By many measures, as of the spring of 2024, the US economy is doing very well – but many Americans don’t agree, a trend which has been termed the “vibecession”. Ian G. Anson writes that polling shows that Republicans and Democrats perceive the US economy in starkly different terms, with Democrats feeling much more positively compared to Republicans, regardless of their own levels of prosperity. He finds that Americans often no longer see their personal economic situation in the same terms as they see the nation’s economic progress and that they often rate the US economy more negatively than that of their own state. 

• This article is part of ‘The 2024 Elections’ series curated by Peter Finn (Kingston University). Ahead of the 2024 election, this series is exploring US elections at the state and national level. If you are interested in contributing to the series, contact Peter Finn (p.finn@kingston.ac.uk).

James Carville’s famous Clinton-era phrase, “It’s the economy, stupid,” continues to resonate among American campaign professionals and political scientists alike. When US presidents preside over strong economies, they tend to win re-election. When the economy falters before Election Day, however, even relatively popular, successful incumbents can face a sudden reversal of electoral fortunes.

The 2024 US Presidential election promises to be a curious test of this decades-old adage, because more than ever, Americans’ beliefs about the national economy contradict the economic data. What’s more, Americans’ perceptions of personal and local economic conditions are becoming uncoupled from their views on the national economy. Americans also cannot agree on the state of the economy, with wide variation in individuals’ beliefs. The effects of the real economy on President Biden’s vote share, therefore, are more ambiguous than they have been in the past.

The Biden economy looks pretty good on paper

By some measures, Joe Biden is currently presiding over one of the strongest economies on record. In the aftermath of the COVID-19 pandemic, the US experienced surging inflation that alarmed consumers, the stock market, and the Federal Reserve. By June 2022 the annualized inflation rate (CPI) stood at a multi-decade high of 9.1 percent in the United States However, Fed rate-setting has worked to tame inflation since that high-water mark, and wage increases—especially among the bottom quartile of earners—have staved off a good portion of the effects of inflation on purchasing power for that group. Despite ongoing concern over high prices, Americans’ earnings are beginning to close the gap opened by inflation in 2021 and 2022.

Still other economic information shows evidence of a robust economy. The labor market is strong, with the official unemployment rate hovering between 3.7 percent and 3.9 percent in recent months. Stock market indices are up, with steady increases in the S&P 500 index over the past six months. Credit card use is increasing, however, indicating that some Americans are experiencing increased financial stress due to rising prices. Not everyone has secured big raises, and those workers are feeling the sting of high commodity prices. Prices for transportation, food, and housing are sharply up—all necessities that are impossible to go without.

What drives variation in Americans’ economic beliefs?

A large volume of existing research shows that Republicans and Democrats perceive the US economy in starkly different terms. Indeed, results from a February 2022 ABC News/Washington Post phone poll of over 1,000 Americans shows a pattern that is evident in most other polls since the early 2000s (Figure 1). The survey asked a question about how the economy has fared since Biden took office, with response options including “Excellent”, “Good”, “Fair”, and “Poor”. Results show that around 48 percent of Democrats rated the economy as “Excellent” or “Good”, even with inflation sharply on the rise. In contrast, only about 12 percent of Republicans said the same—they almost universally rated the economy as fair to poor.

Figure 1 – National economic perceptions by political party

While it is possible that these gaps in sentiment stem in part from differences in the economic profiles of Republicans and Democrats, further analysis of the poll shows that compensating for other demographic factors yields negligible changes to the result. Regardless of their own level of prosperity, Republicans have been much more pessimistic about the economy than Democrats during the Biden administration.

“Vibecession?” 

Despite the influence of partisanship, Americans across the political spectrum currently harbor pessimism when they reflect on the present economic situation. After all, despite the power of partisan cheerleading, even a simple majority of Democrats rated the economy as fair to poor in the poll seen above. In 2022 Commentator Kyla Scanlon went so far as to describe this situation as a “vibecession”, or a recession based solely on vague feelings of economic unease. Since that time, the vibecession has remained a subject of ongoing debate, with some commentators recently wondering whether the strong labor market signals of recent months has finally cured Americans of their undue pessimism.

