Listen to the men who are (one) president of the United States or (two) trying to get that job again and you might think this country has at least two very different economies.
President Joe Biden is trying to win a second term this year by selling an economic rebound, with data to back it all up. But voters sure seem slow to buy that.
Former President Donald Trump paints a picture of looming economic collapse with his standard “only I can fix it” messaging. He went so far earlier this month to openly wish for an economic “crash” in the country this year.
Everyone else is giving off wait-and-see vibes. That’s bad news for both Biden and Trump.
Ask economists and people who understand political messaging. They’ll tell you, like they told me, that Biden needs voters to feel much better right now about their economic outlook. And Trump needs people to fear it’s all teetering on the edge of a cliff.
The truth, as always, is somewhere in the middle of all that. The economy is improving. But it’s not all the way back. Inflation is slowing. But things still cost more than they used to. The numbers look good. But numbers don’t always go in the direction you want.
When will voters see the realities of the economy?
Larry Sabato, director of University of Virginia’s Center for Politics, told me the economy “is usually a lagging indicator” for voters showing confidence that we’re in an upswing.
“It takes people a while to believe good news in particular,” Sabato said. “Fortunately for President Biden, the economy is clearly turning around at the right time for November.”
While Trump’s base won’t stray with the news, Sabato added, Biden’s second term hinges on him motivating his own voters and “winning the small number of true independents.”
Here’s what the math shows us about the economy now: America’s economy grew at a rate of 3.3% in the last three months of 2023 and by 2.5% overall for the year.
Trump bragged about an economy he now says will ruin the country. Biden took that opportunity to laugh.
Trump spent most of his lone term as president bragging about similar numbers.
The Democratic National Committee on Thursday brought receipts, offering links to six times that Trump took credit for economic growth in 2017 and 2018.
In one, Trump said during a July 2017 cabinet meeting that a 2.6% quarterly growth rate that had just been announced “is an unbelievable number.” Two months later, he told reporters flying with him on Air Force One that “everybody was shocked” to see a newly announced quarterly rate of 3%.
Trump is singing a different song these days. Campaigning in New Hampshire Monday, he called Biden “a disaster on the economy.”
Even Trump, in that speech, had to slip in a caveat – “except for the stock market.” He was speaking two days after the S&P 500 hit a record high.
Biden had some fun with that Monday, posting video on the website previously known as Twitter of Trump claiming three days before the 2020 election that the country would see “a stock market collapse the likes of which you’ve never had” if Biden won. That was coupled with a clip from Fox News touting the recent good news about the stock market.
“Good one, Donald,” the current president trolled his predecessor.
Trump knows he needs the economy to tank for him to get reelected
Trump has good reason to hope for a bad economy. Any win for Biden makes Trump’s bid for the White House less likely to succeed.
That’s why Trump is trying to kill bipartisan negotiations in the U.S. Senate on legislation to improve border security and reform immigration. That would erase another line of attack for the ex-president.
Trump is playing to consumer fear while Biden courts them with hope. Fear has always been an easier sell.
When will voters believe the good economic news?
We just spent 2023 listening to endless punditry about an allegedly looming recession. And while those warnings are on the wane, they clearly left some lingering doubt, particularly along partisan lines.
A Suffolk University/USA TODAY poll this month showed signs of optimism, but also found that Republicans were far more likely than Democrats to assume the country is currently in a recession rather than in recovery.
Joanne Hsu, director of University of Michigan’s Surveys of Consumers, said consumer confidence has been “relatively slow” to rebound in the last year, despite the evidence of an improving economy. But then it jumped by nearly 30% as 2023 became 2024.
“That’s really unusual,” Hsu said. “The last time we saw an increase of that magnitude was in 1991, when we were coming out of a recession.”
That confidence, she added, is reflected among Democrats, Republicans and independents. But she cautions, it’s still trending at about 7% of the historical average, compiled since 1978.
Inflation issue lingers with voters
James Pethokoukis, who analyzes economic policy as a senior fellow at the American Enterprise Institute, said inflation is “the entire story” about consumer confidence because we all just lived through a spike in increased cost unlike anything seen in the last 40 years. That sticks with people more and longer than other economic news – unemployment, job layoffs, interest rates and so on.
“Inflation, that affects everyone,” he said. “It is a far more pervasive phenomenon. So it was an economic shock.”
And, with inflation, prices are more likely to stop going up than they are to come down. Pethokoukis said this summer will be critical for the economy, consumer sentiment and the presidential election.
“People have short memories,” he said. “They’re going to care a lot more about what happens in the economy in the six months before they go to the polls in 2024 than what happened in 2021 or 2022.”
Expect to hear plenty from Biden between now and November about things looking up. He’ll be touting statistics, just like Trump back in 2017 and 2018.
And Trump will spout pessimism nonstop, since a bad economy is good for him. He’s already shown a willingness to lie about the data and distort the current economic conditions because that’s what he needs to win. The better things get, the more we’ll hear about how terrible it all is.
Follow USA TODAY elections columnist Chris Brennan on X, formerly known as Twitter: @ByChrisBrennan
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
