Americans are still worried about their financial stability even as their recession fears lessen. High prices at the grocery store and consumers’ memories of their pre-pandemic budgets may be playing a role. Here’s what financial and economic experts have to say about what this week’s economic indicators tell us about people’s perception of the economy.
What is driving consumer confidence?
The Consumer Confidence Index, released by the business nonprofit and research organization the Conference Board, is a survey indicating how optimistic or pessimistic consumers feel about their financial well-being and the economy.
The Consumer Confidence Index fell slightly in March from 104.8 to 104.7, well below some economist expectations of 106.5. Although consumers’ perception of the likelihood of a recession fell this month, consumers were less confident about their family’s financial situation in the next six months. The percentage of consumers who expected their incomes to fall rose from 11.9% in February to 13.8% in March.
Elizabeth Pancotti, director of special initiatives for the Roosevelt Institute, said that consumers’ experience of the economy and their financial situation may come down to crises they’re feeling that may not show up at a macro level but may strike their budgets particularly hard.
“When egg prices finally come down and chicken prices finally come down, but orange juice is high because of some random citrus greening disease or some other shocking food item, your total grocery bill doesn’t come down and that really highlights it,” she said. “There’s one crisis after another at a micro level, which I think is really why we’re not seeing that divergence between overall economic strength and at a very micro level, the feelings of average consumers.”
Pancotti acknowledged that housing is also one of the highest expenses for consumers right now, and those prices aren’t showing as much movement as other areas of consumers’ budgets.
“For most families, it is the largest purchase they make every month,” she said.
Why isn’t consumer sentiment higher?
Consumer sentiment, a smaller survey conducted by the University of Michigan, also gauges people’s sense of the economy overall, the labor market, and how they see inflation. On Thursday, U.S. consumer sentiment jumped to 79.4 from 76.9 in February and 62 a year earlier, making this its highest level since July 2021.
Joanne Hsu, director of the survey, said in the report that this number is an indication that consumers believe the economy is “holding steady.”
“As the election season progresses and debates over economic policy become more salient for consumers, their outlook for the economy could become more volatile in the months ahead,” she added.”
Kevin Kliesen, business economist and research officer at the Federal Reserve Bank of St. Louis, said consumer confidence and consumer sentiment are still far below pre-pandemic levels and that it’s a puzzle as to why when the economy has “been growing fairly strongly” in the past year and a half. But like Pancotti, he added that high prices at the store compared to pre-pandemic prices may be playing a role in those measures.
“If you’re like me, you look at something, and you go, ‘Oh my gosh. I remember when it was so much less before the pandemic.’ So I think that calls into question, probably, a lot of people’s perceptions of the overall state of the economy and importantly their consumer finances,” he said.
What can we expect from inflation and the Fed?
As the Federal Reserve looks to its favorite inflation measure, the personal consumption expenditures price index, economists are watching the PCE closely for signs the Fed will cut rates in the coming months. This policy change is expected to have effects on the housing market as well as the growth of businesses.
The PCE rose 0.3% from January to February and 2.5% over the past year, according to the Bureau of Economic Analysis’s Friday release. Fed Chairman Jerome Powell responded to the news when he spoke at the San Francisco Fed and said the numbers were “in line with expectations” but not as reassuring as the numbers Fed officials saw last year.
Despite this reception from Powell, some financial experts believe inflation will ease up soon. Cristian Tiu, associate professor of finance at the University at Buffalo, said that although the economy is adding jobs, he doesn’t believe the quality of those jobs is high enough to sustain this price growth for much longer.
“Prices basically on consumer goods can’t be driven up forever just by the very top of the wage distribution. The rest of the wage distribution actually looks pretty modest. So I don’t think these price increases can actually be sustained,” Tu said.
For this reason, he doesn’t think the Fed should continue to put brakes on the economy through restrictive monetary policy. Tu added that he sees inflation as driven partly by corporate profit-seeking, with companies taking advantage of inflation to continue to keep prices higher than they can justify for the American consumer.
–Casey Quinlan, Florida Phoenix
Gary Kunnas says
As long as Obama’s puppet Biden is in office it will not get better. Press secretary lies about everything. All of them Are total phoineys
Deborah Coffey says
Some people forget just how bad George W. Bush’s Great Republican Recession was in 2008-2009. It was so bad that it took Obama almost 2 terms to get the economy back to “normal.” Some of us woke up in September, 2008, seeing a loss of a half a million dollars. We don’t forget. Trump took office at the height of the longest economic expansion in American history. Then, there was Trump’s recession in February, 2020, the deepest in history, even though the shortest… “From March 2020 to June 2020, there were 20.4 million jobs lost at closing and contracting private-sector establishments” according to the Bureau of Labor Statistics. So, some people seem not to know FACTS. I’ll take Obama and his puppet any day.
Laurel says
Deborah: Yeah. Hubby and I remember, it was either late 2007 or early 2008, when we walked into Sears, and there wasn’t a soul there! No one shopping; no one to wait on us. It was like the Twilight Zone. There were no trucks on I-95 moving goods. Eerie as hell! Then Obama got in, and it took a little while, but sure as heck, the trucks started getting back on the road. We used to watch the trucks and joke about “that bad Obama!”
A friend of ours, who was about 20 years older than us (he’s gone now) told us that if you live long enough, you’ll see that the recessions happen during Republican admins, and end during Democratic admins. If you have enough money, recessions are a great time to buy real estate. Hmmmm….
