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The disconnect between facts and feelings when it comes to voters and the economy

JUANA SUMMERS, HOST:

The U.S. economy is growing. Jobs are plentiful. Wages are climbing. And yet, many people still feel stretched when it comes time to pay the rent or fill their car up with gas, and those feelings could shape the way people vote this November. All this week on the program, we are talking about how the economy is affecting voters and their political choices. And today, we're going to take a big-picture look with NPR senior political editor and correspondent Domenico Montanaro and economic correspondent Scott Horsley. Hi, guys.

DOMENICO MONTANARO, BYLINE: Hey. Glad to be here.

SCOTT HORSLEY, BYLINE: Good to be here.

SUMMERS: Domenico, let's start with you. President Biden has a pretty low approval rating when it comes to the economy. Help us understand what's driving that, and is that helping his challenger, former President Donald Trump?

MONTANARO: Well, I mean, prices just haven't gone back to kind of prepandemic levels, and people haven't come around to, really, a new normal when it comes to those prices. You know, interest rates are still higher than they were. It makes it harder to buy homes or cars. And that's why people just aren't necessarily, quote, "feeling," you know, all that good data and are pretty glum about the state of the economy. Trump is continuing to benefit from it, of course. You know, he's holding a big advantage in the polls on who would do a better job at handling the economy, and more people are saying that they think the economy was better under him.

HORSLEY: Yeah, and it's interesting - when people remember the good economy under Trump, their memory seems frozen in February of 2020, and they kind of ignore everything that came after that. I mean, four years ago this month, 20 million people lost their jobs in this economy. During Trump's last year in the White House, the unemployment rate soared to nearly 15%. Obviously, Trump is not to blame for the pandemic, but that is part of his economic scorecard, just as pandemic-related inflation is part of the Biden scorecard.

MONTANARO: I think it's funny because I continue to hear Trump and his campaign say that - you know, ask, are you better off than you were four years ago? I think he means five (laughter).

SUMMERS: Right. Scott, sticking with you, in looking at the economy now, the sort of glum outlook that many Americans have seems to be at odds with some of the more positive economic indicators that we've been talking about, like, say, the very low unemployment rate and the strong GDP growth. Unpack that for us.

HORSLEY: Yeah, Domenico is right. There's no doubt people feel stung by inflation. Every time they go to the grocery store, they're reminded that food costs more than it used to. Price of car insurance keeps going up, for example. But even though people say they're unhappy about that, they really haven't cut back on spending. Consumer spending has remained surprisingly strong, which is a big reason the U.S. economy keeps growing faster than the GDP in most other countries.

Now, some of that spending is being put on credit cards, and that's really expensive debt for people who don't pay it off every month. But a lot of spending is also being financed by higher wages. You know, more people are working now. They're earning more money. And even though prices are higher than they were before the pandemic, the average paycheck goes further now than it did back in, say, 2019.

SUMMERS: Domenico, from your vantage point, any sign that people are taking notice of that and that moods are getting any better?

MONTANARO: Well, there has been some improvement. The Gallup economic index, for example, is the highest it's been in years, but still only 30% are saying that it's either good or excellent. Much of that improvement is coming from Democrats. And economic views have become more partisan in the past two decades, so it's not surprising, in an election year, that there might be something of a rallying-around-the-president-of-your-party effect and also maybe not a surprise that Republicans would rally around their nominee as well and not concede an improving economy. Remember, Biden won once and needs to convince the people who voted for him then to vote for him again. But really, the next two to three months are going to be really crucial in this to see whether the economy improves or not.

SUMMERS: Scott, I've got to tell you, one of the challenges we hear about over and over again is housing. I mean, rents are high. Mortgage rates are also quite high. How is that affecting people's attitudes?

HORSLEY: Yeah, housing costs are high, and especially anyone trying to buy a first home has the real double whammy of high asking prices and high mortgage rates. Of course, people who already own homes are largely insulated from that 'cause they've locked in cheaper mortgages, but there's no question the housing shortage is a real challenge in this country. We are starting to make some headway. Hundreds of thousands of new apartments came online in the last year. More are on the way. Homebuilders are keeping busy, and some are even trying to build smaller, more affordable homes.

We're even starting to see some changes in local zoning rules to encourage more building. You talked this week with Ellen Lamont about the high cost of housing in my hometown of Denver. Well, Colorado's governor just signed a bill making it easier to have more roommates in the state, and the Colorado legislature is looking at ways to boost housing density. So there's a big hole to dig out of, but you are starting to see some progress.

SUMMERS: Domenico, Scott just mentioned the state of Colorado. But, as you well know, the presidential election - likely to come down to just a handful of swing states. What are we seeing there?

MONTANARO: Well, it's a good reminder that the national economy is not the whole story, and not all voters feel or are affected by the economy in the same way. I mean, it's a big country. Republicans, for example, view inflation as a bigger issue than Democrats do. Part of that's politics, part of that's reality because more Republicans are in rural areas and rural areas have seen higher inflation than cities and suburban areas.

And it's not the same in every state, either. Nevada, for example, is a key swing state - has a large and growing Latino population, which is key to Biden's reelection. But they have negative views on how Biden is handling the economy. Why? Well, look at the economy in the state. Nevada's 49th in the country in employment. The jobless rate is at 5.1%, and the economy hasn't fully recovered since the pandemic there. So demography is important, but it isn't everything. Issues matter too.

SUMMERS: NPR's Domenico Montanaro and Scott Horsley. Thanks, both.

MONTANARO: You're welcome.

HORSLEY: You're welcome.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Domenico Montanaro is NPR's senior political editor/correspondent. Based in Washington, D.C., his work appears on air and online delivering analysis of the political climate in Washington and campaigns. He also helps edit political coverage.
Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.