“It’s the economy, stupid.” That was James Carville’s immortal phrase to explain Bill Clinton’s surprising victory in 1992, ending Democrats’ 12-year exile from national office. It’s held true in presidential elections ever since. But the “vibecession” that Joe Biden can’t seem to shake off, heading into his likely rematch with Donald Trump, suggests that despite all the positive data he keeps touting as a sign of his success, voters feel as though the economy is floundering.
The economy has improved since the lingering hardships of the pandemic. Biden has managed to lower inflation from 9% in July 2022, while keeping the unemployment rate around a 54-year low. That delicate balancing act seemed to defy expectations, as economists predicted that unemployment would have to rise for inflation to fall. EY’s chief economist Gregory Daco has referred to Biden’s economy as the “holy grail of non-inflationary growth.”
Come November, the strength of the economy will take center stage in the presidential election. In an interview with Fortune, Mark Zandi, chief economist at Moody’s Analytics, explained that his team’s model predicts Biden will win reelection if the economy continues to improve because.
“It’s about the change in the economy, as much as, if not more than, the level of things,” he said.
Zandi has been bullish on the current state of the economy during Biden’s tenure in office. His forecasts have been repeatedly cited by Biden’s White House as proving the strength of their “Bidenomics” policies, although he insists he’s not a partisan figure. House Republicans, meanwhile, call him “Biden’s favorite economic forecaster.”
That recalls another famous campaign slogan, pegged to economics: Ronald Reagan’s clinching question in 1980: “Are you better off than you were four years ago?”
The importance of perceptions
Zandi and his Moody’s team found that voters are starting to believe the economy is improving, according to an analysis released in February. It accords with the sudden uptick in consumer sentiment surveys that prompted another prominent economist, Arindrajit Dube, of the University of Massachusetts Amherst, to post on X: “The vibes are catching up with the hard data on the economy, and the Great Vibecession is looking increasingly … transitory.”
That’s a notable change from 2023 when economists were stumped by the electorate’s pessimism…