Originally Published: 06 FEB 24 08:00 ET
By MJ Lee, CNN
Washington (CNN) — By many metrics, the US economy is humming along. The jobs market is robust; consumers are spending again; and inflation has eased to a three-year low.
That has prompted President Joe Biden to repeatedly ask his advisers: Why then are so many Americans still not feeling great about the economy?
The significant gulf between a string of positive economic indicators and the public’s stubbornly grim sentiment about the US economy has been the subject of the president’s frequent inquiries when he has spoken with members of his economic team in recent weeks and months, sources familiar with those discussions told CNN.
That disconnect looms large over Biden’s political prospects, with White House advisers and campaign officials acknowledging that how Americans feel about the economy could be decisive in determining whether the president can win a second term in November.
Inflation began to spike early in the president’s term and has consistently proved to be one of Biden’s most persistent political problems. While inflation has eased in recent months, prices on most goods are still higher than they were in the spring of 2021.
Still, Biden’s economic advisers are increasingly telling the president in private that they feel optimistic about the direction things are headed. Historic-high prices that plagued the first few years of the Biden administration continue to moderate, all while economic growth is outpacing expectations. Advisers are also reminding the president that with each passing day, the unique trauma of the Covid-19 pandemic is getting smaller and smaller in the rearview mirror for many Americans.
If those trend lines continue, they have cautiously told Biden, consumer sentiment, too, should begin to course-correct.
But one senior adviser to the president told CNN the one thing they have not offered Biden is a prediction for when the American public’s psychology about the economy will have meaningfully improved. “I would never tell the president, ‘Sir, by March 17, we’ll know,’” that adviser said. “I would never say that. No one should, and he wouldn’t believe it if I did.”
Still, White House officials have been encouraged by early indications suggesting the public sentiment on the economy is starting to shift.
A survey from the University of Michigan released Friday showed consumer outlook soar 13% in January, reaching the highest level since the summer of 2021. Several days before that, consumer confidence as measured by the Conference Board jumped to a two-year high. Meanwhile, a recent CNN poll conducted by SSRS indicated pessimism about the economy could be easing, with 26% of Americans saying they feel the economy is starting to recover from problems of the past few years – up from 20% last summer.
But the president confronts a steep uphill battle on the economic front as his reelection campaign prepares for what it expects will be a rematch against former President Donald Trump in November.
A majority of Americans – 55% – said in the recent CNN poll that they believe Biden’s policies have worsened economic conditions in the country, while just 26% believe his policies have improved conditions. The president’s approval rating for handling the economy hasn’t broken the 40% mark since December 2021, and it currently stands at 37%.
While Biden and his advisers hope the economic trend lines will continue in the right direction, aides also acknowledge they have their work cut out for them on convincing voters that Biden’s domestic policies have helped fuel the economic recovery. That also doesn’t factor in the possibility of unforeseen economic obstacles, including those created by geopolitical conflicts.
There is also a delicate balancing act for the president to execute: Touting economic progress while being publicly sympathetic to the reality that many Americans still feel burdened by high prices, including on rent, housing and food.
To that end, Biden has started testing out lines that point the finger at some corporations that he says are taking advantage of the fact that prices were at record highs for so long.
Speaking in Columbia, South Carolina, last weekend, Biden noted the cost of everything from eggs to milk to gas have recently fallen.
“But for all we’ve done to bring prices down, there are still too many corporations in America ripping people off. Price gouging, junk feeds, greedflation, shrinkflation,” Biden added. “America – we’re tired of being played for suckers!”
The sentiment is being pushed by other Democrats, too – Sen. Bob Casey of Pennsylvania recently released a series of reports examining both “greedflation” and “shrinkflation” – terms that refer to companies raising prices on goods at a faster clip than inflation and reducing product sizes without simultaneously lowering prices.
And as Biden addressed culinary union workers at a hotel cafeteria in Las Vegas on Monday morning, he pointed to a classic American candy bar to gripe about shrinkflation. A recent New York Times op-ed by the chief economist of UBS Global Wealth Management that used the price of Snickers bars to examine why so many Americans are still unhappy – despite falling inflation – had caught the president’s eye.
“They haven’t raised the price of a Snickers bar. They just took 10% of it out,” Biden said. “No, no, it’s much smaller. So that’s how they make more money.”
The-CNN-Wire
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Joe Biden
**This image is for use with this specific article only** President Joe Biden speaks to the media at the White House on January 30, 2024.
Evelyn Hockstein/Reuters
06 Feb 24
