Nearly three-fifths of Americans incorrectly believe the United States is in a recession, with most blaming the Biden administration, according to a Harris Poll conducted exclusively for The Guardian. The survey found that pessimism about the economy persists as Election Day approaches.
The poll highlights many misconceptions about the economy, including:
-
Fifty-five percent believe the economy is shrinking and 56% believe the U.S. is experiencing a recession, even though gross domestic product (GDP), the broadest economic indicator, has been growing.
-
49% think the S&P 500 will fall this year, even though the index is up about 24% in 2023 and more than 12% this year.
-
49% believe the unemployment rate is at its highest level in 50 years, although the unemployment rate has been below 4%, the lowest level in nearly 50 years.
Many Americans blame Biden for the economic situation, with 58% of respondents saying the economy is deteriorating due to mismanagement by the president’s administration.
The poll highlights mixed feelings about inflation. The vast majority of respondents (72%) said they believed inflation was increasing. In fact, inflation has fallen sharply from its post-COVID peak of 9.1% and has fluctuated between 3% and 4% annually.
In April, the inflation rate fell from 3.5% to 3.4%, well below the 40-year peak of 9.1% in June 2022, triggering a rebound in the stock market and pushing the Dow Jones index to a record high.
A recession typically refers to two consecutive quarters of reduced economic activity, usually measured as gross domestic product (GDP), although in the United States, the National Bureau of Economic Research (NEBR) has the final say. U.S. GDP has been growing over the past few years, barring a brief contraction in 2022, which NEBR does not consider a recession.
The only recent recession occurred in 2020, at the beginning of the Covid-19 pandemic. Since then, the U.S. economy has grown significantly. Unemployment is also at a record low, wages are rising and consumer spending is strong.
But the road to recovery will not be smooth, mainly due to inflation and the Federal Reserve raising interest rates to curb high prices.
Despite previous hints that the Fed may begin cutting interest rates this year, Fed officials have recently indicated that interest rates will remain high for the near future. Although inflation has slowed sharply since peaking in 2022, officials still say inflation remains elevated as it remains above the Fed’s 2% annual target.
After the turmoil of inflation and high interest rates, voters are unsure of what will happen next. Consumer confidence fell to a six-month low in May.
So while economic numbers like GDP imply economic strength, there’s a huge gap between the reality the numbers represent—what economists use to gauge the health of the economy—and the emotional reality behind how Americans feel about the economy. In the poll, 55% thought the economy would only get worse.
Some refer to this phenomenon as “vibecession,” a term originally coined by economics writer Kyla Scanlon to describe widespread pessimism about the economy that is consistent with showing that the economy is actually The statistics for good performance contradict.
Although inflation has declined, prices remain at higher levels than they were a few years ago. And prices are still rising, just more slowly than at the peak of inflation.
Americans are clearly still feeling the effects of rising prices. In polls, 70% of Americans say their biggest financial worry is the cost of living. About the same proportion (68%) said inflation was their biggest concern.
The poll showed Americans’ economic prospects were little changed from a Harris poll conducted by The Guardian in September 2023.
A similar proportion of respondents agreed that “it’s hard to feel happy about positive economic news when I feel financially strained every month” and that the economy is worse than the media reports.
Another thing that hasn’t changed: Views on the economy depend greatly on the political party to which people belong. Republicans are more likely than Democrats to be frustrated with the economy. A strong majority of Republicans believe the economy is shrinking, inflation is rising and the economy is generally deteriorating. A significant number of Democrats (less than 40%) also hold the same view, but the proportion is smaller.
Not surprisingly, more Republicans than Democrats believe the economy is deteriorating due to mismanagement by the Biden administration.
Republicans and Democrats alike agree on one thing: They don’t know who to trust when it comes to understanding the economy. In September and May, the majority of respondents – More than 60% – express skepticism about economic news.
The economy continues to pose a major challenge to Joe Biden’s re-election. Despite his attempts to tout “Bidenomics” or his domestic economic record, including a $1.2 trillion bipartisan infrastructure bill starting in 2022, 70% of Republicans and 39% of Democrats appear to think he is letting Biden in. The economy gets worse.
But it’s not all bad news for Biden. Republican voters are slightly more optimistic about the lasting impact of “Bidenomics” than they were in a September Harris poll. Four in 10 Republicans say they believe Bidenomics will have a positive lasting impact, an 11-point increase from September, while 81% of Democrats think so too. Three-quarters of respondents said they support at least one of the key pillars of Biden economics, including infrastructure investment, high-tech electronics manufacturing, clean energy facilities and more union jobs.
Yet even with these small pockets of recognition, pessimism about the overall economy remains widespread. It will be an uphill battle for Biden to convince voters to be more hopeful.
“What Americans are saying in these data is: ‘Economists may say things are getting better, but we don’t feel it where I live,'” said John Gerzema, CEO of The Harris Poll. (John Gerzema) said. “Removing four years of uncertainty will take time. Leaders must understand this and bring the public along.
