President Joe Biden insiders are reportedly increasingly fearful of one major issue that could sink his re-election against former President Donald Trump: The economy.
Or, at least, what voters think of the economy.
“Inside Biden’s orbit, the fear is that there’s little new the administration can do to change the perceptions of a stubborn electorate that’s living through an economic upswing — yet simply refusing to believe it,” reads a new report from POLITICO.
On Friday, America’s employers added a strong 272,000 jobs in May, accelerating from April and a sign that companies are still confident enough in the economy to keep hiring despite persistently high interest rates.
Last month’s sizable job gain suggests that the economy is still growing steadily, propelled by consumer spending on travel, entertainment and other services. U.S. airports, for example, reported near-record traffic over the Memorial Day weekend. A healthy job market typically drives consumer spending, the economy’s principal fuel. Though some recent signs had raised concerns about economic weakness, the May jobs report should help assuage those fears.
But there’s massive trouble ahead for Biden if voters think differently about the state of the economy.
“If half of the people think that unemployment is at a 50-year high when it’s actually close to a 50-year low, this is a problem of misinformation, it’s a problem of perception,” Ben Harris, a former senior Treasury Department official who helped craft Biden’s economic agenda, told POLITICO. “I think, unfortunately, it’ll have a major impact on the election.”
More from the report:
Biden has already spent months touting the nation’s record jobs boom and steady wage gains. He’s celebrated fresh stock market highs and promoted policies aimed at bolstering pay and reining in expenses for working-class Americans.
Yet the price increases driven by soaring inflation earlier in Biden’s administration are still pinching voters. And the recent progress on getting prices down has come in fits and starts.
Trump has focused his criticism of Biden’s economic policies on the inflation surge, which polls show still weighs heavily in voters’ assessment of the economy. At a rally in Phoenix on Thursday, he blamed illegal immigration for causing higher prices, an assertion most economists reject.
Economists say the mixed signals from Friday’s report — a surge in jobs alongside a slight rise in unemployment — suggest that the job market is normalizing after years of distortions related to the pandemic. After the brutal pandemic recession, when unemployment rocketed to nearly 15%, hiring soared in 2022 and 2023 as the economy recovered. Wages, before adjusting for inflation, also jumped as businesses desperately sought workers.
The Associated Press contributed to this report.
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Matt Arco may be reached at marco@njadvancemedia.com. Follow him on Twitter at @MatthewArco.
