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Defying the Odds

Defying the Odds
New book about the 2016 election.

Thursday, July 3, 2014

Economic Statistics and Economic Perception

Jim Kuhnhenn writes at AP that politicians are hesitant to play up the declining unemployment rate.  For one thing, labor force participation is low.
Moreover, hiring has tended to be predominantly in low-wage jobs, leading to stagnant wage growth, and the number of hours worked per week has not changed. Gains in paychecks are small enough that they can be wiped out by inflation. "The headline number masks the lingering structural weakness in the U.S. labor market," said Lindsey Piegza, a chief economist at the Sterne Agee brokerage house.
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More important, beyond those statistics, are public perceptions of the economy.
An Associated Press-GfK poll in May, found that the share of those surveyed who called the economy "good" stood at 34 percent, while 65 percent described it as poor. That's about the same as it has been all year, though slightly above where it was during the partial government shutdown in October. Few expected improvement in the economy over the next 12 months, and more expected it to get.
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"In the voting booth, economic perception beats economic statistics every time," said Republican pollster Whit Ayres.
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"It takes a long time for economic statistics to be felt in people's pocketbooks," Ayres said. "It may be too late at this point to affect the political environment of the midterm elections.
What's more, neither side has an incentive to tout much progress.
"For Republicans, the reality is that they are not going to want to give credit for anything that Obama should be credited for," said Ken Warren, a political scientist and pollster at St. Louis University. "As for Democrats, when the public feels some way in the polls and it's not going to play well, even the Democrats in this case would see a down side.
"To contradict what the people think can be perceived as liability."