Endless Dark Money says
Democrats are always better for the economy than republicans by almost any measure; job creation, job growth, unemployment, national debt. Look it up. Its the republican strategy to sabotage any bill or program that would help people and then complain they are a do-nothing president. Uneducated followers will believe apparently about anything. Not a big Biden fan but will vote for him any day over the orange embarrassment.
Lee says
These people crying about the economy & high prices don’t ever live on a budget and have spent over their means!
History constantly repeats itself and essentially people don’t save or invest anymore to account for the economic ups & downs!!
It’s a shame how the new politics this generation preaches to kill Education and don’t believe in History, Economics or the Science’s!
What goes up must come down & always be prepared financially or even in a great economy your living from week to week or month to month..
jake says
“These people crying about the economy & high prices don’t ever live on a budget and have spent over their means!”
In simple terms, you’re clueless. Inflation, is up 20% since Biden became President.
“What goes up must come down & always be prepared financially or even in a great economy your living from week to week or month to month.”
78% of Americans live paycheck to paycheck and you have absolutely no empathy for those people. I would agree people make poor choices, but you are denigrating the majority of the people you know.
Being clueless doesn’t excuse you, it’s just a fact.
Anonymous says
I work hard and have for years. I would need a second job to support myself in this economy if I was living on my own. I do not live outside of my means and have always been mindful of a budget. The cost of everything has increased exponentially while pay has not. Many employers are laying people off or cutting hours. This isn’t as simple as living on a budget, which people do need to be more mindful of. Taxes have increased with little to nothing to show for it. Cost of products have increased while quality has decreased and sizes have decreased, but sure, let’s blame everyone struggling with finances for being so poor right now and ignore why things are the way they are.
Deborah Coffey says
https://washingtonmonthly.com/2024/02/12/based-on-incomes-americans-are-a-lot-better-off-under-biden-than-they-were-with-trump/
jake says
Just because someone says it, doesn’t make it true.
Deborah Coffey says
FACTS matter. TRUTH matters. DATA matters. You don’t have much of any. Inflation is NOT up 20% for starters.
Laurel says
Jake: Exactly. Trump is a perfect example of saying many, many things that are not true.
dave says
NO. Getting better for whom, the politicians looking to get elected, not !. They can slant confidence opinions by regions and cities in the US. All I know and a lot share the same opinion, there is a High cost of living to include, food, rent, interest rates, insurance of all kinds, utilities, medical you name it prices are not supporting the middle class and poor and especially the senior citizens.
Melly C says
In your dreams! If you’re a Have Not, which is a huge chunk of America, the economy is teetering on the brink. We are, many of us-STILL- are one illness away from losing everything.
Stop trying to prop up the current occupants of Washington. It’s foolishness
Joe D says
The problem with consumer confidence in the current economy can be matched to fans dissatisfaction with the performance of a sports team: “What have you DONE for me LATELY?”
Despite the DOCUMENTED improvement in salaries, significant student loan forgiveness for students defrauded by “diploma mill” colleges, and other programs for public servants (police, teachers, nurses, First Responders, etc.), the drop in the Consumer Price Index down to 3.4% (closely approaching the desired 2% inflation level), Biden is blamed for all AMERICA’S problems. There have been new regulations passed reducing the cost of Insulin, allowing Medicare to NEGOTIATE the cost of certain high price medicines, the direction to the IRS to verify tax returns for those households making OVER $400,000/ year, and has taken back tax evaders funds worth millions back to the US treasury.
Unfortunately the grocery prices are up a RIDICULOUS 18%…NOT related to supply issues OR transportation issues…MORE likely food producers trying to maximize their PROFIT margins.
Also unfortunately, GAS prices, after dropping significantly, are back up in the past 3 months due to Disruptions in the RED SEA transport lanes AND OPEC+ (which includes Russia) who are cutting oil (gas) production levels, I jack up the price to the world.
Biden has ABSOLUTELY NO CONTROL over those occurrences, but the AMERICAN CONSUMER is looking at SOMEONE to BLAME (“What have you done for me Lately”).
Food and gas prices are destroying the average family’s budget. Increasing rents are squeezing families nationwide. Increasing property taxes, increasing property insurance rates, increasing costs of property repairs are BIG FACTORS in the rapidly raising rent levels ( not that SOME large unscrupulous landlords aren’t price gouging).
For SOME reason, people have the MISTAKEN belief that our Multimillionaire former president who gave 80% of his tax cuts to the upper 5-10% (or less) of incomes, and million dollar corporations, will SUDDENLY change his tactics, and start supporting or protecting the “average” worker in the bottom 60% of American incomes.
BUT, the Orange faced PITCHMAN spouts UNBELIEVABLE and RIDICULOUS lies and theories….and large groups of people ignore all the FACTS….and are swallowing his every word, “hook, line, and sinker.”… how UNFORTUNATE and SAD..,
hippy says
Joe please tell me again why after paying off all my college loans, and my children paying off theirs, after we got degrees that allowed us to pay ours off, we are now paying off the loans of others who chose to get a degree that is worthless? Please explain,,,,
Robjr says
The economy is getting better true.
The consumer does not feel benefits because the owners of wealth hoard those benefits.
endangered species says
that’s right today there are 3 Americans that are individually worth more than all the rest of us combined and manage to pay little to no taxes. In fact they can spend a dollar every second for the next 32,000 years.
in the midst of a housing and affordability crisis, corporations let us know that they are the ones truly suffering and people need to work harder.
