Year-end accounts of the U.S. economy are very strong indeed. According to Bloomberg and the Wall Street Journal —which are certainly not giddy media outlets—U.S. economic output has jumped more than 7% in the last three months of 2021. Overall growth for 2021 should be about 6%, and economists predict growth of around 4% in 2022—the highest numbers the U.S. has seen in decades. China’s growth in the same period will be 4%, and the eurozone (which is made up of the member countries of the European Union that use the euro) will grow at 2%.
The U.S. is “outperforming the world by the biggest margin in the 21st century,” wrote Matthew A. Winkler in Bloomberg , “and with good reason: America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years….”
In February, Biden’s first month in office, the jobless rate was 6.2%; today it has dropped to 4.2%. This means the Biden administration has created 4.1 million jobs, more than were created in the 12 years of the Trump and George W. Bush administrations combined. Wages in America are growing at about 4% a year, compared with less than 1% a year in the eurozone, as worker shortages and strikes at places like Deere & Co. (which makes John Deere products) and Kellogg’s are pushing wages up and as states increase minimum wages.
The American Rescue Plan, passed by Democrats in March without a single Republican vote, cut child poverty in half by putting $66 billion into 36 million households. More than 4.6 million Americans who were not previously insured have gotten healthcare coverage through the Affordable Care Act, bringing the total covered to a record 13.6 million. When Biden took office, about 46% of schools were open; currently the rate is 99%. In November, Congress passed a $1.2 trillion infrastructure bill that will repair bridges and roads and get broadband to places that still don’t have it.
Support for consumers has bolstered U.S. companies, which are showing profit margins higher than they have been since 1950, at 15%. Companies have reduced their debt, which has translated to a strong stock market.
The American economy is the strongest it’s been in decades, with the U.S. leading the world in economic growth…so why on earth do 54% of Americans disapprove of Biden’s handling of the economy (according to a CNN/SSRS poll released yesterday)?
That disapproval comes partly from inflation, which in November was at 6.8%, the highest in 39 years, but inflation is high around the world as we adjust to post-pandemic reopening. Gas prices, which created an outcry a few weeks ago, have come down significantly. Patrick De Haan, an oil and refined products analyst at GasBuddy, an app to find cheap gas prices, tweeted today that average gas prices have fallen under $3 a gallon in 12 states and that in 36 U.S. cities, prices have fallen by more than $0.25 a gallon in the past 30 days. Falling prices reflect skyrocketing gasoline inventories.
Respondents also said they were upset by disruptions in the supply chain. But in fact, the much-hyped fear that supply chain crunches would keep packages from being delivered on time for the holidays has proved to be misguided: 99% of packages are arriving on time. This is a significant improvement over 2020, and even over 2019. It reflects that companies have built more warehouse space and expanded delivery hours, that people have shopped early this year, and that buyers are venturing back into stores rather than relying on online shopping.
What it does not reflect is a weakened retail market. Major ports in the U.S. will process almost one-fifth more containers in terms of volume than they did in 2019. Container traffic at European ports has stayed flat or declined. Consumer goods are flying off the shelves at a rate about 45% higher than they did in 2018: it looks like Americans will spend about 11.5% more in this holiday season than they did in 2020. Indeed, according to Tom Fairless in the Wall Street Journal , American consumer demand was the key factor in the global supply chain bottlenecks in the first place.
And yet 63% of the poll’s respondents to the CNN/SSRS poll said that the nation’s economy is in poor shape. And here’s why: 57% of them say that the economic news they’ve heard lately has been mostly bad. Only 19% say they are hearing mostly good news about the economy.
How people think about the country depends on the stories they hear about it.
