The real economy, perceptions and voting

The real economy, perceptions and voting

UPDATE DAY

The US electorate is going through a phase of economic pessimism that bodes ill for Democrats in November, but things could change.

This summer at the White House, the favorite topic of conversation is the average price per gallon of gasoline at the pump. For the past ten weeks, that price has been steadily falling and Team Biden's optimism is on the rise.

What can we conclude as the midterm congressional elections approach? ? If it were up to the actual performance of the US economy, this optimism would be justified, but will perceptions catch up with reality in time to avoid the electoral catastrophe anticipated by the Democrats? It may not be unreasonable to believe this.

Despite the ambient gloom and the uncertainty generated by inflation and the rise in interest rates, the American economy is doing fairly well, particularly in terms of employment.

Reality c . insights

After peaking at 14.7% in April 2020, the unemployment rate has returned to its historic low of February 2020, i.e. 3.5%. The US economy has been creating jobs at a blistering pace since the start of 2021, and that pace shows no signs of slowing down. According to Commerce Department data, real average earnings of employees, adjusted for inflation, even increased between February 2020 and June 2022.

During this period, however, polls reveal a marked deterioration in the perception of the state of the economy and an increase in feelings of economic insecurity, linked to inflation unprecedented for decades, but also to media coverage that puts the emphasis on bad news, especially in the right-wing media echo chamber.

Political polarization and the apparent paralysis of institutions does not help. Republican voters refuse to believe that the economy can do well under Democratic leadership. For their part, Democratic voters who wanted major reforms endured months of inaction in a Congress where Republican filibusters exposed their own party's divisions.

And yet, it's running

Still, perceptions mostly catch up with reality, and reality is starting to show signs in favor of the Democrats. This is reflected in the clearly visible fall in prices at the pump and, in the political realm, in the fact that the good news is beginning to outweigh the bad.

That's not to say that hard-core Republican voters will suddenly abandon the Trump cult, but the improvement in some key economic indicators seen over the past few weeks is the kind of trend that, if sustained, may result in enough movement to make tip the scales in favor of the ruling party in several close races.

Democrats will also benefit from the backlash of the electorate against the Supreme Court's rightward shift and the increasingly evident Trumpism of the Republican Party. For example, in a byelection on Tuesday in a polling district in New York State, the Democrat caused an upset by winning against the Republican favorite.

Republicans are still favorites for resume the House of Representatives, but if perceptions catch up with economic and political reality by November, things could take a different turn.

The real economy, perceptions and voting