President Biden just yet

• Americans are feeling better about the economy, surveys from the University of Michigan and Gallup show.
• But many voters still trust Donald Trump over President Joe Biden when it comes to the economy.
• The growing economic optimism may have been fueled by Democrats, many of whom already supported Biden.

Americans aren’t feeling as gloomy about the economy as they used to, but President Joe Biden is still waiting for this to show up in the polls.

Over the past year, economists have puzzled over the apparent disconnect between Americans saying they feel pretty bad about the economy and the generally strong economic data — which suggests things are going well.

While this disconnect remains, it seems to have become a bit smaller in recent months. In January, the University of Michigan's consumer sentiment index, an oft-cited gauge of economic vibes, rose to its highest level since July 2021, and it rose yet again — albeit modestly — in February. Between November and January, the index saw its biggest two-month increase since 1991.

Last October, 21% of the roughly 1,000 Americans surveyed by Gallup said the economy was “getting better,” according to survey data provided to BI. In January, this rose to 30%.

But if one looks at the polls, they might think Americans’ opinion of the economy hadn’t budged much.

Only 38% of Americans approve of President Joe Biden’s handling of the economy — down from 40% in December — according to a February survey of over 1,000 Americans conducted by the Financial Times and the University of Michigan. Forty-two percent of respondents said they trusted Donald Trump more than Biden to handle the economy — 31% trusted Biden over Trump. A February ABC News/Ipsos poll showed a similar trust gap.

This survey data and other concerns voters have about Biden are among the reasons he’s trailed Trump in some recent national and state polls.

It could mainly be Democrats who are feeling better about the economy

There could be several reasons Americans’ growing optimism about the economy improving hasn’t translated into better polling for Biden.

One possibility: It’s mostly Democrats who are feeling better about the economy, and they were already likely to support Biden.

Gallup’s survey provides some evidence for this. Between October and January, the share of Democrats who said the economy was “getting better” rose from 45% to 64%, while the share of Republicans who thought the same grew from 4% to 7% — the share of Independents grew from 18% to 24%.

However, the University of Michigan’s data suggests growing optimism across party lines. In January, consumer sentiment among Democrats rose to the highest level since June 2021, although it dipped back down a bit in February. Republicans also seemed more optimistic, with their sentiment growing by nearly 10 points from January to February. Sentiment among Independents rose to its highest level since July 2021.

Still, the Michigan data showed a big gap between Democrats and Republicans, even as the right feels more optimistic. The last time Democrats’ sentiment was about as low as Republicans’ February level was in the late summer of 2020.

As economist Paul Krugman recently pointed out on X, Republicans in the Michigan survey had been feeling considerably worse about the current economy than they did in June 2009 — right in the middle of the Great Recession. That's improved, though, with the latest February reading.

Some Americans still have reason to be down on the economy

Another explanation for why improving economic vibes hasn’t provided Biden a polling boost: the vibes still aren’t great compared to historical levels.

Per the Michigan index, Americans were still more sour on the economy in February than they were every month between December 2013 and early 2020 — when the pandemic caused sentiment to plunge.

Some experts have speculated that the rise of political partisanship across the US is partially responsible for this. If someone doesn’t like the current president, they might not like the economy — no matter how strong it might seem.

But there are also understandable reasons Americans might still be down on the economy. Inflation might be slowing, but that just means prices aren’t growing as fast as they once were. Many Americans’ grocery bills are still quite a bit higher than they were a few years ago. While shoppers will likely adjust to these prices over time — and wage growth should make them a bit easier to swallow — this transition won’t happen overnight.

Even the jobs landscape isn’t quite as pristine as it once was. While the national unemployment rate remains low relative to historic levels, the jobless rate is at least 4% in thirteen states, the highest number since December 2022.

Of course, it’s possible that more voters are growing more optimistic about the economy — and may even be willing to give Biden some credit for things like falling inflation and low unemployment.

But many of these people might be hesitant to back Biden due to non-economic factors, such as his age, his handling of Israel’s war in Gaza, or other political reasons.

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By: [email protected] (Jacob Zinkula,Noah Sheidlower,Juliana Kaplan)
Title: Americans are growing more optimistic about the economy — but it's not helping President Biden just yet
Sourced From: www.businessinsider.com/president-joe-biden-donald-trump-economy-voters-polls-jobs-inflation-2024-2
Published Date: Fri, 16 Feb 2024 15:20:22 +0000

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