Americans remain pessimistic about the economy despite huge job growth and cooling inflation.
A slew of recent polls reveal that Americans are still struggling with high costs and aren’t convinced that the U.S. can stave off a recession as the Federal Reserve takes steps to slow the economy down.
That presents a challenge for President Biden, who took a victory lap last week after federal data showed that the U.S. added a shocking 517,000 jobs in January, blowing away analysts’ predictions of slowing job growth. The unemployment rate fell to 3.4 percent, the lowest since 1969.
“Add that all up, it means we created 12 million jobs since I took office,” Biden said Friday. “That’s the strongest two years of job growth in history by a long shot.”
Even so, just 37 percent of respondents in a recent Washington Post-ABC News poll said they approve of the economy, with 58 percent voicing disapproval. That’s unchanged from February 2022.
A CBS News-YouGov poll released Sunday found that one-third of Americans believe the state of the economy is “good,” while 61 percent say it’s “bad.” That’s an improvement from the previous week, when just 28 percent said the economy is good, but lags historical figures.
The survey, which was conducted Feb. 1-4, found that 38 percent of Americans expect the U.S. to enter a recession this year and 24 percent expect the economy to slow. Just 20 percent predicted the economy would grow.
Inflation is still top of mind for voters. And while inflation has come down in recent months — prices fell 0.1 percent from December to January, according to the Labor Department — the cost of essential goods and services remains elevated.
Real wages have seen recent gains but are still down 1.7 percent from last year. Housing costs are up 7.5 percent year over year, while grocery prices increased 11.8 percent annually and continue to rise even as the price of other goods falls, according to Labor Department data.
Patricia Rojas, a New York City-based hotline and database manager at anti-hunger nonprofit WhyHunger, said that more people are calling in to get access to food pantries due to higher grocery prices.
Those impacted by hunger mention that items at the dollar store now cost $1.25, and some staples like eggs — which cost more than twice as much as they did a year ago — have become too expensive, Rojas said. Food pantries are running out of items faster because they can’t afford to buy as much.
“I’ve always laughed at people who say the economy’s so strong,” Rojas said. “For who?”
“The economy is strong for people that make a certain amount of money and even then, for people who are making what may seem like a lot of money to me, the increases are still there.”
Polling data shows that Americans aren’t impressed by slowing inflation, or in some cases aren’t noticing it at all.
Two-thirds of those surveyed in a recent Gallup poll expect inflation to rise, not fall, in the first half of 2023. That’s down from 79 percent last year, when inflation was raging.
Another 48 percent of those surveyed by Gallup expect the stock market to decline over the next six months, the highest figure on record.
High-profile economists have been predicting doom and gloom for months, arguing that the Federal Reserve’s interest rate hikes, which help fight inflation but can’t fully control prices, will send the U.S. economy into a recession.
If anything, Friday’s surprising jobs report might have been too strong and may force the Fed to take more aggressive measures to slow the economy, analysts warned.
The White House has pushed back on that rhetoric, arguing that recent economic data shows that the U.S. can bring down inflation without having workers lose their jobs.
“These critics and cynics are wrong. While we may face setbacks along the way, and there will be some … it’s clear our plan is working because of the grit and resolve of the American worker,” Biden said Friday.
The economy is the No. 1 issue for U.S. voters, according to a Pew Research Center poll released Monday. Three-quarters of respondents said that strengthening the economy should be the top priority for Biden and Congress.
Most voters put the onus on Biden to keep the economy afloat. Forty-eight percent of those surveyed in the CBS poll said that Biden will be responsible “a lot” for the economy this year, ahead of the Federal Reserve, with 39 percent.
While Biden is touting his legislative achievements, including Democrats’ measure to lower drug prices, his options in the near future will be limited with the House in Republican hands.
The White House has turned to executive actions to give workers and consumers a boost. The Biden administration last week rolled out a rule to cap credit card fees, an effort that officials said would save consumers as much as $9 billion a year.
“They already face consequences when they’re late. They get an avalanche of interest when they’re late. And interest rates now are hitting 20 percent for the average card,” Consumer Financial Protection Bureau Director Rohit Chopra said.
— to thehill.com