Biden Says Economy Is 'Strong,' But 50% Of Voters Say Their Financial Situation Is Getting Worse As Markets And Employment Hit Record Highs

Nearly every metric for measuring economic prosperity backs President Joe Biden's proclamation in his State of the Union address in early March that "the state of our union is strong and getting stronger." 

As the S&P 500 and the Nasdaq Stock Market raced toward all-time highs, Biden posted on X in mid-February, "The stock market going strong is a sign of confidence in America's economy." 

A strong market means that people’s 401(k)s are growing in value every day, and there's extra money to be made in the market. However, that also requires people to have extra money to put into the stock market or save for retirement. When their stock price is up, companies are more inclined to take risks and spend money because they can leverage their increased stock price to get more cash as needed. 

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But that's not the only marker. Unemployment statistics have reportedly hit all-time lows. The unemployment rate was 3.61% in 2022 — a record at that time, according to CNN. It dropped even lower in 2023 to 3.6%. 

Inflation also continues to drop. Lower inflation doesn't mean things are getting cheaper; it means things are getting more expensive at a slower rate, which can give consumers time to allow wages to catch up to inflation.  

Gross domestic product (GDP) has also continued to grow at a relatively respectable rate. GDP grew 2.5% in 2023, an increase from 1.9% in 2022. 

Much of this indicates a strong economy in which consumers would seemingly be thriving. But according to a recent Harris Poll by American Political Studies (CAPS) at Harvard University, nearly 1 in 2 voters say their financial situation is "getting worse." In June 2022, the same poll showed 64% of respondents saying their financial situation was getting worse. While the number of respondents saying their situation is declining has slowly dropped over the past 18 months, that's a year and a half of voters struggling financially.

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Most groups said their financial situation was getting worse, with the exception of Democratic voters, those ages 35 to 44, urban voters and Black voters who say their situation is "improving."

More than half of female voters — 53% — said their situation is getting worse, compared to only 21% saying it's improving. Hispanic and Republican voters saw the largest disparity, with 65% of GOP voters saying it's getting worse compared to 14% saying it's improving. Twenty percent of Hispanic voters reported their situation is improving and 60% say it's getting worse. 

Male respondents were relatively evenly spread with 34% improving, 41% getting worse and the rest with "just as well off." Young voters ages 18 to 24 have a relatively wide disparity with only 30% saying it's improving while 51% noting it's getting worse. 

While some of this disparity can be explained by politics, with Democratic voters saying their situation is getting better under Biden, there might be some indications of broader issues. 

Household debt has skyrocketed alongside increases in interest rates to levels well beyond those of the 2008 crash. Americans now have $1.13 trillion in credit card debt and $4.89 trillion in nonhousing debt. As interest rates rise, consumers spend substantially more on interest, decreasing expendable income. In 2008, nonhousing debt reached $2.71 trillion.

Similarly, debt associated with housing has also continued to skyrocket. U.S. households now hold a record $12.61 trillion in household debt, up from $9.99 trillion in 2008.

Interest rates have begun slowly coming down in recent months, with the Federal Reserve signaling rate cuts will begin later this year. This could ease the situation among voters going into the 2024 election. 

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