There used to be a solid relationship between the state of the economy and a U.S. president’s popularity. The occupant of the White House got much of the credit for good times and much of the blame for bad times.
Not any more.
President Joe Biden came into office in early 2021 with an approval rating of more than 53 per cent, according to a running tally of polls compiled by the website 538. The honeymoon was brief. By the summer of 2022, his approval rating was 37.9 per cent.
And as the U.S. economy roared back from the pandemic, Mr. Biden’s own numbers barely budged. Today, the U.S. unemployment rate is just 3.9 per cent. There’s been widespread wage growth. Inflation had been wrestled down to 3.1 per cent as of January, with no recession. And Mr. Biden’s approval rating is stuck at 38 per cent.
Past U.S. presidents have had periods of low poll numbers but – with the exception of Donald Trump – almost never when the economy was doing well.
In early 1983, for example, Ronald Reagan’s approval rating was lower than Mr. Biden’s is today. But unemployment was at almost 11 per cent. And when the economy recovered, so did Mr. Reagan’s popularity. In the 1984 election, his Morning in America campaign won 49 of 50 states.
Mr. Biden’s approval rating is even below that of his predecessor. Four years ago this week, Mr. Trump’s score was four points higher.
What gives?
One theory is that we’re living in a world post-truth age. There’s no actual recession, just a vibe-cession. The economy may not be objectively awful, but people still feel awful.
The Michigan Consumer Sentiment Index reached its lowest level in history not in the depths of the pandemic, or the blackest days of the 2008 financial crisis, but in the summer of 2022. The index has risen since, but it’s still barely higher than it was in April, 2020 – when the unemployment rate was nearly 15 per cent.
A second issue bedevilling Mr. Biden’s popularity may be housing prices. As in Canada, though to a lesser extent, prices and rents in most U.S. markets are up since the start of the pandemic. The real estate site Zillow estimates that asking rates for rent have risen 30 per cent, and the share of median household income needed for rent has gone to 29 per cent from 27.3 per cent.
For homeowners with no plans to move, this may be a non-issue. But for millions of other Americans, their inflation rate doesn’t just feel higher than the consumer price index. It may be objectively higher.
A third explanation for what’s hurting Mr. Biden is related to the first: U.S. politics has become so polarized that one part of the electorate – Republicans – simply doesn’t believe good news associated with the other side.
You can get a taste of that in a recent New York Times/Siena poll. Among those surveyed, 51 per cent say that their personal financial situation is excellent or good – but only 26 per cent say the same about U.S. economic conditions. Just 17 per cent say their financial situation is poor, but 51 per cent say that overall economic conditions are poor.
Among voters who identify as Democrats, 27 per cent say that economic conditions are poor. But the figure among Republicans is 72 per cent.
Independent voters – the key to election victory – are vibing more in tune with Republicans. Fifty-two per cent of independents say the economy is poor, and 67 per cent say the economy is worse than four years ago.
Which brings me to the final explanation for what’s dogging Mr. Biden and the Democrats: cultural estrangement.
Or to rework Bill Clinton’s famous election slogan: Maybe it’s not the economy, stupid.
Democrats were once the party of the working class, while Republicans captured highly educated white voters. The parties have since flipped.
Mr. Biden, whose political identity was formed in that earlier era, still wants to be the president of blue-collar America. Unlike much of his party, his impulses are pre-woke. And his policies are focused on the working class – everything from subsidies for manufacturing to a campaign budget that promises higher taxes on business and the wealthy to pay for such things as better health-insurance subsidies, a poverty-reducing benefit for families modelled on a successful Trudeau government program, and a middle-class tax cut.
But blue-collar voters increasingly see the Democrats as the party of educated progressives. In the Times/Siena poll, Mr. Trump is 33 percentage points ahead of Mr. Biden among white voters without a college degree. Mr. Biden remains ahead among non-white voters without a degree, but by a mere six points.
The poll also has Mr. Trump winning the Hispanic vote, a group Democrats used to think of as immutably in their camp.
Mr. Biden gave an energetic State of the Union speech, but much of the electorate is having trouble hearing what he’s saying. He’s coming across like the Charlie Brown teacher’s talking trombone sound. His economic message is being drowned out by his own party’s cultural noise. More on that in my next column.
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.
