Economic 'Vibes' May Be Tilting Toward Biden

The all-important consumer sentiment continues to rise
By John Johnson,  Newser Staff
Posted Feb 20, 2024 9:55 AM CST
One Factor in 2024 Vote: Economic 'Vibes'
President Biden during a discussion on managing the risks of artificial Intelligence in San Francisco, Tuesday, June 20, 2023.   (AP Photo/Susan Walsh)

President Biden has been dogged for much of the past year by what the Economist calls an "emotional disconnect" on the economy. Growth has been strong, but Americans have remained in a lousy mood about money, thanks largely to high prices across the board. Now, however, a closely watched gauge suggests that might be changing.

  • Key stat: A monthly survey of consumer sentiment by the University of Michigan came in at 79.6 in February, its highest mark since the summer of 2021, reports Quartz. What's more, the collective increase over the last three months is the biggest in more than three decades, notes the Economist.

  • Vibes: "We do think about vibes, because historically the vibes—consumer sentiment and business sentiment—have been good predictors of consumer spending and business investment," said Chicago Fed president Austan Goolsbee recently. In the view of Quartz, the Michigan stats suggest the "American vibes recession is over."
  • Politics: All of which is good news for Biden in theory, reports the New York Times, which talks to economist Neil Dutta. "If sentiment simply hovered at today's levels, he said the simple historical relationship between consumer confidence readings and incumbent vote share would give Mr. Biden about 49% of the vote," per the story in January. "But the job market is strong, gas prices are moderate, and the stock market just hit a new record, all of which could drive further improvement." In fact, sentiment as measured by the Michigan survey ticked up from 79 to 79.6 since he spoke.
  • Then again: It's an unusual election. "Geopolitics and domestic issues could throw curveballs into this cycle, too," writes Lora Kelley at the Atlantic. "That consumers seem more upbeat about the economy is certainly not unwelcome news for Biden, but a lot can happen between now and November."
(More US economy stories.)

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