JimboXYZ says
Just Flagler County, unemployment is low, but creeping up into the 4% level. Gasoline surges, pricing at $ 3.60-3.70/gallon (87 octane). Remember what I said, Bidenomics & government was going to be this inflation as a new 2+ years (3+ of Biden-Harris) of data for a new normal to declare that as the new standard. Saying the economy is getting better is just inaccurate for election year. Spin this as better is just an outright lie of prosperity. These are the same people that brought you Covid & other Bidenisms for Delaware Lies. They passed 3 measures to fund, all 3 of them are the wars we’re in Ukraine, Gaza, Border Crisis. The 4th war is inflation. And gasoline jumped in price that coincided with the war chest funding. Distribution is one of the variables that drives inflation. Gasoline increased on the 1st quarter to what it is now. Since a gallon of gasoline to get those products to the grocery store shelves costs more, the price of those products has o increase. Distribution generally is a no value added to the product, it’s a cost & the only thing that can happen or be avoided is safe transport of a product, that is it can arrive undamaged for resale & profit.
The border crisis funding, that’s not about keeping illegals out, it’s more about processing more illegals at a faster pace to legitimize border crossing that has been the Biden invasion of illegal voters. Watch the vote counts in November 2024, +/-156 million votes was the record for 2020, we’ll get to see what the population of portrayed legal voters has swelled to under Biden’s border policy. Those demographics will reflect the distribution of votes in the Biden-Harris reelection effort. Oh, they funded the Government for he remainder of 2024, there shouldn’t be a looming Government shutdown threat for the election year too. Inflation is creeping up again, the same bill the masses of consumers has faced for 3+ years of Biden-Harris. The economic experts for liars spinning this as prosperity.
Laurel says
“Biden-Harris,” “Biden-Harris,” “Biden-Harris.”
Apparently, Jimbo, you weren’t at Publix on Saturday. Hubby went there and couldn’t find a parking space; the place was jammed to the rafters and not because the food is cheap. People are more than willing to buy and the corporations are more than willing to gouge. Go to Home Depot or Lowe’s on any given sunny day, and see the long lines checking out (your hero gave these corporations tax cuts to boot). Been out to eat lately? Wonder why there is so much building going on? Wonder why housing is high? Not until the demand changes, will prices drop.
All this is not “Biden-Harris,” but corporate driven profits. The simple fact is that when people stop buying, the prices stop going up. Supply and demand, and the demand is still high. The economy is high, whether you like it or not.
FlaPharmTech says
Biden-Harris all the way! Happy ppl can afford Publix. I’m a pharmacy tech employed by Publix, but I shop Aldi, as my pay doesn’t support Publix pricing. People, it’s big business, big Corporate America that always wins $$$$$, regardless Democratic, Republican government. The middle class America is treading water; no fault of Biden.
JimboXYZ says
Flagler county population wise has grown, same infrastructure trying to service that growth for basic necessity of food & shelter, that’s not prosperity, it’s just gridlock and inadequate parking. Read some of the other comments ? Wages aren’t pacing the inflation. Look at California.
https://www.youtube.com/watch?v=HS-U_CExp8k
This is where this is going.
JimboXYZ says
Is this an April Fool’s Day joke ?
Jackson says
I am proud that I pay taxes. I think I’m patriotic to support our schools, health care, police, military, etc. Donald Trump famously said in his first presidential debate of 2016 that not paying federal taxes made him “smart.” His signature legislation was the tax cut. – the biggest increase in national debt other than Reagan and not including presidents who were responding to crisis.
jake says
Bullshit, Biden gives money away to everyone in order to buy votes. Loan forgiveness, which the Supreme Court ruled he can’t do, open borders, and anything else his handlers tell him too. He is pathetic, disconnected, and totally clueless to the average American citizen.
Deborah Coffey says
Untrue. Biden is not pathetic, disconnect and totally clueless to the average American citizen. It would be wise to stick to your own opinion. There are more of us than there are of you! And, Biden didn’t disobey the Supreme Court. Turning off FOX “news” might be a good idea.
Pogo says
@Robr, Jackson
Well said. Conspicuously absent, as always, is any comment from the secure and comfortable: well insulated from the plight of most, proud and never stinting in self-regard and verbose formality; paired with chastisement of the uncouth and unwashed. Pilate washes his hands and reflects on his misfortune — silently.
Dennis C Rathsam says
Peoples wages cant catch up to inflation. Sure you might have gotten a raise, but the inflation rate keeps climing! Grocery,s are up 24%…. Im tired of the president telling me how good things are, how can he continue to lie to the American people? Gas is now $369 a gal…..& CLIMING… Here we go again!
Sherry says
AGAIN. . . not to confuse the FOX cult with facts:
1. Our economy is based on “Capitalism”. . . the current motivation of “Capitalism” is maximizing profits at all costs! We are experiencing the down side of Capitalism due to GREED of the wealthy!
2. NO President directly controls what you pay for groceries or gas, or ANY consumer goods.
3. What a federal government CAN control is “Federal Income Tax”. . . by any measure, billionaires DO NOT pay their fair share of those taxes.
4. During the trump administration, a huge tax break was given to those “Billionaires”. . . who were already NOT paying their fair share of federal income taxes.
5. The Republicans in Congress are currently doing all they can to cut the funds to the IRS in order to keep the IRS from auditing the “Billionaires” who are NOT paying their full taxes.
