The last time this happened, voters didn’t credit Bill Clinton. That may be a bad omen, or a good one.
If the stock market chose presidents, Joe Biden would be a shoo-in for reelection in 2024. The market rallied this month amid growing optimism about the economy, with the S&P 500 zooming 1.9 percent Tuesday on news that the consumer price index rose only 3.2 percent in October (compared to 3.7 percent in September). Stocks rallied again Wednesday on news that the producer price index fell 0.5 percent. Commentators are no longer debating whether the economy will experience a “soft landing” (i.e., a reduction in inflation without recession). The only question now is when it will arrive. The S&P 500 seems to have decided it’s already here.
But the stock market doesn’t choose presidents. Voters do, and polls continue to show they think the economy is in terrible shape. A Financial Times–Michigan Ross Nationwide Survey conducted November 2–7 is absolutely brutal on this point.
Comparing my grocery bills to a couple years ago, 50-100% inflation over that period is absolutely true. From what I’ve seen in the housing and vehicle markets, the same holds true. The bulk of the inflation happened in 2022, which is why they changed the inflation calculation from comparing two years back to comparing just one year back. Inflation is apparently slowing down, but it’s still higher than target and wages have quite a bit of catching up to do to reach the total amount of inflation since covid.