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AFTER MONTHS OF DISMAL POLLS, there may be an attitude shift on the economy. The highly regarded University of Michigan poll of consumer sentiment has surged, and fears of inflation have plunged. Needless to say, White House officials are ecstatic.
DEMOCRATS CAN’T GLOAT, THAT COULD BACKFIRE: The White House mantra is that there’s more work to do. And there’s no certainty that higher confidence will automatically lead to higher spending. But two key factors — plunging gasoline prices and the stock market at a record high — are highly visible signs that should fuel strong real disposable income.
THE MICHIGAN INDEX HAD a reading of 78.8 for January, its highest level since July 2021 and up 21.4% from a year ago. On a two month basis, it was the biggest jump since 1991.
SENTIMENT HAS NOW RISEN BY nearly 60% above the all-time low measured in June of 2022 “and is likely to provide some positive momentum for the economy,” said Joanne Hsu, the Michigan survey director.
THE OUTLOOK FOR THE INFLATION RATE rate a year from now declined to 2.9%, down from 3.1% in December for the lowest reading since December 2020. The survey’s index of current conditions also leaped higher, rising to 83.3, or 21.6% higher than a year ago.
TIMING IS EVERYTHING: Most polltakers believe that public attitudes on the economy don’t change much after Labor Day, so that means the White House still has a half year to get the numbers higher. We have thought for weeks that the economy won’t be a big negative for Biden. Even if it’s a neutral, that’s a major improvement for Biden’s prospects.
THE THEME IN RECENT DAYS HAS BEEN who has the better — or worst — cognitive skills, but that’s a losing issue for both candidates: “My cognitive decline isn’t as bad as my opponent’s cognitive decline” is not exactly a compelling argument.
BUT A BETTER ECONOMY, with data to support that improvement, is a big deal. This looks like a “goldilocks” economy, and if Americans finally begin to believe that, Joe Biden has a decent chance of winning re-election.
Related: GOP Lawmakers Are Falling Into Line on Trump Agenda
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