It looks like ordinary Americans are finally starting to feel a little better about what economists say is a strong economy.
Consumer sentiment surged in January, according to a widely-cited University of Michigan survey, which registered 78.8 in the first month of 2024 – up 21.4% from a year ago and the highest reading since July 2021. The survey previously showed a big jump in December, as well, and the two-month increase was the largest in over 30 years.
Survey respondents reported a positive outlook on the economy and less concern about inflation. “Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations,” survey director Joanne Hsu said. “Sentiment has now risen nearly 60% above the all-time low measured in June of 2022 and is likely to provide some positive momentum for the economy.”
Consumers expect the inflation rate to be 2.9% this year, down two-tenths of a point from December and the lowest expectation reading since December 2020.
Economist Andrew Hunter of Capital Economics said the survey results are “another sign that the economy is on track for a soft landing,” per CNBC.
Good news for Biden? Although the indicators have been pretty good for some time now, the strength of the economy hasn’t translated to political support for President Joe Biden. Polls show that most voters blame Biden for whatever economic problems they have or may perceive, and voters say they trust Republicans more than Democrats – and former president Donald Trump more than the incumbent – when it comes to managing the economy.
Republicans have played up the negative sentiment that seemed to linger well into the post-pandemic recovery, likely driven by the persistence of inflation. “Bidenomics continues to cripple American families with historic prices,” the Republican National Committee recently said. And Biden’s poll numbers seem to reflect a general negative vibe on the economy.
But that may be changing now. The White House said Friday that Biden’s policies are “delivering results that more Americans are feeling.” And Biden’s top economic adviser Jared Bernstein said the president “is making progress lowering inflation while maintaining a strong job market. We have more work to do, but we’re on the right path.”
Even some conservative activists admit that the economic outlook is improving. “The economy has clearly gotten better over the last year … No doubt about that,” Stephen Moore, an adviser to Trump, told The Washington Post.
Still, some Biden supporters recommended caution. “There is still a debate on the internet about whether consumer sentiment is actually good, and we should listen to families who say they’re struggling,” Elizabeth Pancotti of the Groundwork Collaborative, a liberal think tank, told the Post. “But I think it’s clearly getting better and we’re on a pretty good path for November.”