6. If the “Billionaires” were forced to pay their full taxes, our national debt would be greatly reduced.
7. The stock markets are currently at an all time high. . . which is raising your 401K or other retirement plans and investments.
8. The US currently has the strongest economy in the world. America’s gross domestic product in 2022 was more than 40% greater than that of China, the world No. 2. Even more striking, U.S. GDP was over five times that of the next two largest economies, Japan and Germany.
9. You are NOT feeling personally financially healthy due to the massive NET income GAP between the wealthy and the poor. . . due to “Capitalistic” GREED! NOT due to President Biden!
Laurel says
Sherry: These very same people complaining here will go out again and vote against their own best interest. Trump gave the very wealthy tax cuts. What did he do for the middle class other than tell them he did mythical wonders and that the whole world is after him in a mythical witch hunt (except for authoritarian leaders like Putin)?
Sherry says
Right On Laurel! Mindlessly supporting a grifter and con man whose character includes being found legally guilty of “FRAUD” (lying) and SEXUAL ABUSE has terrible consequences for us all. CHARACTER MATTERS!
dave says
GDP for 2023
1. 🇺🇸 U.S. $26,855B
2 🇨🇳 China $19,374B
Ray W. says
Thank you, dave.
GDP measures the sum of a nation’s productivity. GDP per capita measures the sum of the average person’s productivity regardless of age or employment status. Infants, octogenarians and the disabled? All are factored into the equation.
According to 2022 data obtained from a World Bank site:
China’s GDP per capita? $12,720.
India? $2411.
Israel? $54,931.
Mexico? $11,497.
New Zealand? $48,419.
Nigeria? $2,163.
Norway? $108,729.
Russian Federation? $15,787.
South Africa? $6767.
West Bank and Gaza? $3,789.
Ray W. says
United States? $76,330.
Ed P says
#3. Estimated 756 billionaires in U.S.
Average federal tax rate paid 23%
Add any state income taxes, and of course sales tax and your statement that they don’t pay their fair share is false.
Ps Fair is a playground term used by kids. Life is not always “fair”
Ed P says
Sherry,
After re-reading your post, there are so many inaccurate assumptions that I would explore you to dig a bit deeper and seek the real facts.
Additionally why should anyone want to financially punish the super successful people? If you were to readjust your thinking a bit then someone who is homeless should demand you have too much and don’t pay your “fair” share and should be taxed more.
You are advocating redistribution of wealth.
I personally respect the Uber wealthy because I realize their charitable contributions are really based on fear. Fear that us little people will come in the dark of night for their possessions if they don’t pretend to care and support certain causes.
Pierre Tristam says
There is nothing factually incorrect in Sherry’s comment. (The national debt being “greatly” reduced by taxing billionaires is a bit of an exaggeration. But she was careful not to repeat Biden’s incorrect claim that billionaires only pay 8 percent. They certainly don’t pay their fair share, however, and even if they pay 23 percent, as most do not, that’s pathetic.) If the commenter above thinks there is, he should point it out and provide documentation to the contrary. Since Ronald Reagan this country has endured and suffered from the most massive redistribution of wealth upward. Correctives under Clinton and Obama were too meager to reverse what is now the most unequal America since, and in many cases beyond, the 1920s. The commenter refers to “redistribution of wealth” as if it were some kind of evil. In this case, he’s right, but not as he intended.
Ed P says
Hello Pierre,
Another issue that we will disagree about. Let’s start here.
When the Trump era tax reform sunsets in 2025, every American needs to reassess their financials because they will pay 1-4% more in personal taxes unless provisions are extended, revised, or made permanent before then.
So it did help middle Americans too.
The top 1% of taxpayers- those earning $561,361 or MORE—paid a whopping 42.3% of the total tax revenue collected in 2020. In fact, the top 1% of taxpayers paid more total income tax than the bottom 90%! Fair share? Not according to you.
Please don’t forget the bonuses, pay raises, stock valuations that occurred when the corporate tax rate was reduced simply making the United States competitive with the rest of the world. Remember the billions that were stuck overseas in conglomerates foreign subsidiaries. Many of those dollars returned home and spurred corporate U.S. investments.Corporate greed as some refer, help drive the 401ks that are being heralded. If the stock market is a barometer of the economy, some credit is due to tax reform.
Lastly, income inequality is not the same as wealth inequality. But I do agree with your statement that the last 50 years or so has seen a massive upward shift in wealth.
However, there is nothing sinister occurring. Global factors, such as technological progress, globalization, and commodity price cycles play an important role. Maybe a historical timing issue, having money at the right time.
In summation, when us boomers all are taking our dirt nap, $72-$75 trillion will pass to millennials thereby correcting what you perceive as an inequity. Problem solved.
Sherry says
For the indoctrinated. . . FACT: No matter what the actual income tax rate is for Billionaires. . . they pay accountants to find loopholes to avoid paying their “FULL” taxes. . . take a good read: https://www.propublica.org/article/billionaires-tax-avoidance-techniques-irs-files
Sherry says
According to Forbes, the 25 riches people in the US saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%
Propublica’s Tax data on wealthy Americans. . . take a good read for the truth about what they pay in taxes:
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
Ed P says
Sherry,
You do not pay income tax on your wealth growth.
You pay capital gains set by the IRS on investments and income tax on income earned.
If your house doubled in value( worth growth)you did not pay taxes on it.
