A majority of Americans wrongly believe the US is in a recession – and most blame Biden American economy

Nearly three in five Americans wrongly believe the US is in an economic recession, and a majority blame the Biden administration, according to a Harris poll conducted exclusively for The Guardian. The poll found continued pessimism about the economy as Election Day approaches.

The survey highlighted several misconceptions people have about the economy, including:

• 55% believe the economy is contracting, and 56% believe the United States is experiencing a recession, even though the broader measure of the economy, gross domestic product, is growing.

• 49% believe the S&P 500 stock market index fell this year, even though the index rose about 24% in 2023 and is up more than 12% this year.

• 49% believe that unemployment has reached its highest levels in 50 years, even though the unemployment rate was less than 4%, the lowest level in 50 years.

Many Americans blame Biden for the state of the economy, with 58% of those surveyed saying the economy is deteriorating due to mismanagement by the presidential administration.

The survey highlighted people’s complex feelings about inflation. The vast majority of participants, 72%, indicated that they believe inflation is rising. In fact, the inflation rate has fallen sharply from its post-Covid-19 peak of 9.1%, and has been fluctuating between 3% and 4% annually.

In April, inflation fell from 3.5% to 3.4% – a far cry from the 40-year high of 9.1% in June 2022 – triggering a stock market rally that pushed the Dow Jones Index to a record high.

A recession is generally defined as a decline in economic activity, usually measured by gross domestic product, over two consecutive quarters, although the National Bureau of Economic Research (NEBR) in the United States has the final say. U.S. GDP has been on the rise over the past few years, except for a brief contraction in 2022, which NEBR does not consider a recession.

The only recent recession was in 2020, early in the Covid-19 pandemic. Since then, the US economy has grown significantly. Unemployment also reached historic lows, wages rose and consumer spending was strong.

But the road to recovery has been bumpy, largely because of inflation and the Federal Reserve raising interest rates to bring down high prices.

Although previously indicating that the Fed may begin cutting interest rates this year, Fed officials have recently indicated that interest rates will remain high for the foreseeable future. While inflation has declined significantly since its peak in 2022, officials continue to say inflation remains high because it remains above the Fed’s target of 2% annually.

After a turbulent ride of inflation and high interest rates, voters are uncertain about what’s next. Consumer confidence fell to a Lowest level in six months in May.

So, although economic data, such as GDP, indicate the strength of the economy, there is a stubborn gap between the reality that data represents — what economists use to measure the health of the economy — and the emotional reality that underlies how Americans feel about the economy. In the poll, 55% believe that the economy is getting worse.

Some have called this phenomenon “vibration,” a term first coined by economics writer Kayla Scanlon Describe Widespread pessimism about the economy that challenges statistics that show the economy is actually doing well.

Although inflation has decreased, prices have reached a higher level compared to what they were just a few years ago. Prices are still rising, but at a slower pace than at the peak of inflation.

It is clear that Americans are still suffering from high prices. In the poll, 70% of Americans said their biggest economic concern is the cost of living. About the same percentage of people, 68%, said inflation was their top priority.

The poll showed little change in Americans’ economic expectations compared to a poll conducted by Harris for The Guardian newspaper on the economy in September 2023.

A similar percentage of participants agreed that “it’s hard to be happy about positive economic news when I feel financial stress every month” and that the economy was worse than the media portrayed.

Something else hasn’t changed: views on the economy depend largely on which political party people belong to. Republicans were more likely to report feeling frustrated with the economy than Democrats. The vast majority of Republicans believe the economy is shrinking, inflation is rising, and the economy is generally getting worse. A large but smaller percentage of Democrats, less than 40%, believe the same.

Unsurprisingly, more Republicans than Democrats believe the economy is deteriorating due to the Biden administration’s mismanagement.

There’s something both Republicans and Democrats agree on: They don’t know who to trust when it comes to learning about the economy. In both September and May, the majority of participants were – More than 60% – indicates skepticism about economic news.

The economy remains a major challenge for Joe Biden in his re-election bid. And despite his attempt to sell the “Biden economy,” or his domestic economic record, including a bipartisan $1.2 trillion infrastructure bill starting in 2022, 70% of Republicans and 39% of Democrats appear to think it makes the economy worse. .

But this is not all bad news for Biden. Republican voters were a bit more optimistic about the lasting effects of the “pedium economy” than they were in a Harris poll in September. Four in 10 Republicans, up 11 percentage points from September, indicated they believe Biden’s economy will have a lasting positive impact, while 81% of Democrats said the same. Three-quarters of all those surveyed said they support at least one of the cornerstones of a democratic economy, which include investments in infrastructure, high-tech electronics manufacturing, clean energy facilities, and more union jobs.

However, even with these small threads of agreement, pessimism about the overall economy is widespread. It will be an uphill battle for Biden to convince voters to be more optimistic.

“What Americans are saying in this data is: Maybe economists say things are getting better, but we don’t feel it where I live,” said John Gersema, CEO of the Harris Poll. “Overcoming four years of uncertainty takes time. Leaders must understand that and bring the public with them.”