“It’s the economy, stupid.” James Carville, the flamboyant Clinton campaign strategist, dropped this quip in 1992 explaining what mattered most to voters during Bill Clinton’s successful bid to unseat President George H.W. Bush. Bush oversaw a recession and lost.
Historically, as goes the economy, so goes the president’s reelection chances. According to the National Bureau of Economic Research and Goldman-Sachs, the incumbent has won reelection in every U.S. presidential election since 1948 — except for those during or following a recession.
With no recession in sight, shouldn’t we assume the incumbent administration (to the extent that’s what Vice President Kamala Harris’s campaign represents) will coast to a win? In the year 2024, that’s complicated.
Recent data suggests swirling economic unrest bubbling underneath mostly positive metrics. Since at least 1980, consumer sentiment (a subjective measure of how the population feels about the economy) has predictably tracked with unemployment rates and inflation. As unemployment and inflation fall, sentiment goes up proportionally. Until now.
Through April 2024, as inflation fell from 2022 highs and unemployment bottomed out to near historic lows, consumer sentiment should have spiked to 92, as measured by the University of Michigan Index of Consumer Sentiment. However, the actual April 2024 number was 76.5. In May, as unemployment remained low and inflation ticked down, sentiment counterintuitively fell again to 67.4, a six-month low.
Further underscoring the moody temperament of the electorate, a large recent Harris/Guardian poll indicated that 56 percent of respondents think the U.S. is currently in a recession (defined as a negative GDP for two consecutive quarters), although GDP has been positive every quarter since early 2022, and the last recession ended in April 2020.
Perhaps we’re in a pseudo-recession — a recession of the collective mind, if you will.
So, if incumbents are in danger during an actual recession, are they in danger if voters falsely believe we’re in one?
The 2024 election may be a case of perception equating reality.