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At this point, the political debate surrounding economic data is familiar and predictable. Democrats will point to historically low unemployment, economic growth, shrinking inflation, rising wages, falling gas prices, and a rising stock market and say, “This is a healthy economy worth celebrating.”
To which Republicans will point to recent polling and say, “Yeah, but the public thinks the economy stinks.”
There are all kinds of competing theories attempting to explain the disconnect between the economic conditions and Americans’ attitudes about the economy, and it’s certainly a topic worthy of robust debate. But we’ve also seen some fresh data of late suggesting a shift in the public’s mood. The Wall Street Journal reported two weeks ago, for example:
Sentiment among U.S. consumers leapt in mid-December, reversing months of declining confidence as easing inflation leaves Americans feeling brighter about the economic future. A preliminary reading Friday of the University of Michigan’s consumer-confidence index show it surging to 69.4 points from 61.3 at the end of November. Economists polled by The Wall Street Journal had expected it to rise less sharply to 62.4.
This week, there was some related news. Reuters reported:
U.S. consumer confidence increased to a five-month high in December, with Americans growing more optimistic about current and future business conditions as well as the labor market, which could help to underpin the economy early next year. The jump in confidence reported by the Conference Board on Wednesday occurred across all age groups and household income levels.
The same data, from the Conference Board’s Consumer Confidence report, found Americans expecting a drop in inflation, too.
Around the same time that report was released, the latest national poll from Quinnipiac University found that a plurality of U.S. voters (48%) believe the economy will continue to improve in 2024, while more than 6 in 10 Americans (62%) said they expect 2024 to be better than 2023 for them personally.
To be sure, it’s best not to overreact to data like this, which can be a bit erratic. But as an election year prepares to get underway, the state of the economy will very likely be the dominant issue for much of the public. The fact that there are hints of optimism is no doubt welcome news at the White House.