The Economy Is Good Again
Will the president get credit for it? He needs to get out there and take credit — and that means doing more press.
For the first time in four years, the Republican pollster McLaughlin & Associates finds more poll respondents say we’re not in a recession than say we are in one. Of course, the COVID recession ended in April 2020, but ordinary people don’t answer this question the way the National Bureau of Economic Research Business Cycle Dating Committee does. Normal people take this question to mean something like “is the economy doing well?” and increasingly, they are inclined to say yes.
The landing is now looking awfully soft: inflation has moderated very close to the levels where we need it to be, but job growth remains robust. Long-term interest rates, including mortgage rates and the 10-year Treasury bond rate, have bounced back up1 since Fed officials provided more insistent clarity about their lack of intention to cut rates as fast as Wall Street had come to expect. But stock prices have kept going up anyway in spite of the interest rate bounce, a sign that investors believe strong business conditions will make up for the higher cost of capital.
One sign of those strong business conditions was in last month’s jobs report. I keep expecting job growth to taper off and it keeps… not doing that. January’s report reflected a seasonally adjusted gain of 353,000 jobs, and February’s was revised upward to 333,000. Other signals are good, too: Unemployment remains below 4%. Core PCE inflation — the inflation measure the Fed aims to keep at 2% — has in fact been running in that range for 6 months now. And the “soft” data has improved a lot too — beyond that McLaughlin & Associates poll number, there have been three months of surges in the University of Michigan Consumer Sentiment and Conference Board Consumer Confidence surveys.
My 30,000-foot take on the presidential election for a while has been that the economy is doing almost well enough for Biden to win — the polls, after all, are pretty close — and positive economic trends make it likely that we’ll reach “well enough” by Election Day. Relatedly, I’ve thought the pervasive sentiment that things just aren’t working right in America these days has been largely about post-pandemic problems with the economy — people didn’t like not being able to find products on store shelves, they didn’t like dealing with businesses and government agencies that were short-staffed, they didn’t like how expensive things were getting, and they didn’t like seeing their stock portfolios stagnate and their incomes fail to keep pace with inflation.
On all of those counts, the economy is working a lot better today than it was a year ago. But unfortunately, it’s not clear yet if that change in public sentiment is changing voters’ intentions. Last week’s Quinnipiac Poll did show a large shift toward Biden: a six-point lead among registered voters, from a two-point deficit in November. But then NBC News released a poll showing that Biden had lost three points of ground since November — now trailing by five instead of two — and CNN, along with several other pollsters, found no change to the race at all. Biden still trails by 1.9 points in the RealClearPolitics average of polls. And there is a lot for people to be upset about besides the economy. The migration situation has gotten worse — as a New Yorker, I am personally exasperated by the amount of city and state resources that are going to house and care for people who should not have been admitted to the country in the first place — and the war in Gaza divides the Democratic Party coalition.
And then there is the issue of the president’s advanced age. I am skeptical that yesterday’s Special Counsel report will itself have lasting political impact — a majority of voters have been able to develop the view that Biden is too old without needing an official DOJ report to tell them so — but the age concerns do provide an easy frame for voters to take their concerns about whatever just isn’t working and ascribe it to Biden failing to lead.
I share Matt Yglesias’ bafflement at Biden’s small-c conservative media strategy, in which he tries to do few appearances in order to avoid mistakes. As Matt says, this is a strategy for when you’re leading, which the president currently is not. I find the strategy especially baffling because I do not think Biden’s press conferences and media interviews have caused him trouble when he has done them. Biden’s impromptu press conference on Thursday wasn’t great, but it also wasn’t consistent with the narrative that he’s a confused old man who doesn’t understand the questions asked of him. And if he did these sorts of things more often, he’d have more opportunities to drive the news cycle toward topics he finds favorable for his re-election, and he’d demonstrate repeatedly that he’s capable of having a normal conversation and explaining cogently how he’s leading the country. If you talk enough, you’ll make mistakes — you might, for example, identify Abdel Fatah al-Sisi as “the president of Mexico” — but your message will also get out through the mistakes, especially if you keep talking. If you don’t talk, people can just fill in the blanks with whatever selectively-chosen clips they’ve seen of you on the internet.
Biden has a good opportunity to change the narrative by continuing to talk this Sunday: he can belatedly accept the invitation from CBS News to do a nationally televised interview in the lead up to the Super Bowl. If he really isn’t capable of sitting for a good-enough interview with a reporter from CBS News, then he shouldn’t be running for re-election. I believe he is capable of it, but he needs to show the country that. It’s not too late for the White House press office to call up CBS and say the interview is on. Then he’ll be able to get in front of tens of millions of not-especially-engaged Americans and show that he’s not as slow as they’ve heard he is — and he can tell them about all the economic improvements that have been happening on his watch.
So make that call!
In the last quarter of 2023, we saw a surge of stock market excitement as it became clear the Fed was finally going to stop raising interest rates and might even cut them soon. Long-term interest rates fell on these expectations, and that pushed asset prices up, including stock prices. Then Fed officials took steps to temper that enthusiasm — most notably, Jay Powell said explicitly last week that investors shouldn’t expect a rate cut in March.