Perspective: The economy is robust, but it may not be sufficient for Biden.
Political strategists have long cited James Carville's famous quote "it's the economy, stupid" as a key determinant of who becomes the next president of the United States.
Today, with just a few months to go before the presidential debate between Joe Biden and Donald Trump, we have some very promising economic data. Inflation dropped significantly in May, staying flat month-by-month and rising only 3.3% year-over-year based on the Consumer Price Index (CPI) report released on Wednesday. This is a good sign for Biden, considering this will be the last report before the debate.
Although the Federal Reserve has more work to do to hit its 2% inflation target, it can be proud of its performance as inflation has cooled off significantly in recent months. The tide began to turn around June 2023, when the headline inflation number stood at 9.1% year-over-year. This dramatic reduction is due in part to higher interest rates and decreased spending caused by the pandemic's ebb.
The U.S. economy is in a strong position, with job growth, rising wages, and record employment levels for African Americans and Hispanics. A Federal Reserve report reveals that our economy has returned to its pre-pandemic trends, surpassing most other countries in terms of growth, unemployment reduction, and productivity increases.
Despite these favorable economic statistics, many polls still show an extremely close race between Biden and Trump. It's important to remember that voters tend to consider factors beyond their personal finances when casting their ballot.
While high inflation can leave a bad taste, it's important to note that prices have increased a whopping 19% since Biden took office, whereas average weekly wages have only increased by 15% (though that's not a straightforward comparison due to the changing composition of the post-pandemic workforce). Interestingly, Biden's tenure saw high rates that made large purchases like cars and houses feel less feasible for many.
There's also widespread discussion on Biden's foreign policy missteps, including the fraught situation in Afghanistan, Russia's invasion of Ukraine, attacks by Hamas in Israel, and China's saber-rattling. This uncertainty might lead some voters to yearn for Trump's more aggressive rhetoric and negotiation style.
Adding to these concerns, Biden would be the oldest president ever if he were to win re-election. His health and energy levels have been the subject of occasional media attention, causing people to question whether he has the stamina for the demanding role of President.
As we approach November, economic factors, especially high inflation, will have a significant impact on the outcome. Voters may not forget the pain of 2021 and 2022, but will they choose to overlook it? This could very well decide the winner.
Conclusion
In a nutshell, when it comes to the 2024 presidential race, the economy remains a vital factor, but it may not be the deciding one. Voters look beyond their personal finances and consider various other aspects such as foreign policy, age, and performance when choosing the Presidential candidate they prefer. Standout economic data can help Biden, but it may not necessarily carry him through to victory. The challenges posed by high inflation, Biden's age, and his perceived lack of a firm grip on foreign policy could make this a tighter race than anticipated.
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Based on the current economic data, some political strategists might argue that the robust economy could positively impact Biden's public opinions. However, despite the economic improvements, the presidential race between Biden and Trump appears to be very close, indicating that voters consider various aspects beyond the economy when casting their ballots.
