As Kamala Harris and Donald Trump gear up for election day, one factor could decide the race. To quote the legendary political strategist James Carville: “It's the economy, stupid.”
What happened: Resilient consumer and government spending propelled U.S. GDP growth to 2.8% last quarter. While that’s slightly lower than analyst projections, it’s still solid and should be enough to quash any lingering fears about a recession.
- According to The Economist, U.S. productivity, as measured by the economic output of every person, is now about 30% higher than in both Canada and western Europe.
Why it matters: Many Americans don’t feel like the economy is thriving, making it the top issue for voters heading into November 5. This GDP report, the last before the presidential election, will give each side one last chance to push narratives about the state of things.
- A Guardian-commissioned poll last month found that 61% of Americans wrongly believed inflation was increasing, while 49% thought that the U.S. economy was in a recession.
Big picture: In theory, growth numbers bode well for Harris, who is running on economic continuity with President Joe Biden. But voters who haven’t felt any tangible benefits could be lured by Trump’s promises to boost energy output, implement tariffs, and cut taxes.—QH