——

The Public May Soon See the Economic Light

Perceptions tend to lag behind reality. But inflation has been going down for a while

Now that the Iowa caucuses are over, the feeling that this is a presidential election year is more palpable. It’s a commonplace that economic conditions swing elections. Yet despite economic performance that can only be called spectacularly good, Americans seem down in the mouth about the economy and how President Biden is handling it.

About three months ago on these pages I asked why, and my answer concentrated on the public’s apparent yearning for lower prices, not only lower inflation. Today, without retracting anything I wrote then, I want to emphasize two other reasons: general grumpiness in the electorate and lags in perception about the economy.

Let’s review current economic conditions. The unemployment rate has been hovering near its pre-pandemic low, which was the lowest in about 50 years, for about two years. Inflation, which soared in 2022, has receded into the 2% to 3% range, depending on your choice of index and time period—putting it within shouting distance of the Federal Reserve’s 2% target. Net new job creation continues at a rapid pace for a labor market that is around full employment. And the Fed may be on the verge of achieving the elusive “soft landing” that many experts thought improbable a year ago. Income inequality is even shrinking, as low wages rise faster than high wages.

[…]

A fascinating new paper by Stanford’s Ryan Cummings and Neale Mahoney provides statistical evidence for what economists have long believed, and offers estimates of it. The authors estimate that the negative effect of inflation on the University of Michigan’s Consumer Sentiment Index has historically taken about two years to wither away. In one statistical model, if the effect of inflation on the sentiment index subtracts 10 points this year, it will subtract about 7 points next year, and less than 1 point the year after that.

If that pattern holds in 2022-24 and inflation remains low, sentiment will improve notably this year. It looks as if that’s starting to happen—right on schedule. The Consumer Sentiment Index has soared in the past two months, after being in the doldrums since 2021.

It’s a glimmer of hope. May it continue.

https://www.wsj.com/articles/the-public-may-soon-see-the-economic-light-on-biden-policies-2024-election-9c4ca203?mod=opinion_lead_pos5

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47323688)

https://autoadmit.com/thread.php?thread_id=5433092&mc=170&forum_id=2

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47324950)

You make compelling points and are definitely one of those super smart MAGA types I so often hear about ;-)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47328565)

CR

After a rough few years, the economy had turned around and was "objectively doing great" under George H.W. Bush during his last year in office. Economists generally agree about that.

That's what ultimately saved him in '92, IIRC. Voters eventually came around, they usually do.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47323702)

https://www.bls.gov/opub/mlr/1993/02/art1full.pdf

I also remember something about a promise to not raise taxes.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47323782)

You mean the additional factors of how Bush Sr. was viewed as insufficiently ideologically pure by the most hardline faction of his own party, and how a substantial plurality of his own constituents had become markedly dissatisfied with him as a result of various things he had said and various actions he had taken while in office… both of which almost certainly led to diminished voter turnout by his base?

Yeah fair point — that is one important way in which was in a totally different position than Joe Biden finds himself heading into 2024.

*blank stare*

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47323894)

No I mean that Bush said “I won’t do X” and then did X and the media made that his entire POtUSy during his re-elect and it was simple enough that the dumbs who don’t really pay attention could manage to retain it.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47324903)

Oh OK, so again, all totally different from Biden 2024 for reasons. Got it, thank!

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325468)

Sorry you got blown the fuck out here, Beez. Hey, it happens.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327889)

However she refuses to discuss how her celebrated CYBER NINJAS did in their little “audit.” She has a very short attention span sometimes, very autistically extended attention spans at others. Super interesting from a purely psychological perspective.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47328561)

We just had years of 6-9% inflation (that they'll admit to). Everyone has experienced firsthand that groceries are now 30-50% more expensive than a few years ago. Used cars are still unbelievably expensive. Housing affordability is at the worst level ever recorded. None of this is unwinding fast enough.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47323893)

Uh, Obeezy is doing “great,” champ. The voters will come around, trust me.

What are you… dumb and poor?

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47323895)

it just doesn't work that way

for that matter it doesn't really matter what things look like in January 2024 either. just ask George Bush I

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47324909)

lol

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325027)

there was a 6-8 month period where every time my boomer libwife came home from the grocery she'd say "can you believe X was Y dollars a pound!" Every single time. Then at some point she just came to accept that X is Y dollars a pound now, it's no longer something to remark on.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47324937)

For those who don't own a home yet, congrats inflation is back down to 3% but that home you want is still only up 100% compared to 3 years ago. hehe

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47324923)

go buy a non name brand shirt or pants. or buy some milk or chicken from the store. its not up 50% hth

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325132)

it's just such a blatant GOPe neocon rag and they're not even trying to pretend otherwise these days.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325715)

One of the lulzy things that has resulted from this is that the WSJ now often opines on hard hitting issues like fashion. It has basically become the NYT/Wapo of the "sensible moderate right" (aka GOPe).

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325823)

What’s your life like? Do you make much money? I have to assume you live a shitty unsuccessful life given how fucking stupid you are. Am I right?

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47328494)

Gas is over $3. Heating oil is $4. Natural gas is up 30%. Electricity is up about the same. You can’t eat at McDonald’s for less than $15. Interest rates for house and cars are still high. I just spent $500 at the grocery store, and I did not buy that much or much of anything fancy.

Can the deep state hold off a commercial real estate collapse until after the election. Probably. Are the numbers some version of fraud lies. Yes. For a lot of reasons.

Does any of these fraud lies numbers matter short of an ITE level collapse? No.

