Voters See a Bad Economy, Even if They’re Doing OK

The fastest inflation in four decades has Americans feeling dour about the economy, even as their own finances have, so far, held up relatively well.

Just 10 percent of registered voters say the U.S. economy is “good” or “excellent,” according to a New York Times/Siena College poll — a remarkable degree of pessimism at a time when wages are rising and the unemployment rate is near a 50-year low. But the rapidly rising cost of food, gas and other essentials is wiping out pay increases and eroding living standards.

Americans’ grim outlook is bad news for President Biden and congressional Democrats heading into this fall’s midterm elections, given that 78 percent of voters say inflation will be “extremely important” when they head to the polls.

It could be bad news for the economy as well. One long-running index of consumer sentiment hit a record low in June, and other surveys likewise show Americans becoming increasingly nervous about both their own finances and the broader economy.

Economists have long studied the role of consumer sentiment, which can be driven by media narratives and indicators unrepresentative of the broader economy, like certain grocery prices or shortages of particular goods. At least in theory, economic pessimism can become self-fulfilling, as consumers pull back their spending, leading to layoffs and, ultimately, to a recession.

Christina Simmons grew up poor and has worked hard to give her 7-year-old son a better life. She has climbed the ranks at the health insurer where she works near Jacksonville, Fla., and has more than doubled her salary over the past few years. Yet she feels as if she is falling behind.