by Mitch Kokai
Senior Political Analyst, John Locke Foundation
President Joe Biden is frustrated. Unemployment has fallen to a healthy 3.6%, the economy is growing at a decent 2.4% rate, and inflation has fallen to 3%. And yet despite all this good economic news, the vast majority of voters rate the economy as poor and blame Biden for its sorry state.
One hint can be found in the most recent CBS News poll, which found that 65% of adults would rate the economy as “bad” and just 13% said that they were getting better financially. Most adults, 52%, said they were just staying in place, while 35% said they were falling behind.
Among those that rated the economy as bad, 88% blamed “inflation and the rising costs of goods and services.” Indeed among all respondents, even those who rated the economy as good, 70% of adults said that their personal income was not keeping up with inflation.
And this perception is reflected in economic numbers. Despite falling inflation, prices are still rising. And overall, real wages are still down 5% since Biden took office. In other words, most voters are functionally making less money today than when Biden took office. No wonder most people think the economy is still bad!
Another consequence of the inflation that voters correctly blame Biden for causing is astronomically high interest rates not seen since the 1970s. This has made homeownership completely unaffordable for young couples looking to start a family.
Worse, higher interest rates have contributed to record high consumer debt. People now owe a record high $17 trillion, including almost $1 trillion in credit card debt alone. That number has shot up by almost 20% since last year. More than a third of all adults now have more credit card debt than emergency savings, an economic predicament not seen since the Great Recession.