A month ago Biden released a statement praising the “strong” economy and its “steady and stable growth.” At The Atlantic, in May, Annie Lowrey writes, “Joe Biden is, at the moment, losing his reelection campaign. And he is doing so while presiding over the strongest economy the United States has ever experienced.”
Lowrey’s not alone in this assessment that the economy is strong. In a New York Times column last Monday, economist Paul Krugman can’t help but gush over it:
“The performance of America’s economy over the past two years has been remarkable, especially given the dire predictions of many observers. Remember the economists who forecast a recession in 2023? Remember all those warnings that getting inflation down would require years of high unemployment?
“Instead, our economic growth has been the envy of other wealthy nations. Stocks are way up since President Biden took office. Inflation has declined sharply and unemployment is still below 4 percent. The latest numbers seem to support the view that the apparent acceleration of prices earlier this year was a statistical blip, and that disinflation is still on track.”
This is the same economist who said inflation was over if you didn’t consider the price of major goods like gas and food.
Somehow, even something as black and white as the economy has become political. While Krugman, Lowrey and Biden applaud it, others take issue with Biden’s claim that all is well.
The Washington Post’s editorial board wrote that “Telling Americans the economy is good won’t work.” The Financial Times’s editorial board wrote that Biden’s positive message about the economy “risks negating the experience of voters on the ground.” All this raises two important questions: Is the economy doing that great and what do Americans think about it?
It’s partly true that the economy isn’t in the tank. It’s been worse (2008 comes to mind). Wages and salaries increased 4.3 percent for the 12-month period ending in March 2024, according to the Bureau of Labor Statistics. Although it doesn’t appear wages are keeping up with inflation. The unemployment rate is also pretty good, staying around 3.7 percent to 3.9 percent since August 2023. When it comes to the economy, the United States is not the worst place to live.
Inflation is the real kicker though. The Consumer Price Index (CPI) measures inflation. While it’s come down from where it was at around 9% in 2022, at 3.3%, it’s still higher than it was even a year ago. And still significantly higher than where it was in 2020, which was around .1%. Inflation also seems to affect things Americans need daily, like food, gas, clothing, and more. Eggs were approximately $1.40 in 2019 and now they’re $3.80. Inflated prices make many families feel dining out is a luxury they can’t afford. Thanks to inflation, the average family of four now spends $11,434 more per year more to enjoy the same standard of living they did in 2019.
So while it’s a good thing that more folks are employed and wages are increasing, if inflation continues to creep back up (or at least, doesn’t go down), this means average families are still paying more for things they consume daily. Which is why even though by some standards, the economy is doing well, it’s frustrating to hear Biden — or anyone else say it — because things still cost more than they used to. Saying that the economy is good and downplaying or ignoring inflation is like saying your car is running great, but there’s a leak in the gas tank.
New Pew Research data suggests that as of mid-May, only 23% of U.S. adults say the economy is in excellent or good shape, down from 28% in January. Most people, especially those who are employed, don’t consider wages or unemployment when they think about the economy, they just know what they spend when they go to a restaurant, purchase groceries, or buy summer clothing.
It’s disingenuous for the Biden campaign to continue to tout a robust economy when inflation is making even eggs cost double. It’s gaslighting to tell people they’re living in utopia when a family of four had to “find” an extra $11,000 to live on the last few years, while their wages aren’t keeping up, and they aren’t living any better or differently.
Biden’s already struggling in the polls and he should be. He’s been a poor president. Misrepresenting inflation’s effect on the economy is one of the many reasons why.
