The economy is EVERYTHING

What a week.

But…

While markets celebrate new highs, exit polls reveal a troubling economic reality: 67% of voters view the economy as ‘not good/poor,’ with only 32% seeing it as ‘excellent/good’. This sentiment gap proved decisive in Trump's victory, particularly among key demographic groups that shifted away from the Democrats.

The most telling statistic isn't making headlines: 46% of Americans say they're worse off financially than four years ago - surpassing even the pessimism seen during the 2008 financial crisis.

This widespread economic discontent manifested across several key metrics:

• Credit card debt has hit $1.14 trillion, averaging $8,000 per person.

• Long-term unemployment is rising, with 1.6 million people jobless for over 27 weeks.

• The ‘Great Resignation’ era has officially ended, with job creation slowing to 2020 levels.

Perhaps most significantly, Trump made unprecedented gains among Hispanic voters, with 70% judging the economy as ‘poor’.

This demographic overwhelmingly prioritized economic issues, with 40% citing the economy as their primary concern. The result?

A dramatic 25-point swing in Hispanic support compared to 2020.

Despite inflation cooling to 2.4% from its 9% peak in June 2022, consumers aren't feeling relief.

The disconnect stems from a fundamental misunderstanding of how Americans experience the economy.

While economists celebrate slowing inflation, consumers face cumulative price increases of 20% since 2021, while wages only rose 17.4%.

The economic perception gap falls starkly along party lines.

Among those viewing the economy negatively, 69% were Republicans and 29% were Democrats.

However, the widespread concern about daily expenses transcended party affiliation — roughly nine in ten voters expressed worry about grocery prices, and eight in ten about medical care and gas costs.

This economic reality gap between Wall Street and Main Street typically resolves in one of two ways: either Main Street catches up, or Wall Street adjusts downward.

Historical patterns suggest the latter is more common when consumer stress reaches current levels…

The election outcome signals that voters prioritised their lived economic experience over macroeconomic indicators…

It also shows, more specifically, that inflation is a detrimental phenomenon when it comes to a party in power.

Where the Democrats had focused on other factors, battering home the perspective that ‘your economic health now is bad, we can make it better’ (but also having proved it in the previous term) is key to winning.

See the wealth increase of the bottom 50% pre-pandemic…

Trump effectively led on a campaign of reminded the poorest, especially poorer swing voters, that they were richer when he was President.

It is always the economy…

What’s ironic is that Biden likely won due to the pandemic…

A deterioration in the economy.

If you want to win an election in the US, focus on the economy.

In the UK it’s more about political football promises and hardly ever about the economy really, namely because we don’t particularly have one with any real identity.