Six-Chart Sunday (#34) – The Economy, Stupid

6 Infographics from the week + 1 Video (Tevi Troy on "The Power & the Money")

We’re past the midway point of the Trump vs Harris sprint: 51 days until Election Day, 56 since Biden quit.  A photo finish is brewing.  Two critical questions may decide this race: (1) Who is the Change Candidate?  (2) Who is Better on the Economy?  This week's charts examine question #2, with Democrats potentially under-appreciating consumer despair & Republicans over-estimating economic stagnation.

---

1. It’s Always “The Economy, Stupid.”  The economy once again ranks as voters’ top issue, as it has in all modern U.S. elections. (Pew 2024; 2020; 2016; 2004-12)

2. Economic Pessimism Pervades.  Voters don’t like President Biden’s handling of the economy (-20.7% approval per RCP avg); nearly half of swing state voters say their financial situation has worsened in the past year; 63% of voters say economic conditions are deteriorating (vs 31% improving); and the University of Michigan’s Consumer Sentiment Index is in throw-the-bums-out territory.

BUT WHILE SENTIMENT IS NEGATIVE, UNDERLYING DATA ARE MIXED.

3. Misery Index Is Not So Miserable. “The gauge of economic sentiment (unemployment + inflation rate) has successfully predicted 15 of the last 16 US Presidential elections over more than 60 years, including every US election since 1980. At 6.7% today, the misery index currently stands below the 7.35% historic threshold for the incumbent political party to win re-election.” (MUFG)

4. Pain at the Pump Expected to Ease. “U.S. motorists should see gasoline prices fall below $3 a gallon for the first time in over three years as soon as next month, shortly before they go to vote in November's presidential election, analysts said this week.” (Reuters)

5. Real Household Income Increased for First Time in Four Years. “Household incomes rose last year for the first time since the Covid-19 pandemic began, reflecting the effects of easing inflation and a strong job market. This [+4%-after-inflation] move returned incomes to about where they were in 2019, the peak that was hit just before the pandemic.” (WSJ)

6. So Who Is Winning on the Economy?  Trump dominated Biden on “who would do a better job on the economy” for months, up 20 points in polls on that and a similar question re inflation.  New WSJ polling sees those margins persisting yet shrinking, with Trump leading Harris +8 on the economy and +5 on inflation (8/24-28 poll).  Pew likewise has Trump leading 55-45 on “make good decisions on economic policy” (8/26-9/2), though other recent polls suggest that gap may be shrinking. A lot depends on how pollsters phrase the question. I suspect questions asking about “Trust” will give Harris higher numbers than questions about “Managing” the economy.

(e.g. in the August 1-5 FT / U. Michigan poll, when asked “who do you trust most to handle the economy” said Harris 42%, Trump 41%. When asked if their economic policies would leave you better off” (Trump 42%, Harris 33%)).

VIDEO

Tevi Troy is the rare historian who has both studied the White House & worked there at the highest levels. A prolific & best-selling author of multiple books & hundreds of articles, we discussed his new book looking at Presidents & CEOs.