US Economy Grows Solidly, But Voter Sentiment Remains Wary Amid Election
The US economy expanded at a solid pace from July to September, with the GDP growing at an annualized rate of 2.8%, as reported by the Commerce Department. Although slightly down from the prior quarter’s 3% growth, the recent data shows the US economy performing robustly in comparison to other major economies this year. Consumer spending remained a primary driver of the growth, rebounding from earlier in the year and helping keep economic momentum strong.
This economic report comes just days before the hotly contested presidential election, where polls suggest that the economy ranks as the top issue among Americans. Yet despite the positive data, sentiment remains subdued. Americans have faced a roughly 21% rise in prices over the last four years, overshadowing recent economic gains. A recent poll by the Associated Press-NORC Center for Public Affairs Research found that 62% of Americans currently view the economy as “bad.”
The economy’s impact on the election remains uncertain. Historically, economic concerns play a significant role in elections—a concept popularized in 1992 with the phrase, “It’s the economy, stupid.” However, with partisan divides at their peak, many analysts believe that political allegiances may overshadow economic factors this year. “Even though the economy is based on numbers, a lot of people’s views are partisan,” said Marjorie Connelly, senior fellow at the AP-NORC Center. “The economy will be a factor, but … partisanship will be the biggest factor.”
The recent AP-NORC poll reflects these divisions. While 61% of Democrats view the economy as strong, only 13% of Republicans share this view. Voters are also split along party lines regarding who they trust more on economic issues, with Republicans favoring former President Donald Trump’s past performance and Democrats more supportive of the current administration. Trump has highlighted his own economic record, framing it as a more stable period compared to recent years and pitching this as a key reason for his reelection.
Despite widespread economic concerns, recent data has painted a largely positive picture. Petrol prices have fallen, grocery prices have stabilized, and wages over the past year have grown faster than inflation, which has helped some households cope with the higher cost of living. In September, the Federal Reserve cut interest rates for the first time in four years, citing progress in controlling inflation. The job market has also shown resilience, with September experiencing a sharp rebound in job growth, alleviating concerns of an impending downturn.
This upward trend in economic metrics has led to an improvement in consumer confidence. The Conference Board’s monthly index of consumer sentiment rose in October, with a notable increase in confidence around job availability and future financial prospects. For the first time since July 2022, the share of people concerned about an economic recession fell to its lowest level.
Dana Peterson, chief economist for The Conference Board, attributed the improved outlook to a clearer view of the economic situation: “The data are the data. We’re seeing that third-quarter GDP was strong, the job market is healthy, and inflation is slowing,” she said. “After several years of volatility, consumers are saying we think inflation is not as intense, we’re not where we were… and we’re not as worried.” As election day nears, the economy remains a top issue, but partisan divides and other national concerns may ultimately steer voters.
