Investors feel bullish but not for Biden
By Wealth of Geeks via AP
The Pew Research Center released findings from a survey this January, giving insight into how Americans feel about the economy. It holds good news and bad news for the incumbent Biden administration. Americans are feeling upbeat about the country’s financial shape, but they don’t want President Biden steering the ship.
65% of Americans now disapprove of the 46th United States president, and this cohort includes a wide age ratio. 71% of adults between 18 and 29 years are now against his presidency, a significant drop in The President’s influence over the youngest Americans. Moreover, voters’ assessment of whether Biden will leave a positive legacy has deteriorated. In January 2021, only 26% of respondents believed he would be a failure; that number more than doubled by January 2024.
The stock
market miracle
This feedback is juxtaposed with how well the U.S. stock market performs. The S&P 500 stock index has undergone an economic miracle since 2020’s pandemic-driven economic halt, doubling since that period’s low point. The 2022 invasion of Ukraine by Russia contributed to a later downturn, but Wall Street has bounced back spectacularly, achieving new highs this past fiscal year.
Consequently, there are signs Americans are feeling encouraged after an indifferent five years. In a nine-point upturn, 28% of people surveyed feel the U.S. economy is “excellent or good.” In light of such a strong run, why does only 33% of the American public have a favorable view of Biden’s White House tenure? Sometime during 2021, the American public had had enough — this is the year Biden’s disapproval overtook approval, never to fall again.
While 28% of voters feeling bullish does represent a positive, this is still a minority, and consumers in the Pew Research study still have major concerns. The price of consumer goods and food sits atop a list of other worries, though it has fallen from 75% to 72% of respondents.
Housing prices trouble 64% of those surveyed, a four point increase reflects the fastest growing anxiety on the poll. The best news of all comes for business owners and industry leaders: unease about the price of fuel and electricity has dropped most — down 10% to only half of people questioned.
“There are indications that consumers are running out of dry powder,” wrote New York Times economics writer Lydia DePillis last October. “Disposable personal income, adjusted for inflation, decreased in the (3rd) quarter (of 2023), as did the personal savings rate.” Even with this reduced spending power, consumers bolstered economic growth over that period, though this was because of slowing inflation, which had been crippling growth for some time before.
Solid economics
However, the storm clouds are parting finally for investors, if not for the average wage-dependent employees still reeling from inflation stuck at a stubborn 3.5%. Growth has slowed in the first three months of 2024 from the previous quarter’s 3.4% level. But the American GDP settled at 1.6% this quarter, according to the U.S. Bureau of Economic Analysis. In a separate New York Times report, Chief U.S. economist at Bank of America Michael Gapen confirmed these are signs of a “solid economy.”
Even as the U.S. stock market continues its great escape act, life for many people in the middle and working classes has become untenable. In 2023, Forbes collaborated with Statista to present how America’s middle class has been shrinking since 2020. They found more had fallen to the bottom end of this demographic than had reached the top, resulting in a middle class that now represents only half of America’s population.
Meanwhile, the same publication’s world-famous “Rich List” from 2021 listed 660 more billionaires than the year before. This figure was up almost 30% and covered $13.1 trillion of wealth, over 50% more than in 2020. Incidentally, a Bloomberg feature revealed in the same year that 20% of U.S. households lost all their savings during this period.
The Covid lockdowns had a profoundly negative effect on middle-class Americans and a crippling one on those less well-off, many of whom are yet to recover from the aftermath. Some liken this to a “ Reverse Robin Hood effect.”
The Great Wealth Transfer
There is still much to anticipate, and the economic expansion to come is also a cause to celebrate for Generation X. Over the next several decades, the so-called “Forgotten Generation” will witness the largest transfer of generational wealth in American history. Kiplinger Personal Finance says baby boomers are nearing the end of their lives, so their children will inherit close to $84 trillion in lifetime savings, becoming part of the “Great Wealth Transfer.”
President Joe Biden is a baby boomer, one whose public appearances seem to depict a leader on borrowed time, both physically and politically. Whether the soon-to-be oldest generation has the ability to keep America’s stock market performing the miracles of yesteryear remains to be seen.
