Americans are feeling a tad more optimistic about the economy, particularly when it comes to jobs and their incomes, a potential boost to President Joe Biden’s re-election prospects. Biden’s approval numbers have dropped amid inflation fears, but Tuesday’s consumer confidence data could help before voters head to the polls next November.
Consumers expect more jobs to be available in the next six months, a figure that went up in November compared to October, according to the Consumer Confidence Survey from the Conference Board. Meanwhile, those who felt there were going be fewer jobs in the next six months declined slightly.
“Consumer confidence increased in November, following three consecutive months of decline,” Dana Peterson, chief economist at The Conference Board, said in a statement Tuesday. “Consumer expectations for the next six months recovered in November, reflecting improved confidence about future business conditions, job availability, and incomes.”
Optimism Is Good For Biden
The more optimistic take on the economy may come as welcome news for Biden. Voters have repeatedly questioned his handling of the economy, according to recent polls.
A New York Times/Siena College poll released earlier this month, that sought opinion from voters in six battleground states, showed 52 percent said they rate current economic conditions as “poor.” Meanwhile, only 37 percent said they trust Biden to do a better job on the economy compared to 59 percent who chose his potential challenger former President Donald Trump.
The Consumer Board’s survey showed that consumer confidence measured higher in households aged 55 and above compared to Americans in the 35- to 54-year-old range. Americans were still worried about rising prices, war and conflict and elevated interest rates. Nevertheless, “general improvements were seen across the spectrum of income groups surveyed in November,” Peterson said.
Some analysts suggested that increased confidence when it comes to the economy is good news, but there’s more work to be done for Biden.
“These numbers are directionally good,” said Joshua Doss, a senior political analyst at HIT Strategies, a Washington, D.C.-based opinion research firm. “Voters might feel a little bit better in this moment but are still bracing for impact.”
The survey showed that expectations of a recession fell to its lowest level in 2023, even as two-thirds of those surveyed still anticipate a slowdown over the next year. The feelings over a recession seemed to dovetail with what some economists recently say that the U.S. economy may achieve a “soft landing,” meaning that despite high interest rates, inflation may moderate without too much damage being done to the labor market.
Recession Would Tank Biden’s Chances
A recession could tank Biden and his chance of winning, Doss told Newsweek.
Doss pointed out one element of the survey that Biden should be worried about.
“There was not so much confidence among voters in in that lower bracket–35 to 54,” he said. “The reason why that’s important is because Biden is not doing particularly well with younger voters right now.”
Millions of young voters will cast their ballot for the first time and Biden’s approval ratings with this section of the electorate leaves a lot to be desired, he said.
“What the economy is to a lot of younger voters–student loan payments, gas and groceries–the Consumer Confidence Index talks a lot about, jobs and wages and sometimes younger voters don’t see that as much, as the economy,” Doss said.
Inflation Was at 40-Year High
The U.S. economy has been in the grip of soaring prices on the back of consumer spending and throttled supply of goods and services that pushed up inflation at one point to a 40-year high. The Federal Reserve responded with aggressive interest rate hikes that elevated borrowing costs for things like housing, car and business investment.
“Buying plans for autos, homes, and big-ticket appliances trended downward on a six-month basis—perhaps reflecting the impact of elevated interest rates,” Peterson said.
Inflation has declined to 3.2 percent in October. While much lower than it was in June 2022 when it hit more than 9 percent, it is still above the Fed’s target of 2 percent. Gas prices have also come down to $3.25 per gallon, the lowest its been since the beginning of the year, according to data from the Federal Reserve Bank of St. Louis. This may explain why consumers surveyed revealed that their “average 12-month inflation expectations receded back to 5.7 percent after a one-month uptick to 5.9 percent,” Peterson said.
Many Still Expect a Recession
Doss, the political analyst, said despite a significant chunk of consumers still expecting a recession the election was still a year away.
Meanwhile, expectations of a recession fell to its lowest level in 2023, even as two-thirds of those surveyed still anticipate a slowdown over the next year.
“There’s work to be done. We’re not in the paid media cycle just yet, right? A lot of what Biden has done has is actually really popular once voters know about it,” Doss said, pointing to policies like allowing Medicare to negotiate the cost of prescription drugs which could lower how much Americans pay for medicine.
“We are a full year out,” he told Newsweek. “We are about ten major news stories away from an election. So, anything predicting what the outcome of the election right now is probably false.”
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.