WEBVTT - Here's Why Inflation is Down But US Voters Don't Care

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. I'm Stephen Carol and

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<v Speaker 1>this is Here's Why, where we take one news story

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<v Speaker 1>and explain it in just a few minutes with our

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<v Speaker 1>experts here at Bloomberg. Over forty years ago, Ronald Reagan

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<v Speaker 1>asked voters a question that's shaped the political conversation for decades.

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<v Speaker 1>Since Are you better off than you were four years ago?

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<v Speaker 2>Is it easier for you to go and buy things

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<v Speaker 2>in the stores than it was four years ago? Is

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<v Speaker 2>there more or less unemployment in the country than there

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<v Speaker 2>was four years ago?

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<v Speaker 1>Fast forward to twenty twenty four, and it's still as

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<v Speaker 1>President Clinton stratus James Carvill once said, the economy stupid

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<v Speaker 1>and judging by how it's doing, Joe Biden should be

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<v Speaker 1>a shoeing in November's election.

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<v Speaker 2>This economy has been incredibly resilient, stronger than I expected.

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<v Speaker 1>Consumer spending on services rose over four percent. That's like

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<v Speaker 1>the highest in two decades. The US economy is chugging

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<v Speaker 1>along pretty well. Yes, US exceptionalism still stands. There's a

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<v Speaker 1>thousand things that can go wrong tomorrow. For right now,

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<v Speaker 1>everything's in pretty good shape. The US has dodged recession,

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<v Speaker 1>but is there a Vibe session. Here's why inflation is

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<v Speaker 1>coming down, but voters don't seem to care. We've got

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<v Speaker 1>our senior editor, Wendy Benjaminson with us from Washington to

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<v Speaker 1>help explain. High Wendy, how well can we say the

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<v Speaker 1>US economy is doing well?

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<v Speaker 2>By all the measures we use here at Bloomberg and

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<v Speaker 2>that the government uses, the economy is doing very well.

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<v Speaker 2>Unemployment is at historic lows, Inflation the rate of inflation

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<v Speaker 2>is coming down. The Dow Jones Industrial average hit forty

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<v Speaker 2>thousand last week, which is a record. So in all

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<v Speaker 2>these areas that we understand to measure the economy, the

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<v Speaker 2>economy is doing well.

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<v Speaker 1>So the data is all telling us one story. But

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<v Speaker 1>what does our latest polling tell us about how people

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<v Speaker 1>are feeling about the economy.

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<v Speaker 2>Well, I think your term Vibe session was just perfect

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<v Speaker 2>because all our Bloomberg News Morning Consult monthly pull of

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<v Speaker 2>voters in the swing states, the states in the US

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<v Speaker 2>that matter to the election where we don't know where

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<v Speaker 2>the outcome is, shows that voters are deeply, deeply pessimistic

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<v Speaker 2>about the economy and its future. And to Ronald Reagan's

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<v Speaker 2>remark that you've cited at the top. We even ask

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<v Speaker 2>do you feel better than you did four years ago?

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<v Speaker 2>And the answer is a solid resounding no. We asked

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<v Speaker 2>by the end of the year, do you see the

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<v Speaker 2>inflation rate getting better or worse? Fifty five percent that

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<v Speaker 2>it would get worse. Do you feel the overall US

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<v Speaker 2>economy is going to get better or worse? Fifty one

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<v Speaker 2>percent said it would get worse. And then when we

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<v Speaker 2>ask them how do you best describe your relationship with

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<v Speaker 2>the US economy, the choice I am not doing well

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<v Speaker 2>financially and the US economy is not doing well was

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<v Speaker 2>cited by forty percent of our swing state voters. So

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<v Speaker 2>they're feeling lousy and they're going to take it out

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<v Speaker 2>on Joe Biden.

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<v Speaker 1>It's a very it's complicated sort of situation. Why do

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<v Speaker 1>we think people aren't celebrating what we are seeing in

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<v Speaker 1>the data, which is things like, you know, the rate

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<v Speaker 1>of inflation coming.

