The economy is strong but voters aren't feeling it. That's a problem for Biden
President Biden's first year in the White House has ushered in record job gains, unprecedented wage gains for low-income workers and GDP growth not seen in decades.#democracy
But polls show Americans remain deeply cynical about how the president is handling the economy — and that's a problem for Biden and Democratic lawmakers heading into November's midterm elections.
The president and his advisers routinely tout statistics that show how the economy is surging by most traditional economic metrics, seemingly mystified about why the American public isn't giving Democrats more credit for this boom.
Last week, as the president delivered remarks on the January jobs report, he highlighted that in his first year in office, the economy created 6.6 million jobs.
"If you can't remember another year when so many people went to work in this country, there's a reason: It never happened," Biden said, telling reporters to look at economic statistics dating back 40 years to President Ronald Reagan. "History has been made here," he said.
But there's piece of economic data reaching levels not seen in 40 years: inflation. And that's an issue that Biden and his White House have struggled to address.
On Thursday, new data showed consumer prices are up 7.5% from where they were a year ago. Inflation is at its highest point since 1982 as the cost for food, electricity and shelter soar.
Biden didn't focus on inflation during his Virginia trip — despite the new data
Shortly after the inflation data was released, Biden traveled to the Virginia district of Democratic Rep. Abigail Spanberger. She was first elected in 2018 in a former Republican stronghold by a narrow margin, and Republicans are working hard to flip the district in November.
Democrats like Spanberger in vulnerable districts have urged the White House to spend less time on its proposal for massive spending on the social safety net and more time on inflation and other economic issues.
While Biden briefly acknowledged that food and gas prices are up, he kept his focus on his plan, known as Build Back Better — arguing that it would lower costs for things like prescription drugs and childcare.
"You want to lower the cost of living for people — lower them in these areas," Biden said about his plan.
The plan has passed the House of Representatives, but seems all but dead in the Senate, where Democratic Senator Joe Manchin has said he opposes new government spending, given inflation.
Inflation is surging, and that's hitting voters where it hurts
Despite the many positive economic data points seen this year, economists and analysts say that people experience inflation on a visceral level — and that gives it outsized influence.
"Inflation is something people feel in a different way than they do other economic indicators," said Jack Lew, who was Treasury secretary during the Obama administration. "The price of gas is reflected every time you get a tank of gas."
Larry Summers, director of the National Economic Council under President Barack Obama, has been sounding the alarm on inflation for months.
"More unemployment is the difference between a job and not a job for 2 or 3% of the population. More inflation is higher prices for 100% of the population," Summers said.
Inflation makes people unhappy in ways that are disproportionate to the actual concerns that economists have about inflation, he said.
"People tend to think that ... higher prices are something that's being stolen from them," Summers said.
In other words, people feel ripped off by inflation.