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President Biden has begun to embrace the term “bidenomics” in recent weeks as he seeks to sell an economic record that he has so far found to be clearly negative for politics.
There are signs that the selling point is getting easier — although we don’t yet have hard evidence that it aligns with Biden’s political destiny.
This week brought possibly the two best economic news stories for Biden since his first year in office. On Wednesday, it was announced that inflation had fallen to its lowest level since March 2021, Biden’s second full month in office. Then on Friday came the widely watched University of Michigan Consumer Sentiment Index, which showed consumer confidence at its highest level since September 2021. (These two things are often related.)
The latter came in far higher than expected, registering the largest single-month increase (13 percent) since 2005. The former means that wages have now risen faster than inflation for four consecutive months.
This data is subject to the appropriate caveats, including the fact that it is a snapshot. For example, inflation doesn’t fall very evenly from month to month, leading the Federal Reserve to remain cautious about whether its rate decisions have actually paid off. And we continue to live in unusual economic times when the rules often don’t apply.
However, the data raises the obvious question of whether this could lead to a rebalancing of views on Biden, given the long-held dominance of business in voters’ minds. If inflation in particular continues to be moderated, it could remove perhaps Biden’s biggest electoral risk in a 2024 race where he already rivals former President Donald Trump in polls.
The short answer is we don’t have a lot of great data on Biden and the economy this month. But recent action suggests that views on his economic responsibility have recovered somewhat and that the news we’re seeing may be particularly encouraging for him.
A Fox News poll in late June found Biden’s approval of the economy by 22 points – meaning negative views (60 percent) outnumbered positive ones (38 percent). While this isn’t strong territory, the split was Biden’s best since early 2022.
The latest polls we have on Biden and the economy come from The Economist and YouGov. Earlier this week, Biden was revealed to be less than 10 points behind in the Jobs and Economy category, with 41 percent supporting him and 51 percent disapproving. Notably, these numbers were the same for his best of eight editions tested.
A Reuters/Ipsos poll last week on what Americans care about most shows why the second poll looks better for Biden than the first. That’s because the second poll called “jobs” — which continues to be a very strong point for Biden’s economy, with one of the lowest unemployment rates in decades. The poll found Biden is just six points below his score on “Employments and Jobs” but 25 points below on “Economy.”
That Ipsos survey also showed that a fall in inflation and rising consumer sentiment could make a big difference for Biden. Biden was another 34 points down on “Inflation and Rising Prices.” He was also 32 points below inflation in the YouGov poll.
In other words, the reason for negative views on Biden’s economy is clear and lies in inflation. (The YouGov poll also shows that 57 percent of Americans say their best economic indicator is the prices of the goods and services they consume, far more so than the unemployment rate or the stock market.)
To the extent that inflation is no longer viewed as a negative and consumers are more confident, it is highly likely that views of Biden and the economy will improve rapidly as people tend to judge this by his career history.
That’s a big if. It’s also possible that inflation is falling, but not falling enough for people to really feel good about the economy after months of rising prices.
There’s no doubt that this will suddenly become an important subplot as the 2024 campaign gets underway. Democrats historically did well in the 2022 midterm elections, even if inflation was clearly on their side. This was in large part because voters seemed uncertain about the Alternative – a Trump-led Republican party – which looks set to be the Alternative again in 2024.
If this risk of inflation is significantly reduced, the Democrats will suddenly assess their chances much better. And that’s especially important given that many in her party have quietly resented Biden’s ability to carry the ball forward.
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