President Biden faces the challenge of getting the inflation rate down and improving Americans’ perception of the economy as he prepares to campaign for re-election. While the US economy has performed well under his tenure, with 14 million new jobs created, inflation down by more than 5%, and unemployment at 3.7%, the public remains largely unenthusiastic about the economy’s performance, with Biden’s approval rating remaining low. These findings were revealed by a recent Yahoo Finance-Ipsos poll, highlighting a significant disconnect between the country’s economic performance and the public’s perception of it.
President Biden’s Economic Challenges as Inflation Dips
President Biden is faced with two economic challenges as he seeks reelection. First, he must tackle rising inflation and regain Americans’ lost purchasing power due to the price surge in 2021. This is expected to be a slow process as inflation continues to decline, assuming wage stability.
The second challenge may be more perplexing: getting Americans to recognise the economic advancements under his administration. Despite Biden’s regular praise of the thriving job market and public investment, his approval rating remains low, even as inflation drops by over 5 percentage points.
Public Perception of the Economy
A new Yahoo Finance-Ipsos poll uncovers misconceptions about the economy. While Americans grasp inflation’s impact, their understanding of the robust job market and broader US economy seems off. With the creation of 14 million new jobs since Biden assumed office, actual job growth is stronger than public perception suggests.
The same misjudgment extends to unemployment rates. Despite decreasing from 6.3% to 3.7% under Biden, a solid 2 percentage points below the 75-year average, only 25% view this as unusually low.
US Economy’s Global Stance
More misconceptions surface in comparisons with other developed nations. Despite the US economy’s quick recovery from the COVID slump and surpassing GDP growth of most peer countries, only 21% of Americans believe it’s doing better. Furthermore, the declining inflation rate in the US is quicker than in Europe and other regions, yet this seems unnoticed.
Economic Misapprehension Amidst Gloom
Despite falling inflation and faster wage growth, Americans remain pessimistic. The University of Michigan Consumer Sentiment Index has hit recession levels since mid-2021. Possible explanations include the projection of distress from fractious politics, mass shootings, and wars onto economic views, as stated by the Wall Street Journal.
The Yahoo Finance-Ipsos poll suggests many Americans lack basic knowledge about the US economic state. This challenges Biden’s efforts to communicate about the job market and the quick US recovery from COVID, indicating a need for more effective approaches to public education on these matters.
Ipsos conducted this poll for Yahoo Finance from Oct. 20 to Oct. 22, polling 1,103 registered voters.
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