Curiously, though, this pessimism seems to extend only to the realm of the national economy—but not to other forms of economic appraisal.

“ground dollar” (CC BY 2.0) by HeyRocker

Looking at personal and national economic evaluations

While data for 2024 is not yet available, the American National Election Studies (ANES) can offer some insights. The ANES is the gold standard survey instrument for political science research. Using its cumulative data file, I examined the correlation between Americans’ national economic evaluations and their personal economic evaluations from 2012 to 2020.

A correlation coefficient can tell us how closely matched a group’s personal and national economic attitudes might be. Correlations close to 1 mean that these two perceptions are virtually identical, while correlations close to 0 indicate that most often, the evaluations of national and personal economic conditions do not line up. Simply put, when we see small correlation coefficients in this context, it tells us that a group’s beliefs about the US economy are not closely related to the same group’s views about whether their own pocketbooks have fared better or worse in recent times.

Figure 2 summarizes the relationship between personal and national economic evaluations, broken down by election year and party identification. We see that while there is some variation across party lines, ANES data shows the relationship is getting weaker for all groups over time. In 2012, the correlation coefficient for Democrats was about 0.33, meaning that Democrats’ beliefs about their own personal economic circumstances helped to explain about 33 percent of the variation in their beliefs about the broader economy. At about 30 percent, Republicans had a similarly strong tie between the two perceptions.

Figure 2 – Correlation between national and personal economic evaluations by party 2012-2020

By 2020, the relationship had weakened substantially. Democrats showed a correlation coefficient of around 0.11—only about a third as strong as it was in 2012—and Republicans a coefficient of around 0.17, which was only a little more than half of their 2012 figure. The 2024 election promises to show a similar trend. More than ever, Americans don’t see their personal economic situation in the same terms as they see the nation’s economic progress.

Differences between the national and local economy

They also see differences between the national and local economy. In a 2024 Wall Street Journal poll of swing states respondents were asked to indicate whether they thought the national economy had gotten better, worse, or stayed about the same over the past two years. But they were also asked to report the same perception of their own state’s economy. Figure 3 below, shows what happened when the analysts who conducted the poll compared these two perceptions.

Figure 3 – Has the US economy or your state’s economy gotten better or worse in the last two years? Net share answering ‘better’

About 30 percent more respondents said the national economy had gotten “worse” than those who said it had gotten “better”. However, those same respondents thought their state economies were doing just fine. Respondents in Arizona, for instance, were 30 percent more optimistic on balance than they were pessimistic. Respondents in the key swing state of Pennsylvania also rated their state’s economy with about 25 percent more optimism than pessimism.

Of course, the states in question had economies in 2024 that closely tracked the economic prosperity of the country. These large gaps in economic perceptions across national and state levels are almost entirely due to perceptual differences rather than real economic disparities.

Why are Americans’ economic appraisals so jumbled—and what does this mean for the 2024 election?

Many explanations for these perceptual gaps have been put forward by commentators. Some see undue pessimism in the news media driving vibecession-like attitudes about the US economy even into 2024. Others argue that economic fundamentals fail to capture the real pain felt by Americans when trying to afford necessities and housing prices in the current period. But if the pain is real, why are personal and local economic evaluations much more optimistic than national evaluations?

The evidence shows that while undue negativity has creeped into economic beliefs at the national level, other perceptions paint a much more complicated picture. It is possible that the standard “national economy” measures in surveys are failing to capture the mixed economic appraisals of Americans, especially as the economy continues to improve in notable ways.

Americans’ beliefs about the future economy appear to be the most important predictors of vote choice. Those attitudes can change quickly in response to new information, and will be most impactful on vote choice in the weeks just prior to the election. It remains to be seen whether Americans’ perceptions of the US economy begin to better reflect objective indicators and their own beliefs about other economic matters. But for now, with these signals so starkly unaligned, it is unusually hard to say what effect the real economy will have on Biden’s vote share in November.

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