The US economy has long displayed many signs of objective strength. Wages have been rising faster than prices for nearly a year. Unemployment has been hovering near half-century lows for even longer. Consumer spending has been robust, while economic growth topped 5 percent in the third quarter of 2023.
Yet for almost all of last year, the public’s appraisal of the economy remained dour. In fact, even as most metrics of economic performance improved, consumer sentiment declined through the autumn. In the University of Michigan’s closely watched gauge of such sentiment, Americans grew more pessimistic about their financial lives, even as wages were rising faster than inflation.
But now: The vibes, they are a-changin’.
In December, consumer sentiment improved by 14 percent, before jumping an additional 13 percent in January. This constitutes the index’s largest two-month gain since 1991, and brings consumer sentiment back to levels unseen since July 2021, before inflation sharply accelerated.
This improvement in Americans’ subjective sense of the economy coincided with fresh objective testaments to its strength. In recent weeks, gas prices have fallen, retail sales have surged, and the stock market has reached a new all-time high.
And yet, over the same period, Joe Biden’s approval rating has barely budged. On November 29, Americans disapproved of the president’s job performance by a 15.9 percent margin, according to FiveThirtyEight’s polling average. Two months of surging consumer sentiment later, Biden’s approval is now underwater by … 16.9 percent.
The president’s standing on the specific issue of the economy is similarly poor, and similarly unchanged. In October, an ABC News/Ipsos poll found that Americans disapproved of Biden’s economic management by a 25-point margin. The latest installment of that poll, released earlier this month, produced the exact same result. And its finding is not atypical. According to poll aggregator…
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