Americans remain pessimistic about the economy despite tremendous job growth and slowing inflation.
A series of recent polls show that Americans are still grappling with high costs and are unconvinced the US can stave off a recession while the Federal Reserve takes steps to slow the economy.
That poses a challenge for President Biden, who was on a winning streak last week after federal data showed the US added a shocking 517,000 jobs in January and dashed analysts’ predictions of slowing job growth. The unemployment rate fell to 3.4 percent, the lowest level since 1969.
“Taken together, that means we’ve added 12 million jobs since I took office,” Biden said Friday. “This is by far the strongest two years of job growth in history.”
Still, only 37 percent of respondents in a recent Washington Post-ABC News poll said they approve of the economy, while 58 percent expressed disapproval. This is unchanged from February 2022.
A CBS News-YouGov poll released Sunday found that a third of Americans think the state of the economy is “good,” while 61 percent say it is “bad.” That’s an improvement from the previous week, when just 28 percent said the economy was good but lagging behind historical numbers.
The poll, conducted Feb. 1-4, found that 38 percent of Americans expect the US will enter a recession this year and 24 percent expect the economy to slow. Only 20 percent predicted economic growth.
Inflation is still a top priority for voters. And while inflation has eased in recent months – prices fell 0.1 percent from December to January, according to the Labor Department – the cost of essential goods and services remains high.
Real wages have increased recently but are still 1.7 percent below last year’s level. Housing costs have risen 7.5 percent year-on-year, while food prices have risen 11.8 percent annually and continue to rise even as prices of other goods fall, according to Labor Department data.
Patricia Rojas, a New York City-based helpline and database manager at the nonprofit anti-hunger organization WhyHunger, said higher food prices mean more people are calling to access food supplies.
Those affected by hunger mention that items in the dollar store are now $1.25, and some staples like eggs — which cost more than double what they were a year ago — have become too expensive, Rojas said. Pantries run out of items faster because they can’t afford to buy that much.
“I’ve always laughed at people who say the economy is so strong,” Rojas said. “For whom?”
“The economy is strong for people making a certain amount of money, and even then the increases are still there for people making what seems like a lot of money to me.”
Polling data shows that Americans are unimpressed, or in some cases completely unaware, of the slowing inflation.
Two-thirds of respondents to a recent Gallup poll expect inflation to rise, not fall, in the first half of 2023. That’s down from 79 percent last year when inflation was raging.
Another 48 percent of Gallup respondents expect the stock market to decline in the next six months, its highest level on record.
Top economists have been predicting doom and gloom for months, arguing that Federal Reserve rate hikes, which help fight inflation but cannot fully control prices, will send the US economy into recession.
If anything, Friday’s surprise jobs report could have been too strong, forcing the Fed to take more aggressive action to slow the economy, analysts have warned.
The White House has dismissed this rhetoric, arguing that recent economic data show the US can cut inflation without workers losing their jobs.
“These critics and cynics are wrong. While we may suffer setbacks along the way, and there will be some … it is clear that our plan is working because of the determination and determination of the American worker,” Biden said Friday.
The economy is the No. 1 issue for US voters, according to a Pew Research Center poll released Monday. Three-quarters of respondents said strengthening the economy should be a top priority for Biden and Congress.
Most voters give Biden the responsibility of keeping the economy running. 48 percent of respondents in the CBS poll said Biden will be in charge of the economy “a lot” this year, ahead of the Federal Reserve at 39 percent.
Defense and National Security – Questions Remain After Chinese Balloon Crash On The Money – How a Federal Debt Default Could Affect You
While Biden is touting his legislative accomplishments, including the Democrats’ move to cut drug prices, his near-term options will be limited with the House of Representatives in Republican hands.
The White House has turned to executive action to give a boost to workers and consumers. The Biden administration last week introduced a rule to cap credit card fees, an effort officials said would save consumers up to $9 billion a year.
“They have to face the consequences if they are late. They get an avalanche of interest if they’re late. And interest rates are now reaching 20 percent for the average card,” said Rohit Chopra, director of the Consumer Financial Protection Bureau.
Comments are closed.