By most standard measures, the American economy is going gangbusters. GDP grew at a nearly 5% annualized pace in the third quarter, the best since late 2021. Unemployment sits at just 3.9%. Inflation, which had peaked at a 7.5% annual rate in January 2022, has fallen to 3.2%. Joe Biden can trumpet the fact that just under 14 million jobs have been created since he took office, a record for an American president. Over the comparable period in Donald Trump’s term — before the Covid-19 pandemic — fewer than 6 million jobs were created.
And people are certainly acting like the economy is good: Consumer spending is strong, and Americans are starting new businesses at the highest rates since the Census Bureau began tracking this data in 2006.Yet when pollsters ask people how they think the economy is doing, they don’t just express concern. They say the economy is terrible.
It’s hard to know whether Republicans actually believe this.
Every day, more ink is spilled exploring this “disconnect,” this “mystery,” this “puzzle.” Many of the factors analysts suggest as they try to explain are perfectly reasonable, and probably contribute to dim views of the economy. But most of the time, the most obvious and important explanation is overlooked: The polling data doesn’t show that Americans think the economy stinks so much as it shows that Republicans say it stinks.
It’s hard to know whether Republicans actually believe this. But it’s beyond doubt that partisanship plays a key role in what people tell pollsters about the economy.
Some partisanship has always existed in polling about the economy: When there’s a Democrat in the White House, Democrats are more likely to say the economy is good than Republicans, and both sides change their opinions when the White House changes hands. But this difference has grown in recent years — and grown unequally. A pair of economists who examined decades of polling data concluded, “While both Republicans and Democrats view the economy more favorably when their party controls the White House, the magnitude of this partisan bias is roughly two and a half times larger for Republicans than for Democrats.”
We can see how that is playing out right now. In the latest edition of the University of Michigan’s Index of Consumer Sentiment, the average Democratic score is over twice as high as the Republican score. But what is most striking is just how awful Republicans say the economy is. Their index score for this month is significantly lower than the score they gave the economy in the depths of the Great Recession in 2008 and 2009, when the economy was bleeding hundreds of thousands of jobs every month.
Yes, last year’s high inflation rates likely have lingering effects that go some way toward explaining the country’s supposedly sour mood. And there are certainly many reasons a particular person might feel bad about the economy even if, in relative terms, it’s doing much better than it was a few years ago. We have high inequality in America, high health care costs, unaffordable housing in many places and enormous student debt. Thanks to a long campaign to destroy collective bargaining, 9 in 10 workers lack union representation.
There’s evidence to suggest that Americans have a rosier view of the economy the more personal their experience gets.
But those are not recent developments; they were decades in the making and have persisted through Republican and Democratic presidencies. It’s absurd for anyone to honestly say that because a box of Frosted Flakes costs a buck or two more than it did a few years ago, that means the economy is worse than it was during the greatest economic crisis of our lifetimes. If someone says the economy of today is particularly bad — worse, even, than the Great Recession — then either they’re deluded or they’re lying.
The response to this kind of argument is usually that we should not question the inherent truth of Americans’ lived experiences. Bandy about your economic statistics all you want, you snooty elitist; what matters is what people really feel, and you won’t convince them things are great by denying what they’re telling you about their own lives. But there’s evidence to suggest that Americans have a rosier view of the economy the more personal their experience gets. As already noted, Americans aren’t shying away from spending or starting businesses — two things that are usually less common if people feel their economic situation is precarious. And a recent Bloomberg/Morning Consult poll of swing state voters, for example, found that while just 26% think the American economy is on the right track, that number nearly doubles — to 49% — when they’re asked about their city or town.
When you break poll results on the economy out by party identification, you see how eager Republicans are to say the economy is terrible. For instance, in the latest Economist/YouGov poll, a full 75% of Republicans said the economy is “getting worse,” an assertion that is false by almost every conceivable measure.
It isn’t hard to figure out why. The conservative media and the associated echo chamber is relentless in its insistence that with a Democrat in the White House, America is a land of unending misery and despair. And with the country as polarized as it is, even Republicans who don’t spend their evenings watching Fox News will be loath to say anything that might reflect well on Joe Biden. Telling a pollster “The economy is terrible!” isn’t much different than saying the same thing on X or Truth Social, a handy way to give Biden the finger if you’re so inclined.
That isn’t to say we should throw every poll about the economy in the trash. But it does mean that every report about Americans’ perceptions ought to include an extended discussion of how those perceptions are shaped by partisanship. It’s not the whole story, but you can’t tell the story without it.
OTTAWA – Statistics Canada says retail sales rose 0.4 per cent to $66.6 billion in August, helped by higher new car sales.
The agency says sales were up in four of nine subsectors as sales at motor vehicle and parts dealers rose 3.5 per cent, boosted by a 4.3 per cent increase at new car dealers and a 2.1 per cent gain at used car dealers.
Core retail sales — which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers — fell 0.4 per cent in August.
Sales at food and beverage retailers dropped 1.5 per cent, while furniture, home furnishings, electronics and appliances retailers fell 1.4 per cent.
In volume terms, retail sales increased 0.7 per cent in August.
Looking ahead, Statistics Canada says its advance estimate of retail sales for September points to a gain of 0.4 per cent for the month, though it cautioned the figure would be revised.
This report by The Canadian Press was first published Oct. 25, 2024.
OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.
Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.
The change is scheduled to come into force on Nov. 8.
As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.
The program has also come under fire for allegations of mistreatment of workers.
A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.
In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.
The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.
According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.
The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.
Temporary foreign workers in the agriculture sector are not affected by past rule changes.
This report by The Canadian Press was first published Oct. 21, 2024.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
