The economy gave Biden a big thumbs-up in ‘23. Will it last through ‘24? There’s always an “X” factor, but the trend is Biden’s friend
Actually, with the exception of a rocky post-covid 2022, the economy overall and the stock markets in particular have been pretty decent to Joe Biden, and, as the in-your-face ad above illustrates, the White House knows it. Republicans for a long while were getting some political anti-Biden traction out of a nasty episode of post-covid inflation in ‘22, but by last summer, what had been a 9% inflationary rate last year had been whittled down to something on the order of 3%.
Unemployment continues to remain at historic, sub-4% levels, and a majority of consumers, though still complaining about the economy, are spending money briskly.
On the complaining consumer front, this looks to be a classic “don’t go by what I say, go by what I do” situation. Consumer spending being the driver, the overall economy has grown steadily this year. Even South Dakota, which was an economic laggard throughout 2022, was able to keep pace with the rest of the country in ‘23.
As much as the sluggish economy had been a useful talking point for Republicans in 2022, what was then a sign of weakness for Biden has this year turned into a sign of strength for him. My sense is that the economy is starting to fade as a top-of-the-mind issue for Republicans. It barely got a mention in the Republican debates I’ve followed, and polls that say voters think the economy is bad are reflective of the uniform bloc of negativity (called “partisan bias” in the link that follows) that makes polling against Bidenomics look much more daunting than it is.
This, to me, explains the wide divergence between negative consumer sentiment and positive consumer behavior. Given that wages are finally beginning to increase at a rate faster than inflation (as noted in a recent Fortune magazine piece titled, “Surprise: Wage growth has actually outpaced the crushing inflation over the past 2.5 years. The economy appears to be doing better than a lot of people might realize”), it looks like consumers are likely to keep up their buying behavior of recent months.
If that holds true, the economy should continue its steady growth mode, mainly because consumer spending represents 70% of the U.S. economy. Barron’s, which like Fortune is another staple of Republican reading rooms, recently published a piece sub-headed “a resilient labor market and healthy household finances should keep a recession at bay, even if the postpandemic spending boom loses a bit of its vigor.”
Oh, and by the way, how do I know what publications are staples of Republican reading rooms? Well, I was once (1979-1990) a member of the Chicago Board Options Exchange, where, among most of my peers, the words “Democrat” and “liberal” were epithets of the lowest order. Our lounges were littered with copies of Barron’s and Fortune.
Anyway, given all the indicators that look favorable at this point, it’s hard to see anything disrupting the direction of the economy in ‘24. I think it would take a covid-sized shock or a severe escalation of tensions in the Mid-east driving energy prices to new heights to break the trend. Otherwise, the fundamentals are positive and they’re dovetailing for Biden in 2024.
If presidential elections are, as some say, “about the economy, stupid,” then Biden has a pretty good tailwind pushing him into next November.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam.
