Updated Jan 20, 2024 - Economy

A Biden boost: 3 economic signs lift campaign

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Data: FactSet. Chart: Axios Visuals
Data: FactSet. Chart: Axios Visuals

Three major economic gauges are suddenly marching in the right direction, giving President Biden's campaign a sunny opening after months of gloom.

Why it matters: While Biden promoted big-picture benefits of Bidenomics, declining poll results showed lacking optimism.

Details: There now are signs happier days may be ahead for the White House.

  1. The S&P 500 and Dow industrials both set new highs, confirming we're in a full-on, horns-out, snorting bull market. The S&P 500 closed nearly 1% higher than the previous record, on Jan. 3, 2022.
  2. A University of Michigan index that tracks consumer sentiment has surged more than 28% since November. Since the late 1970s, the only other period of such a rapid two-month turnabout came in March 1991, after the U.S. victory in the first Gulf War, Axios' Matt Phillips writes.
  3. Economists say high inflation has mostly been vanquished. Retail figures this week showed jolly holiday spending that exceeded optimistic forecasts, and signaled Americans are confident enough to keep spending, Axios' Courtenay Brown writes.

What they're saying: Ron Klain, Biden's former chief of staff, referenced a report from Davos that global business leaders privately expect Donald Trump would win a rematch with Biden.

  • "I think the whining titans in Davos are definitely behind the curve," Klain texted. "People always underestimate Joe Biden and they've done it again!"

Our thought bubble: These three measures are all pretty related, Axios business editor Kate Marino said.

  • Inflation coming down convincingly helps lift the stock market — and both of those help lift consumer sentiment.

Reality check: The 2016 election showed that Trump doesn't need a bad economy to win.

  • Perception of the economy used to influence political leanings. Nowadays, Americans' political leanings often determine how they perceive the economy.

Flashback: Americans are getting more optimistic — and have reason to be — Axios' Felix Salmon wrote in pieces on Jan. 3 and Jan. 17

What's next: "This is the hopeful scenario for Biden," David Axelrod, former President Obama's political architect, told Axios.

  • "Voter sentiment generally lags economic statistics. There are still 10 months until the election. Attitudes on the economy may yet shift in Biden's direction by the time Americans cast their ballots."
  • Axelrod added: "Can you imagine how Trump would be crowing if he had these stats?"

The bottom line: When asked if Biden should do more of that, Axelrod responded:

  • "No. I don't think behaving like Trump beats Trump. Better to let people know that you're focused on them and not yourself. On making progress rather than grabbing credit."

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