Talk to people who work for a living. Contractors are complaining about a lack of work. Union guys are spending a lot of time not on a job. Service industry people are being squeezed even. Everyone complains about grocery prices. Everyone, even people making so much it should not matter because they know what it means for everyone else. This is all relatively new and is not going away before November nor will people forget before November.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325765)

odd case

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325876)

By the way, the one thing inflation generally should mean is "increased consumer spending" (if everything costs more and you maintain your lifestyle you will spend more). The only reason that wouldn't happen is if consumers can't afford it and therefore have to cut expenses. This happens when inflation doesn't get reflected in incomes or there are major job losses.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47325880)

https://www.nerdwallet.com/article/finance/price-of-food

The persisting inflation story is essentially just a housing story where boomers are sitting on SFHs because the rates are up. We will see a bizarre housing market begin later this year because rates will drop but prices won’t rise because more and more boomers (and older) will finally sell and so the supply will be rising quickly from historic lows, but the massive amount of pent up demand will not let prices fall too quickly. Rents will eventually correct but not before late 2025 or 2026.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327043)

Homes, cars, travel, and eating out are up. Other things are eh.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327048)

No, they don't. You seem to misunderstand what "inflation easing" actually means. That means prices continue to go up, but less slowly. Inflation of 12% followed by 3% doesn't mean prices go back down to what it would be if it were 3% all along. It means you needed $1.12 to buy what was $1, then it'll cost about $1.15 to buy what was $1. To go back to $1 or even $1.03 you would need deflation and no one is suggesting that this is happening.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327068)

https://www.nerdwallet.com/article/finance/price-of-food

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327095)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327105)

This has many of the same data points on food categories:

https://amp.cnn.com/cnn/2023/10/12/business/cpi-grocery-prices/index.html

This one spoke to my larger point better:

https://www.businessinsider.com/food-prices-cheapest-option-groceries-restaurants-fast-food-2023-12?amp

I know you get my point, which is that prices will fall as people adjust their behavior and that’s already happening. If it isn’t happening, then that’s consumers telling the seller that their products were underpriced.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327196)

I have no idea who wins 2024 but I’d rather be in the Dem’s position than the GOP’s.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327184)

The question is whether his base of poors dumbs and olds can carry the day. It’s possible! Those things are legion.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47327235)

Go Joe!

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47326976)

https://autoadmit.com/thread.php?thread_id=5433092&mc=170&forum_id=2

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47336106)

So try as libs might to pretend an economy with a booming stock market, full employment, wage growth, moderate inflation, and solid GDP growth is “good,” AMERICANS aren’t falling for it!

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47326965)

https://autoadmit.com/thread.php?thread_id=5433092&mc=170&forum_id=2

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47333148)

You seem very smart and rational ;-)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346084)

great positive indicator right there. people eventually forgetting how things used to be less shitty after years of eating shit.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346168)

We need Trump and his double digital unemployment and market crashes back ASAP!

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346286)

Btw how did Biden manufacture global inflation?

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346476)

What's the point of poasting this 100% confirmed by science debunked spam? You sway no one here. Your handlers money would be better spent elsewhere.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47347171)

pointless infrastructure spending

billions to ukraine and prolonging that pointless war

forcememing bullshit "clean" energy to the point no oil co with any business sense would invest in american energy and we stop becoming energy independent as a result

allowing black rock and the chinese to buy up all our real estate to further drive up prices and make home ownership unattainable for anyone who didn't buy before 2021.

whatever the fuck they did to the chicken processing supply chain that caused literally every single place that sells chicken wings to start charging $15 minimum for an order of wings

I could keep going. not going to bother getting in with cars and forcememing "EVs" but jfc with that shit

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47348942)

https://autoadmit.com/thread.php?thread_id=5433092&mc=170&forum_id=2

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47333146)

Amazing work by Biden wouldn’t you agree?

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47345969)

ask RSF, even in shithole socialist Europe stuff is now cheaper than here

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47345989)

Right? ;-)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346080)

it's almost as if democrats a hellbent on making life as shitty for americans as the rest of the world has had to deal with

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346099)

You seem super smart and educated so I’m confident you’ll have smart answers here ;-)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346117)

It’s okay. I couldn’t be smart if dumb people like you didn’t exist. So thanks!

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47346481)

also it's effects, not "affects"

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47348951)

Whoa, it's almost like this guy is a smug self-impressed retard who foolishly thinks he's a genius! ;)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47350414)

;-) oh sweet summer child, your naïveté is adorable

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47357764)

You discussed “spending” above. Do you understand yet? I can explain further if you require added instruction.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47357759)

the biggest issue is that the fraudvirus and consequences made americans, even the stupid ones, see that the emperor had no clothes. they saw ppp fraud and ridiculous money printing and gamestop and shiba inu until the numbers no longer seemed real. they saw incompetence and crime and breakdown of social norms everywhere. people previously were boiling frogs about it, and still held on to this idea of american exceptionalism and invincibility in their heads, even if they didn't admit it. but nobody can really fool themselves about it anymore. that's the cause for the pessimism, the faith has been lost. all the arguments about made up numbers are irrelevant.

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47347111)

CR, the REAL story here is that the economy is doing great, Americans are in a great spot, and they'll wake up one day soon and realize it and reward Joe Biden for his economic miracles. Just wait two weeks!

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47348395)

That's why we're going to have to reinforce and fortify this upcoming election, the problem isn't us, you stupid goys, it's how dumb all of you are. ;)

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47350409)

You sad your little CYBER NINJAS found nothing, bitch boi? Ohhhhh the little baby bitch boi is saddddddd

(http://www.autoadmit.com/thread.php?thread_id=5480394&forum_id=2)#47357751)