Historically, the strength of America’s economy has been among the most reliable predictors of electoral outcomes, particularly in the case of incumbent presidents. Over the past 45 years, only three sitting presidents have seen their bids for reelection falter, and in each case, weak economic indicators foretold their demise.
Amid the “stagflation” crisis of the late 1970s, Jimmy Carter’s loss to Ronald Reagan was cemented by a decline in GDP during the lead-up to the 1980 election. Just over a decade later, George H.W. Bush lost to an upstart Bill Clinton when unemployment rose substantially and the economy slipped into a recession during Bush’s only term as president.
And at the height of the COVID-19 pandemic, Donald Trump lost to Joe Biden after GDP plummeted in the second quarter of 2020. During the same period, no incumbent president has been unseated while governing over a strong economy.
At a glance, it might seem that the historical trend bodes well for President Biden. After all, America’s economy has set a global pace over the past year, with unemployment falling (and holding) below 4%, wage growth exceeding forecasted estimates and GDP expanding at a “blistering” pace. After two quarters of substantial inflation-adjusted GDP growth (4.9% and 3.3% in the third and fourth quarter of 2023, respectively), Axios declared that the United States is “winning the world economic war.”
Yet in spite of the positive economic news, Biden’s approval ratings have remained stubbornly low, with only 42% of registered votes saying that they approve of the president’s performance when it comes to jobs and the economy in our most recent poll.
While these numbers appear — on the surface — to contradict conventional wisdom, in a recent survey of registered voters we found evidence that the lingering effects of inflation have undermined Americans’ confidence in the economy, despite increasingly strong fundamental indicators. As 2024 kicks off, this disconnect between the fundamentals of the economy and the financial challenges facing American voters represents the greatest threat to Biden’s bid for a second term.
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The top issue on voters’ minds
When asked to identify the three issues that will most directly impact how they vote this year, 52% of voters selected “inflation,” while another 50% selected “the economy.” The next closest issue was immigration (35%), while less than a third of respondents selected “gun violence and crime” (29%) or “health care” (24%).
While Democrats, in particular, have sought alternative narratives with which to frame the 2024 campaign, only 22% of respondents identified “abortion” as a significant determinant of how they will vote in 2024, while only 19% said that “the candidate’s personal character and integrity” will be a significant factor in their decision.
When asked whether “pocketbook issues” (such as inflation and the economy) or “social issues” (such as abortion and LGBTQ+ issues) will be more important to them this November, an overwhelming 72% chose “pocketbook issues,” including a majority of Republicans (89%), independents (73%) and Democrats (57%).
The ongoing impacts of inflation
The electoral emphasis on inflation is unsurprising given the ongoing magnitude of its impact on the lives of Americans. In our most recent survey, a significant majority of respondents indicated that inflation has continued to undermine their quality of life during the past year.
For example, nearly two-thirds (65%) indicated that inflation has impacted their ability to pay monthly bills over the past year, while a similar number say that inflation has impacted their travel plans (68%) and forced them to draw down their personal savings (65%).
When it came to discretionary spending, an overwhelming majority of 87% said that inflation has impacted how much money they have left each month after paying essential bills, while a troubling 60% said that they have less money available for a personal emergency today than they did 12 months ago.
Unsurprisingly, these profound impacts have left many voters bristling with discontent. If the stagnation of Biden’s approval ratings didn’t make as much clear, only 22% of American voters said that they were even “somewhat satisfied” with the federal government’s handling of inflation, while a large majority (74%) expressed dissatisfaction. Among them, 47% indicated that they are “very dissatisfied” with the federal government’s handling of inflation.
Taken as a whole, the responses suggest that until the effects of inflation are tamed, peripheral issues will have little bearing on the outcome of this year’s pivotal elections. While social issues may play a role in turning out the “party base” on either side, inflation will decide our next president, and right now for Joe Biden, that’s bad news. The president has nine months to bring the fundamentals of a strengthening economy in line with the financial realities of everyday Americans. In the final analysis, how well he does so will likely be the only thing that matters.
Stephen Neely is an associate professor in the University of South Florida’s School of Public Affairs and a faculty senior fellow with the Global and National Security Institute at USF. Stephen Neely is an associate professor in the University of South Florida’s School of Public Affairs and a faculty senior fellow with the Global and National Security Institute at USF. Savannah Havird (MPA candidate, ‘24) is a graduate assistant and research assistant at the USF School of Public Affairs.