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As voters prepare to choose the next president, the U.S. economy is, by most measures, stronger than it has been in recent election cycles, though some exceptions help explain voter discontent.
The Bigger Picture
Politics and voting behavior are more complex than any data series from a government website, and the definition of a “good economy” varies among individuals. However, the key measures economists use to assess well-being look better now than in past election cycles remembered fondly for economic prosperity.
US Economy In Numbers
• Unemployment Rate: The unemployment rate was 4.1% in October, the lowest in the month before a presidential election since 2000. In previous comfortable victories for the incumbent party, joblessness was higher: 7.4% in 1984, 5.4% in 1988, 5.2% in 1996, 5.5% in 2004, and 7.8% in 2012.
• Inflation: Over the 12 months ending in September, the Consumer Price Index (CPI) rose only 2.4%, lower than in past favorable election cycles, including 1984 (4.3%), 1988 (4.2%), 1996 (3%), and 2000 (3.5%). However, cumulative inflation during President Biden’s term is up 19.9%, the highest in the equivalent period before a presidential election since 1984 (20.1%).
Economic Sentiment
Economic “Bread and Peace” model predicts vote share in a presidential race based on growth in inflation-adjusted per-capita disposable personal income. Using the famous measure, the Biden economic record is middle-of-the-pack compared to other modern election cycles. From December 2020 to September 2024, real disposable per capita income is up 5.9%, better than the 1996 (3.7%) and 2012 (3%) elections but worse than 1984 (11.5%), 1988 (9.1%), and 2004 (7.2%).
Between the Lines
The inflationary surge of 2021 and 2022 damaged Americans’ real incomes, affecting household finances and economic sentiment. However, conditions have improved in 2023 and 2024, with the labor market remaining one of the best in modern times. How this translates into voting behavior is a subject for political scientists and campaign strategists to study in the years ahead.
Recent Economic Data and the Election
Top Democrats are optimistic that recent economic reports will help convince voters that the economy is better than perceived. Data shows a balanced economy for the next president, with inflation close to the Fed’s target, growing spending and incomes, and moderating wage pressures on businesses.
US Economy Before Election Day
Despite imperfections, the U.S. economy has shown robust expansion in 2024. The latest GDP report indicates above-trend growth in late summer, defying naysayers and highlighting ongoing economic strength.
This comprehensive overview provides a snapshot of the U.S. economy on the eve of the election, offering valuable insights into the factors influencing voter sentiment and economic conditions.