Sherry says
ELON MUSK Paid “ZERO” in federal income taxes in 2018
JEFF BEZOS Paid “ZERO” n federal income taxes in 2007 and 2011
THEN THERE ARE THE OFF SHORE TAX HAVENS:
$4 Trillion In US Wealth Is Stashed Overseas, Much Of It In Tax Havens
A handful of extremely wealthy US taxpayers holds trillions of dollars in foreign accounts, much of it in tax havens and through partnerships, according to a new study based on data reported to the IRS by foreign financial institutions.
Since 2015, the Foreign Account Tax Compliance Act (FATCA) has required foreign banks, investment funds, and other financial intermediaries to report information about accounts controlled by US taxpayers. Using confidential administrative data reported under FATCA, the researchers estimated about 1.5 million US taxpayers held roughly $4 trillion in foreign accounts in 2018, about five percent of the roughly $80 trillion in total reported US financial wealth.
Who owns foreign accounts?
The study found two very different groups of overseas account holders. The vast majority are immigrants to the US or Americans working abroad. They generally hold relatively small accounts that rarely are in tax havens.
But most of the money is controlled by just a handful of very wealthy taxpayers, often through partnerships with accounts in tax havens such as Switzerland, Luxembourg, and the Cayman Islands. Only about 14 percent of foreign accounts were held in those low- and no-tax countries in 2018. But they represented about half those overseas assets, or nearly $2 trillion.
Wealthy US investors can avoid US tax by setting up corporations or trusts in tax havens, where local tax rates are low and US tax on investment income generally is not withheld.
Ownership of offshore assets was highly concentrated among a small number of very wealthy households. About one-in-five of those in the highest-income 1 percent held assets overseas, increasing to more than 60 percent for households in the top 0.01 percent. And that very small group controlled roughly one-third of the assets in overseas accounts.
Ray W. says
From the headline of the article, the issue is why certain people are unable to see the positive aspects of the current long-term recovery from the damage wrought on the American economy from a once-in-a-century pandemic.
Gary Kunnas, the first commenter in the long thread of postings, presents as one of those people who cannot see how strong the economy really is.
Worker productivity, the main driver of prosperity in the American national economy, is up. Wages are rising faster than inflation. The stock market is up. GDP, a widely accepted economic barometer, is up. Consumer spending is up. Housing starts have plateaued, but they remain higher than at any time during the previous administration. Energy production is at record levels. American energy companies are exporting more LNG than ever. Crude oil exports are up, too. Crude oil imports are down. Manufacturing jobs have been added. Inflation year-over-year, which is the preferred measure used by the Fed, is down, though there was a monthly uptick last month.
Jerome Powell, Chairman of the Fed, stated last week: “We need to see more progress on inflation before cutting rates. … The decision to reduce rates is a very, very important one. … The economy is strong right now, and the labor market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be.”
Please note that Chairman Powell did not say we needed to see progress on inflation; he said we needed to see MORE progress. That means progress has already occurred and he is looking to see more of it.
Why would anyone say we are going to have to wait for a new administration to see a strong economy? It is here right now. It has been here for some time. It looks like it will be here for a while longer. No, I haven’t forgotten that I have lived through nine recessions in my lifetime. Another recession will come, just as they always have come. We have been through 12 of them since WWII.
Is it fair to comment that Gary Kunnas, as my mother would say, is just talking to hear his head roar?
Ray W. says
I am not certain I fully agree with the third comment in the thread, but Laurel does not seem too far off the mark. The problem is that an economy driven by the economic decisions of hundreds of millions of people, consisting of trillions of dollars in GDP, is dependent on so many variables that no one person can really fully comprehend the vast dimension of all of the different inputs. To me, there is no level of numeracy out there that enables any one person to fully comprehend a $25 trillion economy; it is too vast an endeavor. Not even Harry Seldon could do it.
On the other hand, over the past 48 years, during Democratic presidential administrations, the dollar strengthened by 4.2% per year on average on the international currency market. It weakened by 3.1% per year during Republican presidential administrations.
Since 1945, according to CFRA Research, the stock market grew on average 11.2% during Democratic presidential administrations. It grew by 6.9% during Republican terms.
Since 1981, we have had seven presidents (four Republicans and three Democrats). Since our current president has only completed 39 months in office, I looked at how the DJI performed during those seven 39-month terms:
Clinton: 68.3%
Obama: 65.2%
H.W. Bush: 43.4%
Biden: 32.0%
Reagan: 23.6%
Trump: 22.6%
W. Bush: -6.1%
Again, there are too many variables to directly link better long-term economic performances during Democratic administrations, and the pandemic depressed the DJI during Trump’s term in office, but there is a very strong inference that Democrats have not destroyed the American economy, unlike the many baseless claims posted by certain FlaglerLive. commenters.
Ray W. says
I can’t really disagree with the comment by Anonymous. I wish he had looked up “exponential” before he or she used it. Exponential refers to multiples of a base number, as opposed to an arithmetic progression. Our inflation rate did rise, but it did so arithmetically, not exponentially. That doesn’t make Anonymous wrong, it just makes the comment less right than it could be.
I agree with Anonymous that employers are laying off people. I just read about layoffs by four Ohio manufacturers in the past few weeks. The businesses laid off about 1000 workers. But businesses commonly lay off workers, they have always been laying off people. One definition of capitalism is “creative destruction.” The average number of people who apply for unemployment insurance benefits (those who have been either fired or laid off) each week has been 365,100 since 1967. That’s a sizeable number of layoffs each week for just over 56 straight years. Don’t be fooled by small layoff numbers.
