The perception of the US economy is still highly negative, despite the country’s impressive economic results for 2023, according to Dr. Arthur Laffer, who served as a former economic advisor to President Ronald Reagan. During an interview with Fox Business, Dr. Laffer explained that there is a “huge disconnect” between the positive numbers and the American public’s views. He pointed out that people are more concerned about the total number of jobs rather than the unemployment rate, which remains low. Dr. Laffer argued that the unemployment rate does not reflect the fact that total jobs are way down.
Furthermore, Dr. Laffer highlighted that people are more concerned about prices rather than inflation rates, which have decreased considerably. Despite this decrease, prices have not followed suit, which is frustrating people and contributing to their negative views of the economy. According to Dr. Laffer, GDP growth for the last quarter was almost 5%, which is quite impressive, but still considered low. He argued that GDP has not kept pace with the progress made after the departure of former President Trump.
Despite the White House’s claims that “Bidenomics” can boost job creation, reduce inflation and increase growth, surveys show that Americans remain dissatisfied with the economy. According to a November Gallup poll, 50% of respondents rated the economy as “poor,” while only 2% rated it as “excellent.” This public mood is significant, given that the unemployment rate remained below 4% last year, and inflation has slowed from four-decade highs, partly thanks to the Federal Reserve’s aggressive interest-rate hikes.
The US economy did have strong results last year. According to the Commerce Department, the US economy grew at its fastest pace in two years over the third quarter, with GDP rising by 4.9%, exceeding expectations. However, the American public still remains unconvinced.
As Dr. Laffer pointed out, people are more interested in the total number of jobs than the unemployment rate. The decline in jobs is a significant concern that contributes to people’s dissatisfaction. According to the latest figures from the Labor Department, job growth in December 2023 was sluggish, with just 199,000 jobs added, well below the expected number of 422,000.
Another factor contributing to public dissatisfaction is that prices have remained stubbornly high, despite the Federal Reserve’s attempts to control inflation. A key metric for measuring prices is the Consumer Price Index (CPI), which measures the cost of goods and services. According to the Bureau of Labor Statistics, the CPI increased by 0.5% in November and 0.6% in October 2023, indicating that price pressures have persisted, even during a period of lower inflation rates.
