Listen to the men who are (one) president of the United States or (two) trying to get that job again and you might think this country has at least two very different economies.
President Joe Biden is trying to win a second term this year by selling an economic rebound, with data to back it all up. But voters sure seem slow to buy that.
Former President Donald Trump paints a picture of looming economic collapse with his standard “only I can fix it” messaging. He went so far earlier this month to openly wish for an economic “crash” in the country this year.
Everyone else is giving off wait-and-see vibes. That's bad news for both Biden and Trump.
Ask economists and people who understand political messaging. They'll tell you, like they told me, that Biden needs voters to feel much better right now about their economic outlook. And Trump needs people to fear it's all teetering on the edge of a cliff.
The truth, as always, is somewhere in the middle of all that. The economy is improving. But it's not all the way back. Inflation is slowing. But things still cost more than they used to. The numbers look good. But numbers don't always go in the direction you want.
Larry Sabato, director of University of Virginia's Center for Politics, told me the economy “is usually a lagging indicator” for voters showing confidence that we’re in an upswing.
“It takes people a while to believe good news in particular,” Sabato said. “Fortunately for President Biden, the economy is clearly turning around at the right time for November.”
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While Trump’s base won’t stray with the news, Sabato added, Biden’s second term hinges on him motivating his own voters and “winning the small number of true independents.”
Here’s what the math shows us about the economy now: America’s economy grew at a rate of 3.3% in the last three months of 2023 and by 2.5% overall for the year.
Trump spent most of his lone term as president bragging about similar numbers.
The Democratic National Committee on Thursday brought receipts, offering links to six times that Trump took credit for economic growth in 2017 and 2018.
In one, Trump said during a July 2017 cabinet meeting that a 2.6% quarterly growth rate that had just been announced “is an unbelievable number.” Two months later, he told reporters flying with him on Air Force One that “everybody was shocked” to see a newly announced quarterly rate of 3%.
Trump is singing a different song these days. Campaigning in New Hampshire Monday, he called Biden “a disaster on the economy.”
Even Trump, in that speech, had to slip in a caveat – “except for the stock market.” He was speaking two days after the S&P 500 hit a record high.
Biden had some fun with that Monday, posting video on the website previously known as Twitter of Trump claiming three days before the 2020 election that the country would see “a stock market collapse the likes of which you’ve never had” if Biden won. That was coupled with a clip from Fox News touting the recent good news about the stock market.
“Good one, Donald,” the current president trolled his predecessor.
Trump has good reason to hope for a bad economy. Any win for Biden makes Trump’s bid for the White House less likely to succeed.
That’s why Trump is trying to kill bipartisan negotiations in the U.S. Senate on legislation to improve border security and reform immigration. That would erase another line of attack for the ex-president.
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Trump is playing to consumer fear while Biden courts them with hope. Fear has always been an easier sell.
We just spent 2023 listening to endless punditry about an allegedly looming recession. And while those warnings are on the wane, they clearly left some lingering doubt, particularly along partisan lines.
A Suffolk University/USA TODAY poll this month showed signs of optimism, but also found that Republicans were far more likely than Democrats to assume the country is currently in a recession rather than in recovery.
Joanne Hsu, director of University of Michigan's Surveys of Consumers, said consumer confidence has been “relatively slow” to rebound in the last year, despite the evidence of an improving economy. But then it jumped by nearly 30% as 2023 became 2024.
“That’s really unusual,” Hsu said. “The last time we saw an increase of that magnitude was in 1991, when we were coming out of a recession.”
That confidence, she added, is reflected among Democrats, Republicans and independents. But she cautions, it's still trending at about 7% of the historical average, compiled since 1978.
James Pethokoukis, who analyzes economic policy as a senior fellow at the American Enterprise Institute, said inflation is “the entire story” about consumer confidence because we all just lived through a spike in increased cost unlike anything seen in the last 40 years. That sticks with people more and longer than other economic news – unemployment, job layoffs, interest rates and so on.
“Inflation, that affects everyone,” he said. “It is a far more pervasive phenomenon. So it was an economic shock.”
And, with inflation, prices are more likely to stop going up than they are to come down. Pethokoukis said this summer will be critical for the economy, consumer sentiment and the presidential election.
“People have short memories,” he said. “They’re going to care a lot more about what happens in the economy in the six months before they go to the polls in 2024 than what happened in 2021 or 2022.”
Expect to hear plenty from Biden between now and November about things looking up. He'll be touting statistics, just like Trump back in 2017 and 2018.
And Trump will spout pessimism nonstop, since a bad economy is good for him. He's already shown a willingness to lie about the data and distort the current economic conditions because that's what he needs to win. The better things get, the more we'll hear about how terrible it all is.
Follow USA TODAY elections columnist Chris Brennan on X, formerly known as Twitter: @ByChrisBrennan
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