Voters See a Bad Economy, Even if They’re Doing OK

The fastest inflation in 40 years feels that Americans are suffering from the economy, even though their finances have been relatively well maintained so far.

According to a New York Times / Siena College survey, only 10% of registered voters say the US economy is “good” or “excellent.” Pessimism is evident when wages rise and the unemployment rate is close to 50. -Minimum of the year. However, the rapidly rising costs of food, gas and other necessities have wiped out rising wages and reduced living standards.

Given that 78% of voters say inflation is “very important” when it comes to voting, the harsh outlook for Americans is for President Biden and Congressional Democrats heading for the midterm elections this fall. The bad news.

It may be bad news for the economy. 1 Long-term index Consumer sentiment has recently hit a record low, other Investigation Similarly, it shows that Americans are becoming more and more nervous about both their finances and the wider economy.

Economist Has been studied for a long time The role of consumer sentiment that may be driven by the media story Indicators that do not represent the broader economy, as certain Grocery price Or a shortage of certain products. At least theoreticallyEconomic pessimism can be self-fulfilling, as consumers withdraw spending, leading to layoffs and ultimately recession.

Christina Simmons grew up poor and has worked hard to lead a better life for her seven-year-old son. She has climbed to the ranks of a health insurance company working near Jacksonville, Florida, and has more than doubled her salary over the past few years. Still, she feels like she’s lagging behind.

“I moved my hips to get to where I am now so that I could take a vacation with my son,” she said. “I took off on the weekend and went to a hotel room in another state, went hiking to see a waterfall, ordered a pizza in the hotel room, and I can’t do that anymore.”

Simmons, 30, can still make money by working remotely, which can save him money on gas. But she’s worried about what happens when the economy slows and jobs are at stake. One of the consequences of her promotion is that she is far from her customers and is more vulnerable to layoffs. She cuts out her modest luxuries, such as her gym membership and evening outings with her friends, to increase her savings.

“I’m saving money in case it gets worse,” she said. “I don’t know what will happen, so I’m stricter than necessary.”

A decision like Mr. Simmons can double across millions of households and help cause the very recession she fears.

They can also have political consequences. Simmons voted for President Donald J. Trump in 2016 and Biden in 2020. However, mainly due to rising costs of her living, she will return to her Republican support in the parliamentary elections in November this year. She doesn’t know how much responsibility Mr Biden is for inflation, she said, but she knows he couldn’t fix it.

Biden and his adviser argue that inflation is a serious problem, but the economy is otherwise strong. They point to a strong employment market, a record recovery in economic production and wage growth, which was the fastest for low-wage workers. However, those arguments failed to soften voters.

Even among Democrats, only 20 percent of voters said the economy was good or great. Among independents, if Democrats want to maintain control of parliament, that number is only 8 percent. (Only 4 percent of Republicans say the economy is on track.)

However, while voters are pessimistic about the economy as a whole, many say their finances are still relatively well maintained. Forty-three percent of voters in the Times / Siena survey said their personal financial situation was good or good. Even among those who said the national economy was “poor,” one-third of voters said they were doing well personally.

Jamie Olegan earns a six-digit salary as director of an alumni association at a private school in Brooklyn and lives in an apartment in Jersey City with a rooftop pool.

But 38-year-old Olegan feels a higher price pinch. Starting July 1, the landlord raised his rent by $ 500 to $ 2,900 per month. She disposed of her car, which cost $ 600 a month between parking, insurance, and loan payments. She was able to work from her home during her summer and saved $ 100 a week by not commuting. She wants to buy her house, but she has no way to do so and she is now thinking of hiring a roommate.

“How does the average person work if I feel alive from salary to salary?” Olegan said. “No one seems to feel immune to this.”

Economists say weak consumer sentiment is unlikely to turn a otherwise healthy economy into a sick economy. But it can already amplify or prolong the bad situation.In a few cases, the official recession declaration and the accompanying media attention Remarkably bad results Than a weak economy that barely escapes the recession.

For example, the relatively short recession of 1990 and 1991 had no obvious cause, such as an asset bubble. Therefore, scholars believe that the cause may be the bad national mood of the Gulf War, soaring oil prices, and rising interest rates.

Still, the link between consumer perceptions and economic outcomes is not simple. For example, since the 9/11 terrorist attacks, sentiment has fallen sharply, but actual spending has recovered sharply.

But unlike 2001, the Federal Reserve is aggressively trying to slow the economy. So Americans have good reason to be wary. Wages have not kept pace with rising prices, housing markets have already begun to cool, and inflation-adjusted consumer spending declined in May. Increasing credit card balances and rising delinquency rates indicate that some households are already struggling to pay their invoices.

According to a Times / Siena survey, high-income earners were worried about the economy, but most of the time they were confident in their finances. However, there are already difficult times among low-income earners and those without a college degree. More than 80% of voters earning less than $ 50,000 are “poor” or “fair” compared to about 30% of voters earning more than $ 100,000. It states.

Soaring gas prices are eating up the money Anna Walker earned as a driver of DoorDash in Southern California. At the same time, she noticed that her customer had few tips. This is because her budget is emphasized.

“We go out and get something to eat.” Wait a minute. Wasn’t this a dollar cheaper a few days ago? “She said. “I have to keep making more and more money.”

During the school year, Walker, 50, drove from the moment he dropped his 11-year-old daughter to school until 7 or 8 pm. Now at summer school, her daughter rides with her. She can’t afford to send her to the camp.

For now, Walker said it could work. But she is one crisis away from the disaster.

“As long as I work, I feel like I’m in a good situation,” she said. “But I know I’ll be homeless the moment the car breaks down.”

Walker voted for Biden in 2020 and considers himself a Democrat. But she said she was disillusioned because Washington couldn’t help her struggling family like her, and she had no plans to vote in November.

“It doesn’t matter if there are more Republicans or Democrats in the House,” she said. “To be honest with you, I don’t think those people care about us at all.”

A Times / Siena survey of 849 registered voters nationwide was conducted by phone from July 5th to 7th using a live operator. The sampling error margin is plus or minus 4.1 percentage points.Crosstabs and methodologies are available here..