The cause of the depressed consumer sentiment in the Biden economy can be attributed to inflation rather than partisanship. Many people are dissatisfied with the current economic situation due to rising inflation rates. The Biden administration and the media are trying to convince the public that the economy is doing well, but the reality is that inflation is impacting consumer sentiment.
There are different opinions on the issue, with some blaming media bias for negative economic stories, while others believe it is just partisanship. However, the shift in consumer sentiment during Biden’s presidency is more likely due to economic fundamentals. As inflation rates continue to rise, Americans are becoming less optimistic about the future.
Despite claims that real wages are higher than before the pandemic, the reality is that they have barely increased and have even fallen below pre-pandemic levels. The gap between inflation-adjusted wages and the trend line highlights the dissatisfaction with Biden’s economic policies. As inflation continues to rise, the situation is unlikely to improve.
As the chart below shows, real wages are far below where they would be if they had just kept rising at the pace they were when Trump was president.
Here’s a version of the chart showing the trend line.
The gap between the red line trend and inflation-adjusted wages explains a good deal of the public’s dissatisfaction with Biden’s economic stewardship. And the fact that inflation is once again rising suggests that the situation is unlikely to improve.
Next week will bring another report on inflation, and it looks like it will again be bad news.
