President Biden clearly knows he needs to get inflation down and earn better marks on his handling of the economy to clinch his 2024 reelection odds. Biden talks about the economy all the time and usually acknowledges that there’s more work to do on inflation.
But he may have a few vulnerabilities not immediately evident in the usual economic data. Like other polls, a new Yahoo-Finance Ipsos survey found broad dissatisfaction with Biden on the economy. Just 17% of respondents said Biden’s policies have helped them, while 46% said Biden’s policies have hurt. That’s consistent with other polls showing public approval of Biden’s handling of the economy is less than 40%.
We wanted to go deeper in our survey and find out specifically why voters are so sour on the Biden economy. Inflation is clearly part of it, but inflation has improved substantially during the last year, while Biden’s approval rating has not. Something else seems to be weighing on voters. Here are three warning signs that emerged in our survey:
Voters expect inflation and the economy to worsen by Election Day. In the poll, 62% of respondents told us they expect inflation to get worse during the next 12 months, while only 11% expect inflation to improve. They’re similarly gloomy on the economic outlook, with 56% saying they expect the economy to weaken during the next 12 months. Twenty-three percent expect a recession. Only 8% think the economy will get stronger during the next year.
Voters seem excessively gloomy. Inflation has come down a lot since it peaked at an annual rate of 9% in 2022. It’s now at just 3.7%, and many economists think the Federal Reserve’s aggressive effort to tame inflation by jacking up interest rates is working. Fed policy typically operates with a lag time of a year or more, which means some of the Fed’s rate hikes still haven’t worked their way into the economy. That suggests inflation should continue to fall, though perhaps slowly, even though voters expect the opposite.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
The economy probably will slow, given that third quarter GDP growth was a blowout 4.9%, which economists don’t expect to continue. But most forecasts are for modest growth in 2024, which would be generally good; slower growth would ease inflation pressures without causing layoffs or a rising unemployment rate. Nonetheless, Americans have had a recession mentality for much of the Biden presidency, and there’s no obvious reason to think the clouds will lift in 2024.
In fact, that’s another worry for Biden that showed up in our poll:
Many Americans don’t know what’s going right. We asked people’s opinions on inflation, job growth, and overall economic performance. On inflation, just about everybody recognizes it’s a problem. But Americans think other aspects of the economy are doing far worse than they actually are.
We asked about job growth, for instance, and 31% think it has been unusually weak, while 48% think it has been about average. Only 20% think it has been unusually strong. The 20% are right. Employers have created 14 million jobs since Biden took office, the most during any presidential administration, ever. Most Americans either don’t know this or don’t believe it’s true.
We also asked how people think the US economy is doing relative to other developed nations. Thirty-eight percent think the United States is doing worse, while 40% think it is doing about the same. Only 21% think the United States is doing better than other developed nations. Again, the minority view is correct. The US economy has outperformed nearly all other developed nations, coming out of the COVID pandemic in better shape and getting inflation down faster.
Some voters blame Biden’s green energy policies for inflation. Poll respondents cite a range of factors as the main cause of inflation, including current government policies, COVID disruptions, and “corporate greed.” So they don’t blame Biden exclusively for inflation. But of the 27% who cite “current government policies,” 35% single out Biden’s green energy plans as the main cause of inflation, more than any other response.
That 35% is a subset of the 27% who say current government policies are the biggest cause of inflation. So it’s only about 9% of respondents, in total. Still, if 9% of voters think Biden’s embrace of solar, wind, and other renewables is the main cause of inflation, that could spell trouble in swing states where just 1% or 2% of voters could tip the election one way or the other.
Biden clearly does embrace green energy, given that last year he signed into law the most sweeping set of green energy incentives in US history. But that’s not what has pushed most energy prices up. Instead, tight global markets for oil and natural gas have driven gasoline and home heating costs higher than they were during the years before COVID, when there was actually an oversupply of fossil fuels. Russia’s invasion of Ukraine in 2022 tightened markets further, and big producers like Saudi Arabia have been cutting back on supplies to keep markets tight and prices elevated. But that’s a complicated set of explanations that may be more than voters want to hear, leaving Biden grasping for a simple answer to voter concerns about high energy costs.
Ipsos polled 1,103 registered voters for Yahoo Finance from Oct. 20 through Oct. 22.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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