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Imaginary recession  Richard Hitto's blog

Imaginary recession Richard Hitto's blog

A puzzling result Public opinion poll Harris produced for the British newspaper Watchman : At least 56% of Americans believe their country is in a recession. However, the unemployment rate in this same country is only 4%, and the GDP has been growing uninterrupted since the declines in the first two quarters of 2022. Furthermore, wages rose by 4.5% in 2023, a higher-than-expected growth. Inflation rate.

According to this poll, Americans are particularly concerned about the cost of living and inflation. We can't really blame them. But we must also acknowledge that many of them are ill-informed: 49% believe the S&P 500 stock index fell this year, while it rose by about 24% in 2023 and by more than 12% this year; 49% believe that unemployment has reached its highest level in 50 years, while the unemployment rate is less than 4%, its lowest level in about 50 years.

Obviously, Republicans are the most numerous who say everything is bad and blame Joe Biden. But independents and Democrats can't escape what the columnist wrote The New York Times He calls Paul Krugman and other economists “vibration”This is a phenomenon that could contribute to Biden's defeat in November.

“For now,” Krugman writes in his book chronic “Let's just say that while negative perceptions of the economy are a big problem for President Biden, they are a special kind of problem. The truth is that the economy is not bad – in fact, it is doing surprisingly well. In addition, most (but not all) Americans feel Of course) satisfied with their personal finances. [selon des études plus approfondies que le sondage du Guardian]. However, the feeling that the economy is doing poorly is widespread, and it is this feeling – not economic reality, or even personal experience – that is hurting Mr. Biden’s campaign. »

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It's worth noting that Democratic strategists like David Axelrod believe Biden should empathize with Americans who think the economy is bad rather than trying to convince them otherwise. Which is why Krugman admits he feels like he's banging his head against the wall while writing his column for the day. Is it him or the voters who have lost their minds?

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