Nearly three in five Americans wrongly believe the United States is in an economic recession, and the majority blame the Biden administration, according to a Harris poll conducted exclusively for the Guardian. The survey reveals continued pessimism about the economy as Election Day approaches.
The poll highlighted many misconceptions people have about the economy, including:
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55% think the economy is in decline and 56% think the United States is in a recession, even though the broadest measure of the economy, gross domestic product (GDP), is growing.
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49% think the S&P 500 stock index is down for the year, although the index is up about 24% in 2023 and more than 12% this year.
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49% believe unemployment is at its highest level in 50 years, even though the unemployment rate is below 4%, the lowest in almost 50 years.
Many Americans blame Biden for the state of the economy, with 58% of respondents saying the economy is worsening due to mismanagement by the presidential administration.
The poll highlighted people’s complicated emotions about inflation. The vast majority of respondents, 72 percent, said they think inflation is rising. In reality, the inflation rate has fallen sharply from its post-Covid peak of 9.1% and fluctuates between 3% and 4% per year.
In April, the inflation rate rose from 3.5% to 3.4% – far from the 40-year inflation peak of 9.1% in June 2022 – sparking a stock market rally that pushed the index Dow Jones at a record high.
A recession is generally defined by a decrease in economic activity, usually measured by gross domestic product (GDP), over two successive quarters, although in the United States the National Bureau of Economic Research (NEBR) has the latest word. U.S. GDP has been growing in recent years, except for a brief contraction in 2022, which the NEBR did not consider a recession.
The only recent recession occurred in 2020, at the start of the Covid-19 pandemic. Since then, the American economy has grown considerably. Unemployment has also reached historic lows, wages have risen and consumer spending has been strong.
But the road to recovery has been rocky, largely because of inflation and the Federal Reserve’s raising of interest rates to curb rising prices.
Although they previously suggested that the Fed could begin cutting rates this year, Fed officials recently indicated that interest rates would remain high for the foreseeable future. Although inflation has fallen significantly since its 2022 peak, officials continue to say inflation remains elevated because it remains above the Fed’s 2% per year target.
After turbulent inflation and high interest rates, voters aren’t sure what’s next. Consumer confidence fell to a six-month low in May.
So even though economic data, like GDP, implies a strong economy, there is a stubborn gap between the reality represented in that data – what economists use to assess the health of the economy – and the emotional reality that underlies it. -tends the way Americans view the economy. In the poll, 55% think the economic situation is only getting worse.
Some have called the phenomenon “vibration”, a term first coined by economics writer Kyla Scanlon to describe widespread pessimism about the economy, which defies statistics showing that the economy is actually doing well. GOOD.
Even though inflation has fallen, prices are at a higher level than just a few years ago. And prices continue to rise, but at a slower rate than at peak inflation.
Americans are clearly still reeling from rising prices. In the poll, 70% of Americans said their biggest economic concern was the cost of living. About the same percentage of people, 68%, said inflation was a priority.
The poll showed little change in Americans’ economic outlook compared to a Harris poll conducted for the Guardian on the economy in September 2023.
A similar percentage of respondents agreed that “it’s hard to be happy about positive economic news when I feel financially tight every month” and that the economy was worse than the media made it out to be.
Another thing that hasn’t changed: opinions on the economy depend largely on which political party people belong to. Republicans were much more likely to feel depressed about the economy than Democrats. The vast majority of Republicans believe the economy is contracting, inflation is rising and the economy is worsening overall. A large but smaller percentage of Democrats, less than 40 percent, thought the same thing.
Unsurprisingly, more Republicans than Democrats think the economy is deteriorating due to mismanagement by the Biden administration.
One thing Republicans and Democrats agree on: They don’t know who to trust when it comes to learning about the economy. In September and May, a majority of respondents – more than 60% – indicated their skepticism towards economic news.
The economy continues to pose a major challenge for Joe Biden in his re-election campaign. Although he tried to tout “Bidenomics,” or his record on the national economy, including his bipartisan $1.2 trillion infrastructure bill starting in 2022, 70% of Republicans and 39% of Democrats seem to think it makes the economy worse.
But it’s not all bad news for Biden. Republican voters were slightly more optimistic about the lasting impacts of “Bidennomics” than they were in the September Harris poll. Four in 10 Republicans, an increase of 11 percentage points from September, indicated they believed Bidenomics would have a positive, lasting impact, while 81% of Democrats said the same. And three-quarters of respondents said they support at least one of the key pillars of Bidenomics, which includes investments in infrastructure, high-tech electronics manufacturing, clean energy installations and more union jobs .
Yet even with these small waves of approval, pessimism about the economy as a whole remains pervasive. It will be an uphill battle for Biden to convince voters to be more hopeful.
“What Americans are saying in this data is, ‘The economists may be saying things are getting better, but we’re not feeling it where I live,'” said John Gerzema, CEO of Harris Poll . “It takes time to overcome four years of uncertainty. Leaders need to understand this and engage the public.