Economic indicators are becoming a significant factor as the U.S. gears up for another presidential election. President Joe Biden’s administration finds itself where several key financial metrics are moving in its favor. Still, Americans have said in numerous polls that the economy is down despite the numbers. While economic data paints a favorable picture, CNN reported a disconnect between positive indicators and public perception remains. The numbers seem to indicate Bidenomics is working, but the public is not convinced.
Here are six factors.
The U.S. economy experienced a notable growth spurt, with real gross domestic product (GDP) expanding at an annual rate of 3.3 percent in the fourth quarter of 2023, exceeding expectations, according to the Bureau of Economic Analysis. This growth trend, marked by increases in consumer spending and exports, suggests a robust economic foundation as the election approaches.
Economists surveyed by Bloomberg estimated the US economy grew at an annualized pace of 2% during the period.
While inflation had been a concern, recent data indicates a slowdown, offering relief to consumers. A popular inflation measure came in higher than expected. Still, experts believe that as long as the economy avoids recession, positive momentum will continue, contributing to a favorable economic landscape for Biden’s reelection bid. “As long as the economy stays out of recession, the market will keep moving higher, and we will have a positive 2024 (even if the gains aren’t as exuberant as last year),” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, told Forbes.
The U.S. job market demonstrated resilience, showcasing solid growth and a drop in the unemployment rate. This underscores the labor market’s strength and serves as a positive indicator for the overall economy, Reuters reported.
Earnings of S&P 500 companies surpassed expectations, contributing to positive movements in specific stocks and driving market optimism. The stock market’s upward trajectory reflects confidence in the economy’s stability and growth potential.
“Earnings continue to come in better than expected, and contribute to some pretty positive moves in specific stocks,” Michael Arone, chief investment strategist at State Street Global Advisors, told CNBC. “Overall, in terms of sentiment, that’s allowed the market to continue to touch new highs.”
Net worth for the typical U.S. household experienced a significant surge, indicating improved financial well-being for many Americans. This growth in household wealth underscores the positive economic impact felt by individuals and families across the country.
Net worth for the typical U.S. household grew 37 percent, after inflation, from 2019 to 2022, according to the Federal Reserve’s triennial Survey.
The housing market showed signs of improvement, fueled by falling mortgage rates. Forecasts suggest further sales growth in the coming year, highlighting sustained consumer confidence and economic activity in the real estate sector.
“The housing market is off to a good start this year, as consumers benefit from falling mortgage rates,” noted National Association of Realtors (NAR) chief economist Lawrence Yun in the association’s December pending home sales report, according to Bankrate.
President Joe Biden speaks at a solar manufacturing company while promoting his “Bidenomics” rollout, July 6, 2023, in West Columbia, S.C. (AP/Meg Kinnard)