If the average number of applicants for unemployment insurance benefits each week is 365,100 (it is), then would 200,000 applicants for benefits in a week be a good number? I assert that it would be.
On March 7, 2020, 199,900 people applied for unemployment insurance benefits. By one measure, then, the economy was strong under the previous administration. The pandemic then hit. During the week of April 4, 2020, 6,961,275 people applied for benefits. That was the worst week for applicants since 1967. On January 30, 2021, the first full week of the Biden administration, 834,000 people applied for benefits. Businesses were still failing in significant numbers. Lots of people were still being fired or laid off. To me, that was a bad week, too. Not as bad as the previous April, but still bad.
April 24, 2021: 589k applied for benefits. That was still bad, but far less bad than it was on January 30th.
July 3, 2021: 396k applied for benefits. Still more than average, so I would call it a slightly bad number.
October 23, 2021: 288,250 applied for benefits. The numbers were looking good. Certainly, it was better than average.
September 17, 2022: 196,500 applied for benefits. No one can say that is a bad number. Actually, it is a really good number.
April 2, 2024: 214,425 applied for benefits. Again, a really good number.
Since the headline of the article describes people who are unable to accept that a strong economy is actually a strong economy, does almost two straight years of below-average applications for unemployment insurance benefits support the argument that in a strong economy, relatively few people apply for unemployment benefits insurance?
Ray W. says
Let’s get jake’s commentary style out of the way.
While I openly concede that I trend toward the Foghorn Leghorn cartoon character in my comments, jake has to admit that he has the commenting style of the chicken hawk character. Always punching above his weight class. Never winning a fight. He is indomitable. He is relentless. He is certainly single-minded. Clueless most of the time. Nonetheless, he brings spice to FlaglerLive commentary. I could see him in his youth propositioning every girl he sees whenever he goes to the beach in hopes of getting lucky in the fearless style of the chicken hawk.
Ray W. says
Melly C is conflating a national economy with individual economic circumstances. The issue is a national economy and whether it is strong. It is strong in its own right and strong in comparison to other national economies around the world. If one confuses the state of the national economy with the state of some individuals, then the conclusion will always be flawed. Garbage in, garbage out, as it were.
Mellie C. is right, however, in writing that many individuals are teetering on the edge. All my adult life, people have been teetering on the edge. When the ACA bill was signed into law by President Obama, some 45 million Americans lacked health coverage, out of a nation of 300 or so million people. Now, the number is in the 20 million range, out of a population of 330 or so million people. Just how many people were teetering on the edge in 2010 as our national economy was staggering out of the Great Recession? Individuals teetering on the edge cannot be the standard, because there have always been millions on people teetering on the edge at any time during my entire lifetime. One of my earliest memories is of my mother, an elementary schoolteacher, crying in my father’s arms as they stood in the kitchen. She was apologizing for once again spending all the money she had in her purse to buy hot lunches for her students. She said she could see the hunger in their eyes. In our uncaring society of the early 60’s, there was a time in my lifetime that society allowed some of my fellow children to starve to death. For all its flaws, Johnson’s Great Society was the antidote to many of those who were and are teetering on the edge of starvation.
Ray W. says
I can’t really disagree with Joe D’s commentary, except that he perhaps could have devoted some extra effort to the issue of rising food prices.
When then-President Trump placed tariffs on certain Chinese goods, the saber rattling began. Soybean farmers, sensing trouble, plants other crops. In July 2018, China imposed a tariff on soybeans. U.S. soybean exports to China dropped that year from just over 30 million metric tons to 8 million metric tons. Overall U.S. soybean yields dropped from 4.43 billion bushels to 3.55 billion bushels. Production rose in 2019 back to 4.22 billion bushels and again to 4.46 billion bushels. Two years of drought across the Midwest and upper Midwest pushed yields back down to 4.24 billion bushels in 2022 and 4.16 billion bushels in 2023.
Wheat crop yields also dropped from a good 2020/2021 crop of 1.82 million bushels to 1.65 million bushels in both 2021/2022 and 2022/2023. Increased rains late in 2023 raised the crop yield to 1.81 million bushels for 2023/2024.
The war in the Ukraine also impacted worldwide supplies of wheat and soybeans, though less so for soybeans, as Brazil has ramped up its soybean acreage. China has to buy from someone, after all.
The increased grain prices greatly impacted U.S. cattle herd sizes. According to a 2.6.24 AgriLife Today article, after two years of drought, with concurring reduced grazing opportunities and hay harvests, the U.S. cattle herd is the smallest it has been since 1951. Ranchers, anticipating increasing grain prices, which would narrow already thin profit margins, sold off portions of their herds before maturity in 2022. They did this again in 2023, when drought again loomed. With increased rainfall in late 2023, ranchers are rebuilding their herd sizes. Who knows when beef prices will return to a more normal amount, but no one can blame any administration for rising beef, wheat or soybean prices.
Drought impacted national beef prices. War and drought impacted international wheat prices. Drought impacted international soybean prices. Drought lowered the flow of the Mississippi River in 2022 enough to require emergency dredging near Memphis to reopen the river to barge traffic, which is the primary transport method for grain to get to New Orleans for export. The vastly reduced river flow continued in 2023. Upriver saltwater intrusion affected potable water for human use in cities and towns south of New Orleans. The government had to truck in fresh water to resolve the local crisis. Salt water, being heavier than fresh water, actually flowed upstream underneath the river flow. The intake pipes for water treatment were near the bottom of the river. These are transport issues. These are production issues.
