Business

Yellen sees ‘disconnect’ between economy’s performance, Biden polling

by Nick Robertson - 09/19/23 12:13 PM ET

U.S. Treasury Secretary Janet Yellen attends a session at the Global Climate Finance summit, Thursday, June 22, 2023 in Paris. World leaders, heads of international organizations and activists are gathering in Paris for a two-day summit aimed at seeking better responses to tackle poverty and climate change issues by reshaping the global financial system. (AP Photo/Christophe Ena)

Treasury Secretary Janet Yellen said she sees a “disconnect” between the good health of the U.S. economy and polling numbers that show many Americans fear a recession.

“I agree with you that there’s a disconnect, and I don’t have a simple and convincing answer, but Americans have been through a lot,” Yellen said in an MSNBC interview Tuesday.

A poll earlier this month found that 58 percent of Americans believe President Biden’s policies are making the economy worse. A separate poll found that more people trust former President Trump on economic issues than Biden.

Those results come as fears of a recession subside, inflation falls and unemployment remains low. The jobless rate was 3.8 percent in August — just 0.3 percentage points above its pre-pandemic level — and inflation has fallen to an annual rate of 3.7 percent last month from a peak of 9.1 percent in June 2022, according to the Labor Department.

“The U.S. is enjoying slower growth than during the [pandemic] recovery phase but remarkable job creation, strong consumer spending and that even with inflation coming down, I think we’re on a path to what you might call a soft landing,” Yellen said.

Yellen said many of those concerns don’t tend to align with people’s views of their financial well-being.

“Interestingly, when Americans are asked about their own personal economic situation, they’re positive on that,” she said. “The negative results you cite mainly reflect their answers to ‘How is the economy more broadly doing?’”

She believes those survey results will improve, however, as Americans slowly realize the positive impacts of Biden administration legislation.

Yellen specifically cited the Bipartisan Infrastructure Law, the Inflation Reduction Act and the CHIPS and Science Act as pieces of legislation that are already having a positive impact on the economy.

The economy has been a central argument for Republicans for the upcoming 2024 elections and has been a focus of the Biden administration in recent months. Last week, the White House blamed poor perception on “MAGAnomics,” a follow-up to the president’s “Bidenomics” policy.