What happens when the flow of money stops?

President Joe Biden is going into an election with U.S. unemployment near a record low, wages growing, and inflation back under control. Such economic achievements would usually be a huge selling point, but this time it may not be the case. One possible explanation is that people are still feeling worse off after the spike in inflation in 2021 and 2022.

Increases in gross domestic product and low unemployment rates won’t help a reelection campaign if voters feel like they are getting poorer. The spike in inflation is casting a long shadow. Even though price growth has slowed considerably, prices are considerably higher than just a few years ago and still rising, so people continue to feel the bite of diminished purchasing power.

The U.S. unemployment rate was at 3.7% in January, about as low as it has been since early 2020. Wages have been growing at a faster pace than inflation since March of last year. But inflation outstripped pay growth for two years before that, and people remember.

The median household income, adjusted for inflation, dropped from 2019 to 2022. A CNN poll earlier this month showed that almost half of Americans think the economy is in a downturn, with most of them citing a higher cost of living to support their view.

According to a January 25 Pew poll, 65% of Americans say they disapprove of Biden’s performance, compared with 33% who approve. You get a sense that one can’t get ahead, and you feel that struggle. Defying the laws of gravity, the major stock averages had an extraordinary 2023 despite the headwinds of higher interest rates driven in part by a massive flow of dollars from the federal government to the masses. What happens when the money flow stops? Will voters just take note of the economic data on paper, or will they dig deeper and have questions before they cast their votes?

MIKE SPHAR Yuma