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<v Speaker 2>Down well because consumers aren't feeling it yet. So if

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<v Speaker 2>you're going to a grocery store in Michigan and butter

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<v Speaker 2>is still six dollars a pound, which is what you

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<v Speaker 2>were paying in twenty twenty one, as opposed to the

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<v Speaker 2>three dollars a pound you were paying in twenty twenty

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<v Speaker 2>or twenty nineteen when Trump was president. You look around

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<v Speaker 2>and think, I don't know what they're talking about at Bloomberg,

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<v Speaker 2>and the prices haven't come down at all. And President

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<v Speaker 2>Joe Biden has complained that retailers and manufacturers are not

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<v Speaker 2>lowering their prices now that they're of Inflation is coming down.

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<v Speaker 2>But like I said, voters just aren't feeling it.

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<v Speaker 1>Are they blaming Joe Biden or blaming the retailers or

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<v Speaker 1>where are they pointing the finger when it comes to

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<v Speaker 1>them not feeling the effects of things improving.

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<v Speaker 2>Well, I'm glad you asked that because another question we

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<v Speaker 2>asked is who do you blame for the state of

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<v Speaker 2>the US economy? And I think all of us here

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<v Speaker 2>know and people who study it know that the President

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<v Speaker 2>of the United States actually doesn't have that much power

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<v Speaker 2>over it. There are so many external factors, and yet

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<v Speaker 2>the majority blame the president and they believe they were

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<v Speaker 2>better off under Donald Trump. And the truth is, the

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<v Speaker 2>economy was doing fine under Donald Trump until a global

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<v Speaker 2>pandemic hit, which Joe Biden inherited and has been trying,

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<v Speaker 2>with varying levels of success, to get us out of that.

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<v Speaker 1>Is there any way to change voters' minds before polling day? Well,

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<v Speaker 1>big question.

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<v Speaker 2>It is a huge question. The feelings about these two

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<v Speaker 2>Cares candidates are so baked in that I think it

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<v Speaker 2>would have to take a dramatic change in inflation. Those

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<v Speaker 2>who are want to work, are working. The middle class

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<v Speaker 2>and lower economic classes will tell you that, yes, I'm working,

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<v Speaker 2>and I have to have two jobs to pay my

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<v Speaker 2>rent to buy a house. This is also affecting young voters.

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<v Speaker 2>I should have brought up borrowing rates earlier. Interest rates

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<v Speaker 2>are so high that people are graduating from college and

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<v Speaker 2>they don't look forward to buying a house, and rents

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<v Speaker 2>are tremendously high. And so I don't know how Joe

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<v Speaker 2>Biden turns it around except to say it's going to

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<v Speaker 2>get better. But that's a lot of trust in a politician,

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<v Speaker 2>which Americans just don't have these days.

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<v Speaker 1>Yeah, it certainly is. Is this just an American thing?

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<v Speaker 1>Do we see this phenomenon other parts of the world

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<v Speaker 1>as well?

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<v Speaker 2>We are saying it across Europe and certainly in Latin America. Yes,

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<v Speaker 2>Argentine President Malay recently was pounding his fist on a

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<v Speaker 2>podium and saying no, I plata, there is no we

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<v Speaker 2>own money, you know, stop printing money. We don't have it.

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<v Speaker 2>So it is happening all over the world, and that

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<v Speaker 2>is why I think you're seeing more and more conservative

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<v Speaker 2>and right wing governments being elected.

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<v Speaker 1>Thanks very much, Wendy. That's Bloomberg's senior editor in Washington,

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<v Speaker 1>Wendy Benjamins. In there and for more explanations like this

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<v Speaker 1>from our team of twenty seven hundred journalists and analysts

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<v Speaker 1>around the world, search for Quick Take on the Bloomberg

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<v Speaker 1>website or the Bloomberg Business app. I'm Stephen Carroll, and

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<v Speaker 1>this is here's why. I'll be back next week with more.

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<v Speaker 1>Thanks for listening.