The U.S. economy has seldom been stronger. The numbers say so.

Those two statements are hard to square. Common sense says so.

What’s going on, and how might it affect the election, now a year away?

As the campaign heats up, economists, political scientists and all sorts of media types have been arguing over the disconnect between economic data and poll data. Is the economy worse than the numbers show, or is something misleading going on with the polls?

Here’s what you should know.

The economic picture

The economist Justin Wolfers puts it this way: Suppose you had fallen asleep in August 2019 and didn’t wake up for four years. On awakening, if you were an economist, the first thing you’d want to know is what the latest data show.

You’d be happily surprised: Unemployment, which was at a historic low when you fell asleep, has remained near that point — 3.8% in September. The economy has grown significantly, even adjusting for inflation, meaning the country has gotten richer. And perhaps most surprisingly, for the first time since before the Great Recession, income distribution has become a bit more equal as the biggest gains have gone to low-wage workers.

In all, you would find that the economy was doing better than most of your colleagues in 2019 had predicted.

“You would wonder what really good thing had happened while you were sleeping,” said Wolfers, a professor at the University of Michigan’s Gerald R. Ford School of Public Policy.

In fact, of course, you would have slept through a vast social trauma brought on by a worldwide plague, accompanied by a short, but very steep, recession. That makes the good economic numbers all the more impressive.

That’s not the entire picture, of course: A wave of price increases has washed through the economy since 2021, peaking in the summer of 2022. and leading the Federal Reserve to sharply increase interest rates. At this point, however, inflation has subsided. The rate the Fed watches most closely now sits just slightly above 3% — higher than the central bank’s 2% target, but not alarmingly so.

“The economy is good. Full stop,” says Wolfers. “That’s the story.”

The polling picture

That’s not the story the polls tell.

Last month, only 16% of U.S. adults said the economy was even “somewhat good,” according to the latest poll for the Associated Press conducted by NORC at the University of Chicago. More than 7 in 10 Americans labeled the economy as some level of poor, with 31% calling it “very poor.”

Over the past year, more than half of registered voters consistently have said the U.S. economy was getting worse, according to weekly surveys by YouGov.

The White House has spent the last year touting economic growth and seeking credit, hoping voters will see Bidenomics as a synonym for success.

So far, that effort has landed with a thud.

A poll released Wednesday by Quinnipiac University found just 40% of voters approved of President Biden‘s handling of the economy, compared with 57% who disapproved. That’s no worse than his overall job approval rating, but it’s certainly not what the Bidenomics campaign was designed to achieve.

What’s going on?

Several theories try to explain the radical gap between the polls and the economic statistics.

One focuses on time lags. Perhaps in another few months, as Americans adjust to lower inflation and higher wages, polls will start pointing upward, that theory suggests.

A second notes that although inflation has slowed, prices remain higher than people were used to. Perhaps it’s the price level, not the rate of increase, that’s weighting down opinions.

“The price of groceries and gas and other things people see and buy day to day is still a shock, even if inflation has slowed. Obviously it hasn’t reversed the increases or even completely stopped them, just slowed their growth,” noted Lanae Erickson, senior vice president of Third Way, a Washington-based Democratic think tank.

Another line of thinking, heard from many Democrats, is that news organizations have colored public opinion by focusing on bad news.

There’s clearly something to that. Conservative media, in particular, has pounded on signs of inflation. But the media’s bias toward bad news has been around for a long time. The disconnect between the polls and the economic numbers is new.

A fourth possibility, more troubling for public opinion research, is that when people respond to questions about the economy, they’re now more likely to be posturing than saying what they really think about financial conditions.

Do the polls still mean what they used to?

What’s the evidence? Typically, when people expect hard times, they pull back on their spending. Americans have done the opposite. Not only is spending up, but so is the rate at which people are opening new businesses, which has risen significantly over the past year.

Or consider the rise of labor militancy. Usually, people don’t go on strike if they believe they’d have a lot of trouble finding another job. Nor do employers usually agree to generous new contracts if they expect a severe economic downturn. But in Hollywood, the auto industry, trucking, railroads and more, unions have struck or credibly threatened to, and companies have given workers much more than before.

The polls themselves also provide evidence that people are responding to something other than their own economic experience.

Before the COVID-19 pandemic, more than 6 in 10 Americans said the economy was in good shape, according to the AP-NORC polls. About 6 in 10 Americans also labeled their own financial conditions as good. That makes sense: The economy is simply the aggregate of every household and business, so those two measures should be in sync most of the time.

Beginning in the spring of 2020, as COVID-19 lockdowns led to widespread business closures and layoffs, the share calling the economy good plummeted. The share rating their own household’s finances as good stayed high. That, too, makes sense: The economy was in a deep recession, but households were being buoyed by trillions of dollars in pandemic aid.

As the economy began to recover, the share calling it good began to climb.

It’s what happened next that suggests a change in what polls are reflecting. In 2022, as the worst of the inflation surge hit, the share who rated their own finances as good declined a little. But the share giving a good rating to the overall economy dropped a lot. The share of Americans who call their own finances good is now about twice as big as the share who call the economy good, NORC’s numbers show.

In other words, a growing number of people say their finances are fine, but the economy as a whole is bad.

Who are those people? NORC found that 82% of Republicans who call their personal financial situation good view the economy poorly. Only 38% of Democrats with good personal finances say the same.

Once again, as in so many cases, partisanship is changing how people see the world.

That doesn’t mean Biden’s suddenly in the clear: Whether people are down on the president because they dislike the economy or down on the economy because they dislike the president, it’s potential trouble for the incumbent.

But for everyone else, it requires a shift: If we really want to know what Americans think about the economy, we may need to start asking different questions.

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