Over half of Americans are entering the final stretches of the 2024 election season feeling very pessimistic about the economy. If trends largely hold from the past 30+ years, this spells trouble for the incumbent administration.

Gallup just released findings from a new poll tracking Americans’ perceptions about their financial outlooks, the most important issues facing them, and the job market. The results align with other economic readings, signaling strong pessimism over the economy and personal finances.

Most importantly, these issues will undoubtedly be drivers for Americans as they choose the leadership of this nation for the next four years.

The Toplines:

  • 52% of Americans say they and their family are worse off today than they were four years ago, versus 39% who say they are better off (and 8% are about the same).
  • Three out of four Democrats (72%) view themselves as better off compared to a third of independents (35%), or a paltry 7% of Republicans.
  • 46% of Americans describe current economic conditions as “poor,” 29% as “only fair,” and 25% as “excellent” or “good.” 
  • Nearly two out of three (62%) say the economy is “getting worse,” compared with 32% who view the economy as “getting better.”
  • During the past three years, Americans have named inflation as the most important financial problem facing their family. 

The economy, not surprisingly, ranks as the most important issue for Americans. A plurality (43%) named one or more economic issues as the most important problem facing America. While a majority now say they are worse off, this is nearly a reversal from 2020 when 55% of Americans said they were better off compared to 33% saying they were worse off.

Gallup’s monthly Economic Confidence Index (ECI), which measures Americans’ perceptions of whether they are better off, finds that currently, the ECI reads -26—one of the worst election-year readings since the measure has been tracked.

Interestingly, 2020 deviated from the pattern of positive perception of the economy serving the incumbent well. The coronavirus pandemic outpaced a positive economy as the most pressing issue, and President Trump lost his re-election bid. 

What this means

Bill Clinton’s advisor, James Carville, coined the phrase “it’s the economy stupid” in 1992 to explain the most important factor for Americans.

Prior to that, in 1980, during a presidential debate against then-incumbent President Jimmy Carter, Ronald Reagan famously asked, “Are you better off than you were four years ago?”

Both Regan and Clinton went on to beat the incumbents because economic issues—unemployment, slow growth, or high prices—were of top concern for Americans. Today, we have similar economic situations.

Even though inflation is not as rapid as in 2022, Americans are still struggling with high prices and an unaffordability crisis that places homeownership and a comfortable middle-class lifestyle out of reach.

Massive, excessive federal spending in 2021 triggered inflation to skyrocket to a four-decade-high 9.1%. Inflation rates have doubled, tripled, or worse on individual items from meat to to cars to housing. The Biden-Harris Administration instituted an agenda that funded massive spending as the economy reopened to the opposition of economists on the right and left. President Biden and Vice President Harris also pursued a business-stifling regulatory agenda that increased the costs of doing business on firms of all sizes. Increased prices on raw materials, final goods, services, and labor fed into the prices consumers still pay.

Bottom Line

Prices have not receded back to their early 2021 levels. Wages have not risen fast enough to create a buffer for families. With savings spent down and credit card debt at a new high of over $1.3 trillion, Americans are understandably frustrated. If history holds true, they will not trust the incumbent administration to turn the economy around.