The U.S. economy expanded solidly in the third quarter of 2024, growing at an annual rate of 2.8%, according to figures released by the Commerce Department. While this marks a slight slowdown from the previous quarter’s 3% growth, the data indicates that the U.S. remains on track for one of the strongest economic performances among major economies this year. The primary driver behind this growth was consumer spending, which has seen a rebound compared to earlier in the year.
This economic report comes just days before polls close in a closely contested presidential election, where surveys consistently indicate that the economy is the foremost concern for American voters. However, experts suggest that these latest figures may not significantly alleviate public worries.
Despite the positive economic indicators, sentiment remains low. A recent poll by the Associated Press-NORC Center for Public Affairs Research revealed that 62% of Americans currently view the economy as “bad.” The pandemic has cast a long shadow over economic sentiment, with a substantial 21% increase in prices over the past four years dampening public perception, regardless of encouraging data.
In a political landscape where the phrase “it’s the economy, stupid,” coined by strategist James Carville in 1992, remains relevant, the economic concerns could pose challenges for Vice President Kamala Harris and the Democrats, the incumbent party. Former President Donald Trump is leveraging his record during his presidency, a time often viewed as more favorable economically, to appeal to voters.
Analysts, however, caution that the electorate’s perception of the economy has become increasingly partisan. Marjorie Connelly, a senior fellow at the AP-NORC Center for Public Affairs, noted, “Even though the economy is based on numbers, a lot of people’s views are partisan.” The poll indicated a stark divide, with 61% of Democrats viewing the economy positively, compared to just 13% of Republicans and 28% of independents.
Despite economic concerns being high on voters’ lists, other issues may ultimately influence election outcomes more decisively. Connelly added, “I don’t know how much people are going to vote on the economy. There are other issues.”
The economy consistently ranks as a top voter concern, in part because it is one area where a significant number of both Democrats and Republicans find common ground. Recent hard data supports a positive outlook, with declining petrol prices, stabilizing grocery costs, and rising wages helping many families cope with increased living expenses.
The Federal Reserve cut interest rates for the first time in four years in September, expressing growing confidence that inflation is easing. Additionally, a strong rebound in job growth and an increase in the Conference Board’s consumer sentiment index in October further bolstered optimism.
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, suggests that rising sentiment may be linked to increased confidence among Republicans regarding Trump’s electoral chances. However, Dana Peterson, chief economist for The Conference Board, emphasized the importance of tangible economic data, stating, “The data are the data… we’re not as worried.” As the election approaches, the interplay between economic data and political perceptions will be closely watched.
