In every election cycle since the phrase was popularized during the 1992 presidential campaign, politicians and pundits remind voters that elections almost always boil down to a simple concept: “It’s the economy, you idiot.” .
The 2022 mid-term cycle has not departed from this tradition.
But as the fall approaches, the better question might be which economy? Or better yet, the economy from what time of year?
As fall approaches, the past few weeks have presented a series of conflicting numbers that raise questions about the true state of the economy. Two quarters of negative growth certainly sound bad, but the economy added more than 500,000 jobs in July. It looks pretty good.
Inflation, of course, is at levels not seen in decades. But this week’s figures showed consumers believed inflation was slowing.
And consider two of the biggest economic proxy measures for most Americans, the price of fuel and the state of the stock market.
When Americans talk about inflation, they may have many things in mind. It could be the cost of food. Maybe it’s the price of plane tickets. But often, this is what they pay at the pump to fill up their car and this price has fallen sharply in recent months.
The average price of a gallon of regular gasoline (all formulations combined) has fallen by about a dollar over the past month, from just over $5 on June 13 to just over $4 on June 8. august. feel because they actually see it. When people pay, say, $15 less when filling up at the gas station, they’ll probably notice.
If gas prices are something that strikes in the wallet, the state of the stock market is something that strikes people when they think about their retirement accounts. And in recent months, the news has been… better.
Since June 17, the Dow Jones Average has gained almost 3,000 points and is closer to its level at the end of May. To be clear, the Dow is still down for the year, down around 3,700 points, but it’s come out of the cellar. And voters opening their 401(k) returns are probably feeling a little better than they did at the start of the summer.
What does this all mean for November? It’s a good question.
Much of economics is mental. It’s as much about how people “feel” as it is about the real state of the economy. Besides, it’s early August. Some analysts will tell you that people’s perceptions of the economy are already set by this time of an election year. And what’s more, those numbers could go the other way in every other month. If there’s one big lesson to be learned in 2022 so far, it’s probably to be wary of statements. Instability is the rule.
But right now, things are looking better than they were a few months ago by some key metrics. And the true meaning of “it’s the economy, stupid” seems less clear than at the beginning of summer.