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Why isn’t the growing economy helping public perception of Biden?

Analysis by Zachary B. Wolf and David Goldman, CNN

(CNN) — If Punxsutawney Phil saw no shadow, suggesting an early spring, will Americans look at these new bonkers jobs numbers and begin to warm up to “Bidenomics?”

Americans have for years expressed a general discomfort with the state of the economy, which has helped drag down President Joe Biden’s objectively pathetic approval rating. Despite gloomy perceptions of the economy, people have not stopped spending money, which has buoyed many of the economic indicators that please policymakers.

Evidence of a strong economy has so far been lost on a general public that still feels the pinch of inflation and worries about the uncertainty of life in 2024.

Jobs, jobs, jobs

Data released Friday by the Bureau of Labor Statistics pegged US job growth at 353,000 jobs in January, a stunning figure that doubled economists’ projections. The unemployment rate held at 3.7% and has now been under 4% for two full years.

Employment data is but one indicator. There are others to choose from. The S&P 500, the stock index that tracks the largest publicly traded companies, has been on a record-setting tear, strengthening the balances of many people’s 401(k)s.

Not enough credit, too much blame

The old political adage is that presidents get too much blame for bad economies and not enough credit for strong economies.

The coming general election, shaping up to be a rematch between Biden and former President Donald Trump, offers voters alternate realities to choose from.

Biden and his surrogates are bragging about the economy and trying to convince voters that “Bidenomics,” a term the administration’s embraced, is working.

Trump wants credit for Biden’s economy

Trump, meanwhile has said the economy would tumble and hopes it will happen on Biden’s watch rather than his own. He said the stock market is booming because of the prospect of his victory. And he’s promoting conspiracy theories about the Federal Reserve considering rate cuts to favor Biden.

Instead, as inflation has cooled, the Fed has held rates steady, as it did this week, and transmitted that people should not expect rate cuts in March either.

Everyone from investors to progressive senators are hoping for rate cuts to give people cheaper access to borrowed money and, among other things, unlock the real estate market. But Fed officials clearly want to be more certain that inflation is more under control. Their target for inflation is 2%, and recent reports suggest prices have steadied.

Predicted recession has not come

Rather than suffer the recession that was widely predicted coming out of the Covid-19 pandemic, the economy had a shockingly strong year in 2023 and is expected to grow at an even stronger 4.2% rate in the first quarter.

But that doesn’t mean things are getting cheaper. Americans are still feeling the pinch at the grocery store and everywhere else they spend money.

Signs of a thaw in public opinion, but pessimism still dominates

A new CNN poll shows Biden still has a lot of convincing to do: Perception of the economy remains deep under water. But the mood is heading in a positive direction – which should come as a relief to Biden, because the economy is one of his weakest issues, according to favorability polls.

However, if hiring remains strong and inflation keeps falling, it may become easier for Biden to convince voters he’s doing a good job strengthening the economy.

CNN’s polling editor Ariel Edwards-Levy notes that about half the country, 48%, thinks the economy remains in a downturn. Only 35% of Americans say that things in the country today are going well, which is actually an improvement from the 28% who felt positively about the state of affairs last fall.

She adds that while just 26% of Americans say they feel the economy is starting to recover from the problems it faced in the past few years, that’s also up from 20% last summer and 17% in December 2022.

Frustration with affordability continues

The Fed’s work to control inflation was always billed as tough medicine, and there’s growing frustration with it.

Sen. Elizabeth Warren and other Democratic senators told policymakers in a letter Sunday that they also have a duty to acknowledge that “astronomical” mortgage rates are fueling a housing affordability crisis.

“We urge you to consider the effects of your interest rate decisions on the housing market and to reverse the troubling rate hikes that have put affordable housing out of reach for too many,” Warren and fellow Democratic Sens. John Hickenlooper, Jacky Rosen and Sheldon Whitehouse wrote.

Their letter is proof that the fact of a strong economy is felt, if at all, in different ways.

Anyone hoping to buy or sell a house is not likely to say this is a great economy. Anyone in a sector, like tech, which has suffered massive layoffs, is not likely to say this is a great economy. And anyone who still feels like eggs are more expensive than they used to be may wonder how this can be a great economy.

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