Sherry says
Thank you so much, Ray W., for adding detailed factual context to a complex discussion. Hopefully others will appreciate your efforts and learn from your analysis as well.
Ray W. says
I watched the video posted by JimboXYZ that accompanies one of his above comments about paying low-wage workers more being where we are going. I think I have an answer to the great conundrum caused by JimboXYZ’s repeatedly inaccurate comments. He either didn’t watch the video all the way through or he didn’t understand what the expert witness was telling the interviewer. The witness stated that, over the past 10 years, the fast-food industry has raised prices on average by 46%. Other businesses in the food industry raised prices on average by 28%. I used an inflation calculator. From February 2014 to February 2024, inflation has increased 32%, with roughly 18% occurring during our recent bout with increased inflation (if 2% inflation is the desired inflation rate, we are always supposed to have a measure of inflation to have a healthy economy. Using the rule of 72, 32% inflation over 10 years is really not that far out of line).
According to the witness, many fast-food companies have used their excess profits to engage in stock buybacks, which benefit investors, not workers. She stated that the excess profits are enough to pay workers an increased minimum wage without affecting a more normal for the food industry profit. Yes, JimboXYZ, this just might be where we are all going. Price gouging for profit, not necessity, and investors and owners keeping the profit, without competition. Workers will do without.
JimboXYZ repeats his claim that the current administration is raising gas prices. Wrong as always, JimboXYZ just can’t grasp the fact that American energy producers are extracting more crude oil and natural gas than ever. The current administration is not inhibiting the American energy sector. OPEC+ maintaining previous voluntary production cuts, EU and American sanctions on Russian oil and gas exports are affecting worldwide supplies and keeping prices high. According to a published Russian state bank report, Russian exports of natural gas have dropped below 1978 levels. Russia lacks the infrastructure to export compressed natural gas to countries other than EU countries, because they didn’t build pipelines to export compressed natural gas to Asian countries and they haven’t built liquefaction facilities to export LNG via tanker to Asian countries. Basically, Russian compressed natural gas exports to the EU have dropped from 120 billion cubic feet per day to 20 bcfd. By 2026, it is predicted that exports to EU countries will fall to 15 bcfd. EU nations are satisfying most of their natural gas needs by buying LNG from newly built American liquefaction facilities. Re, gasoline, the switchover to summer blends, the temporary closing of refineries for scheduled maintenance, each contributes to rising gas prices, as it has for decades. In other words, gas prices always rise in the spring. Again, scheduled maintenance occurs during times of lowered domestic gasoline demand, which is during the spring and fall. But, when refinery output goes offline for maintenance, prices rise. Overall Russian declines in crude oil production and OPEC+ voluntary reductions have cut worldwide output by over 4 million barrels per day. American energy producers have increased domestic crude oil production by about 2 million barrels per day, to an all-time record of 13.2 million barrels per day. America alone cannot make up the difference in a short period of time.
JimboXYZ warns that undocumented immigrants will swell the vote count this fall, as if the vigilant staff of Flagler’s Division of Elections will fall asleep at the wheel, just like as if all others around the country will do. Fat chance. The reason the vote total swelled in 2020 was that people realized just how divisive our previous president was. Voters came out in droves to drive him out of office. They just might do it again.
Does every FlaglerLive reader realize that after WWII, every nation that joined the U.N. had to pass certain asylum laws for immigrants? When an immigrant crosses the border and reports to authorities in order to seek asylum status, they become documented immigrants. They are never illegal until a hearing officer denies their claim. If their claim is denied, they will be deported. Of course, by law, and by a very old law, they are entitled to a hearing. With the surge of immigrants seeking lawful status reporting at the border, we need more hearing officers, more court staffers, more agents and guards, more holding facilities. The list goes on and on. During the pandemic, the number of foreign-born residents dropped, as people left the country. Bad economies drive immigrants away. Since we currently have the world’s strongest economy, we are attracting lots of immigrants who want to work. There is no war at the border. In years past, immigrants tried to sneak in. Now, a significant majority of immigrants walk in and immediately report to authorities. Since only Congress can fund more federal hearing officers, more staffers, more agents and guards, and more holding facilities, direct your ire to Congress.
In sum, the American economy was strong relative to the rest of the world for the last seven years of the Obama terms. It was relatively strong for the first three years of the Trump administration. It has been relatively strong for the last 2 1/2 years of the Biden administration. Yes, there are problems. But the purpose of the article is to explain the dichotomy between economic reality and the economic perceptions of the gullible among us.
Ray W. says
I give credit where credit is due. While I don’t always agree with Ed P and, while it is not important to me whether I agree with him, he really has stepped up his game. Better study before commenting. Less hyperbole in many of his comments. Actual evidence of internal constraint. Who knew?
If Ed P could ever fully get hold on his anger, and I think he is really trying, he could really add to the FlaglerLive discussion.
Thank you.
Ray W. says
As the focus of the article is how people can wander through life fooling themselves when the facts are right in front of them, I saved the most gullible commenter for last. Dennis C. Rathsam’s comments, on rare occasions, brings to mind one of my favorite Churchill quotes.
