President Joe Biden has a lot to be proud of. Riding off a State of the Union speech earlier this month that felt like a victory lap, he and his Cabinet have been blitzing across the country to sharpen his economic message. The Biden administration has sought to contrast Republican threats to Social Security and Medicare with its own legislative work to invest in infrastructure and manufacturing, and bring down the costs of education, health care, and energy.
The image of the accelerating “Biden boom” that the White House has been trying to project is rooted in economic data: unemployment is now at its lowest level since 1969, January saw the seventh straight month of slowing inflation, the economy has continued to grow despite fears of a recession, and over 12 million jobs have been created since Biden took office two years ago.
But why doesn’t it feel that way? The average American is still likely to say the economy is in relatively dire straits, according to Gallup polling data, and large numbers fear worsening inflation, higher interest rates and unemployment, and the possibility of a recession in 2023. Some 80 percent of American adults think the economy is either in poor or fair shape, according to January data from Pew Research Center.
The short answer is, of course, inflation. Prices are still much higher at this point than they were two years ago, and news about expensive eggs and expensive housing are likely still putting a damper on our collective sense of an improving economy.
The White House and its allies face an economic and political conundrum: though inflation is still high, almost every major economic indicator shows that the economy is healthier than when Biden took office, but the general mood among Americans is still sour.
“The bad news of the economy (rising inflation, declining real incomes) has outweighed the good news (mostly consistent growth in GDP, low unemployment),” John Sides, a political scientist at Vanderbilt University, said. “Negative economic news is both more prevalent in news coverage and is also more salient to consumers, relative to positive economic news. So even in an economy with mixed signals, the bad news wins out.”
Still, the normally predictable relationship between Americans’ views on the economy and a president’s approval rating may be changing; the last decade and a half have shown some anomalies.
The link between presidential popularity and the economy
Sides, who has studied the relationship between political prospects and economic news extensively, uses the University of Michigan’s Index of Consumer Sentiment to analyze how down people are on the economy. The index, which measures how people feel about the general economic climate from a monthly random survey of Americans, tells an unsurprising story: though consumer sentiment remains way below the historical average, it has been steadily rising for three consecutive months, and is significantly higher than it was a year ago, matching the trend of cooling inflation. That matches up pretty closely with how people feel about Joe Biden as a president.
For most of the time that index has been collecting data, there was a straightforward correlation between presidential approval ratings and feelings about the economy: better economic news reliably translated into higher approval ratings. But Barack Obama and Donald Trump’s presidencies disrupted this relationship, Sides found. Higher consumer sentiment didn’t translate into a political advantage for either of them, despite the post-Great Recession recovery under Obama and the Trump economic boom.
Back in 2019, Sides theorized that much of this disconnect between the economy and presidential popularity was due to Obama and Trump’s low popularity and the growing polarization of politics — Republicans and Democrats were more likely to feel good or bad about the economy depending on which party the president belonged to. “In short, it’s hard for presidents today to get credit from the other party when they preside over a strong economy,” Sides wrote at the time.
Some of this is true with Biden now; his second-year approval ratings were among the lowest in presidential history. Republicans feel much more negatively than Democrats do about the state of the economy, according to a Gallup poll conducted in January: Among those Americans who felt inflation was likely to worsen, Republicans beat Democrats by more than 20 percentage points, while a plurality of Democrats felt unemployment was likely to continue to go down.
But unlike Trump and Obama, Biden’s approval rating has been more closely tied to visible economic indicators, like gas prices, and inflation in general. “Although Trump’s and Obama’s approval rating did not vary much despite economic swings, Biden’s certainly has,” Sides said.
But Biden’s approval rating is still much higher than Jimmy Carter’s when he dealt with high inflation in the 1970s. “So partisan loyalty among Democrats may be putting a floor underneath [Biden’s] approval,” Sides said.
Despite the hard evidence of an improving economy, Sides said Biden’s approval rating is still being held down by the lingering sense of economic hardships of the last two years. This makes more sense when you think about the kind of economic bad news we’ve seen over the last few years (inflation, rising interest rates, and isolated but flashy layoffs) compared to the good economic news (low unemployment, and cooling inflation). “Inflation is an everyone problem and unemployment is a some-people problem,” the economic columnist Annie Lowrey argued in the Atlantic last year. When things were bad during the Covid recession in 2020, everyone felt fear, but only some people lost their jobs. “The pain was uneven. In contrast, nobody escapes inflation, even if rising prices affect some people far more than others,” Lowrey wrote.
A similar dynamic is why gains in wages, which Biden and the White House have touted, don’t feel like that much good news. Though average wages have risen over the last few months, they aren’t keeping up with inflation, and wages aren’t rising equally for everyone.
That doesn’t mean Americans have stopped spending, though. And this is where Biden’s economic pitch comes in. For some time, the administration has been framing its economic plan as focused on “giving people a little breathing room” in the short run and setting up longer-term fixes to manufacturing supply chains and household costs.
Understanding the “Biden boom”
The president’s recent tours of Wisconsin, Florida, and Maryland demonstrate that message. The White House has been lauding a manufacturing boom that has created 750,000 jobs in areas like the construction of electric vehicle, battery, and semiconductor factories, and investments in infrastructure like ports, railroads, and bridges. The White House believes this will, in the long run, prevent similar periods of high inflation by making the country less dependent on foreign supply chains. It’s also taking place in many states with either historic but dying industrial economies, like Michigan and Wisconsin, or where the new, green tech fields are growing, like Arizona and Utah. At the same time, Biden has been touting the cost-saving relief that the Inflation Reduction Act will phase in this year, like caps on the price of insulin for seniors and lower premiums for health insurance, while attacking Republicans for past suggestions of phasing out entitlement programs like Social Security.
When asked about Biden’s seeming inability to get credit for good economic news, a White House spokesperson referred me to the president’s multiple recent references to “just getting started” and “finishing the job” on the economic recovery in the last two months. The spokesperson also pointed to National Economic Council Director Brian Deese’s recent comments that “it’s understandable that even as personal household circumstances for the majority of people have improved, the anxiety — the economic anxiety is real.”
This dual messaging might be crucial for Biden to get credit for the economic recovery before the 2024 presidential campaign really picks up.
“The American people are nothing but impatient,” the University of Virginia presidential historian Allida Black, who has advised Biden, told me. “They want results now, and I worry that the [president’s economic accomplishments] will take a while for them to be felt. I hope that they do not make the same mistake that the Obama administration made, which was to spend the money but not advertise how the money was spent.”
That might become a tougher challenge for presidents in today’s political climate. Speaking to the New Yorker, Biden’s recently departed chief of staff, Ron Klain, alluded to a larger problem across the world.
“We’re just at a place where, in democracies, we’re going to find that forty-three or forty-four [percent] will turn out to be a very high approval rating, just because people are polarized: the people on the other side are never going to say you’re doing a good job, and for the people in the middle it’s just easier to say, ‘Eh’,” he told the New Yorker’s Evan Osnos.
The better measure of success is elections, Klain said. And Biden will have another chance to prove his messaging and agenda are working next year.