Mellman: The economy recovery: Perception and reality

Pundits continue puzzling over the seeming disconnect between economic reality and public perception.   

The reality is simple: President Biden has presided over a uniquely successful economic recovery. 

 Whether by comparison to American presidents past, or other world leaders present, Bidenomics has proven an extraordinary boon.   

Under President Biden’s leadership 13.2 million jobs have been created, more in two and a half years than any previous president created in a four-year term.    

Unemployment has been under 4 percent for 17 consecutive months, a feat unmatched since the 1960s.    

Biden comes out on top not just compared to previous presidents, but also compared to other world leaders confronting the same post-pandemic circumstances. Economic growth in the U.S. since the pandemic has been faster than in any other major developed economy.   

Not only have jobs increased but inflation has receded, cut by more than half.  

The U.S. has also fared better in the fight against inflation than other developed countries. Inflation over the last year has been lower here than in any other advanced industrial economy.   

New business formation also increased to levels well above the pre-COVID trend.  

So, what White House aides Anita Dunn and Mike Donilon wrote recently is surely true: “This progress wasn’t inevitable or an accident—it has been a direct result of Bidenomics.”   

Americans recognize some of the progress made. For example, when Joe Biden took office, Gallup found just 28 percent saying it was a good time to find a quality job. Today 63 percent hold that view — a huge increase.  

Yet, in a broader sense, Americans remain negative about the economy. When Bill Clinton left the White House in January 2001, 82 percent gave the economy positive marks in CNN polling, and it’s never been that good since. It got close at the end of 2019, before COVID shut the world down, and never recovered. Today just 24 percent give the economy positive grades.  

But it’s worth noting that the surveys seem inconsistent.  

While CNN shows almost no improvement over the last year, the Conference Board found, “Consumer confidence improved in June to its highest level since January 2022” according to their chief economist, Dana Peterson.   

Similarly, the University of Michigan recorded a “striking upswing” in economic assessments.   

But public opinion remains out of sync with economic reality.   

Why?  

Here are a couple of possibilities.   

One we might call COVID hangover. The pandemic dramatically and fundamentally altered views of the economy in short order. In December of 2019, 76 percent thought the economy was in good shape, a number that fell precipitously to 39 percent in less than four months. Between March and April alone, the number dropped 30 points.   

That suggests trauma, and trauma can have lasting effects, making it difficult for people to see a silver lining in an economy, especially one still struggling.  

That struggle is a second possibility.    

Most people don’t live in a job-seeking economy. One hundred sixty-one million Americans have jobs. The 13.2 million jobs created under President Biden pale in comparison to those already extant.   

Moreover, if your neighbor starts a drywall business and asks you to come work for her, you don’t necessarily look to Joe Biden as the creator of your job.   

The economy most people live in, most of the time, is about wages and prices. It’s about what they can and cannot afford as they walk through the store, be it brick-and-mortar or online.  

The reality is that because of COVID related payments, which ended, real disposable income was higher in 2021 than in 2022.   

Inflation outpaced income gains. The lived economy of most Americans was worse. But that seems to be changing as wage gains persist and inflation continues to abate.   

Add to that the increasingly partisan nature of the public’s economic assessments, and we might find that the public’s broad economic evaluations have been rendered less meaningful.   

Mellman is president of The Mellman Group and has helped elect 30 U.S. senators, 12 governors and dozens of House members. Mellman served as pollster to Senate Democratic leaders for over 20 years, as president of the American Association of Political Consultants, a member of the Association’s Hall of Fame, and is president of Democratic Majority for Israel.