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The problem with Biden’s and Trump’s economic records: They’re really messy

<i>Tristen Rouse/CNN via CNN Newsource</i><br/>A man watches the CNN presidential debate during a watch party at Union Pub in Washington
Tristen Rouse/CNN via CNN Newsource
A man watches the CNN presidential debate during a watch party at Union Pub in Washington

By Alicia Wallace, CNN

(CNN) — Politics typically comes with plenty of spin.

Even something seemingly unyielding or absolute like a number can get squished and twisted like putty.

As such, flashy economic data points extolled by candidates always come with plenty of asterisks, caveats and “yes, buts.”

In this election cycle, those qualifiers have multiplied in part due to quirks in the numbers themselves: A once-in-a-lifetime pandemic and a once-in-a-generation inflation event sent shockwaves through the economy, distorting data and presidential economic records in the process.

“Interpreting economic data is like interpreting a Monet painting in the best of times,” Mark Zandi, chief economist at Moody’s Analytics, told CNN in an interview. “But in these times, it’s a Monet painting with the Picasso overlaid on top of it. Very difficult to interpret.”

During Thursday night’s presidential debate between President Joe Biden and former President Donald Trump, the echoes from those events were on full display as the candidates sparred over the economy.

“Trump blamed Biden for inflation; that’s misplaced because I don’t think either of them were to blame — the pandemic and Russian war were to blame,” Zandi said. “When President Biden takes credit for all jobs and says Trump lost all the jobs? That’s not fair either, because the pandemic really scrambled things.”

“I don’t think either candidate is on very strong ground by looking at history to discern whether their policies are good or bad. You’d have to use different criteria,” he added.

Not yet at a steady state

Economists, analysts and business journalists can try to tease out portions of the data to try to make better comparisons (one approach Zandi has taken is to evaluate the economy under Trump in 2019 to that of Biden in 2023); however, even once tried-and-true metrics might not tell the full story right now as these shocks are still working their way through the system.

“The economy has not settled into a steady-state equilibrium following the pandemic,” Joe Brusuelas, principal and chief economist at RSM US, told CNN. “And until it does, we won’t have a real good sense of what the new metrics are that reflect the direction in the economy and consumer confidence.”

Twenty years ago, presidential elections came down to “jobs, jobs, jobs,” Brusuelas said. One could take a quick glance at the unemployment rate and the 13-week average of initial jobless claims and get a pretty good sense of who’s going to win the election, he said.

“That’s just simply not the case anymore,” he said. “These elections are much more complex. They’re about deeper cultural affinities and cultural identities, and it’s scrambled the picture when we try to connect what’s going on in the economy.”

Brusuelas said one of his own favorite go-tos in helping to predict election outcomes has changed as well. High labor participation rates for women in their prime working age (25 to 54) was favorable to the incumbent, especially if that person was a Democrat.

That participation rate hit a fresh record high in May; however, the increase possibly could be a reflection of the aftereffect of price shocks and women having to stream back into the workforce to make up for lost income elsewhere, he said.

“We could go on, there are all kinds of other metrics out there that 20 or 30 years ago would have been surefire indications of what’s going to happen in November,” he said. “I don’t think this year that they’re that effective. And they may never be again, because of the changing nature of the economy and society.”

Protein and petrol

Take for example the S&P 500. It’s been going gangbusters and riding the high of Nvidia and the hype around artificial intelligence.

But when you bring that down to the ground level and the individual person, it’s a different dynamic.

“They’re going to be thinking, ‘Wait a minute, all this money’s going into this and can replace the job that guys like me do? I don’t care if the unemployment rate’s 4%. I’m at risk,’” he said.

For the average person, the economic data only means so much anyways, Brusuelas said, adding that it comes down to “protein and petrol” versus percentage points.

“At the end of the day, if we’re talking about the American household, the price of eggs, the price of gas is how this is understood,” he said. “It’s things they see every week.”

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