“He has all the virtues I dislike and none of the vices I admire.”
Instead of trying to understand how Dennis C. Rathsam can be so consistently wrong, perhaps a better approach is to focus on the three broad forms of persuasion recognized in academia.
Logos (the root word for logic). A logos argument appeals to logic or reason. Logic is designed to lead a person to one conclusion to the exclusion of every other conclusion. Reason is designed to lead one to the best or least bad conclusion from two or more possible conclusions. Yes, a good argument must give way to a better argument. A logos argument utilizes clear and logical connections between ideas, often using facts or statistics. Or it can utilize historical or literal analogies. Logical gaps in the connections, often due to wrongful assumptions, are known as logical fallacies. For example, Dennis C. Rathsam, in this comment thread, claims that inflation is rising. And he is both right and wrong in his claim. On a one-month basis, the non-core CPI, which includes the more volatile food and fuel categories, reflects a monthly rise in inflation. But the Fed explicitly excludes non-core CPI monthly inflation figures from its calculations; it uses annualized core CPI figures. Annualized figures give a far more statistically accurate depiction of the current state of inflation. Anyone who uses monthly non-core CPI inflation in an argument is basically using garbage. Garbage in, garbage out, or reliance on a logical fallacy. The Fed is aware of the monthly numbers, but it is looking for the most reliable numbers, not the least reliable numbers, when projecting national lending policy. Intellectual rigor mandates the use of annualized core CPI figures.
Ethos. An ethos argument rests on a presenter’s credibility or authority. The presenter must be qualified to comment on the subject-matter at issue, either through personal experiences, credible sources, appropriate grammar, or by fairly presenting the issue, including counterarguments. When Dennis C. Rathsam claims that we are at war on our southern border, is he losing the ethos argument, because of inappropriate grammar? Ethos consideration require that I refrain from commenting about who should serve on a school board or local commission. I just don’t know enough to comment. However, if a local no-longer-conservative elected official takes to the radio to ask when people can start beheading Democrats, or when none of the other no-longer conservative elected officials rebuke the detestable official for his incitement to murder, I say get rid of them all. Instigation to homicide is a bar to public office, I say.
Pathos. A pathos argument appeals to emotion through deliberate word or phrase choices, or the use of meaningful language, in hopes of provoking an emotional response, such as empathy, anger, sympathy, fear, humor, frustration, hope, horror or even hatred. I argue that most FlaglerLive readers know of fearmongering, usually in the context of the border, at least these days. No, we are not at war at our southern border. No, Democrats have never destroyed our economy or our nation. Yes, I assert that we are still in the early phases of an age of political violence the likes of which have not been seen in the West since a 25-year period that preceded the outbreak of WWI. Yes, had certain insurrectionists caught Nancy Pelosi on January 6th, we would likely have seen a political murder, perhaps via beheading. Had Mike Pence been caught, hanging was likely in his future. I am not using the wrong words. I am not engaging in hyperbole. Political passions have been inflamed in this age of violence. Gullibility runs rampant.
Every commenter, one would hope, would rely on one or more of these three forms of persuasion when typing out a comment. Yet commenter after commenter starts his or her argument with a losing issue. It is difficult to win an argument when one starts from a losing position.
Ray W. says
I came across a link to an article about Fox Business host Maria Bartiromo. During a roundtable discussion on her show, the jobs report came in. A commenter stated that 303,000 new jobs created was a clear sign of a strong job market. Ms. Bartiromo, at first, argued that if a jobs report was too strong, it might delay the Fed in cutting lending rates. After some time to think, she switched to the argument that investors and business owners might have been making decisions based expectations of Trump being elected in November. The anticipation of that event, according to Ms. Bartiromo, apparently was enough to add 303,000 new jobs in March, eight months before the election. No matter what the truth is, when Fox Business round table participants are stating that 303k new jobs is proof of a strong economy, and Ms. Bartiromo is bending over backwards to place the strength of the economy on the coming election of Trump, does that undercut the manifold claims by various FlaglerLive commenters that the economy is weak?
Our own Senator, Rick Scott, issued a press release in which he claimed the new jobs were all part-time jobs. He included a link to an article, so I followed the link. The site didn’t contain the numbers he claimed it did. I googled the numbers he claimed in his release. A BLS page came up that had his numbers. Yes, according to that site, some 569k part-time jobs had been added in March from February. But that BLS site had nothing to do with the BLS jobs report. I did a little more reading and found a definition of part-time work further down to site. According to the BLS definition, if a major weather event occurs during the week including the 12th of the month, lost work hours can kick a worker out of full-time work and into part-time work, but only for that month. The BLS doesn’t look to the whole month for part-time or full-time status; it looks to the week including the 12th. I went to the AccuWeather site and googled whether a severe weather event had occurred during the week in March that included the 12th. Sure enough, that week brought the “biggest outbreak of severe weather” for the year, so far. 600 “filtered” reports of severe weather, 26 tornadoes, and about 50 incidents of severe hail. Did an outbreak of severe weather ranging from Colorado all the way to the East Coast cause enough people to lose work hours that specific work week sufficient to put them in the part-time work category for the month? If that happened, did Rick Scott know about it when he released the possible error-plagued statement. Remember, not a single politician swears an oath to tell the truth when they swear to uphold the Constitution.
Pogo says
@Ray W.
Thank you for these comments. IMO, they are on a level and of a quality that far exceeds what others, myself included, devise and contribute.
Be well.