WASHINGTON (Reuters) – Americans’ support for President Donald Trump’s management of the economy has slipped, a new Reuters/Ipsos poll shows, challenging a bedrock re-election argument laid out at the Republican National Convention this week.
About 58% of respondents said the U.S. economy is on the wrong track in a survey taken August 19 through 25th.
And for the first time this year, Trump’s net approval on economic issues dipped into negative territory, with 47% saying they approved of his stewardship of the American economy and 48% saying they disapproved. That is down from an approval margin of 14 percentage points in late March.
While the poll shows Trump still has an edge with voters over Democratic opponent Joe Biden on the economy, the results highlight the risks the Republican Party is taking by leaning on memories of last year’s strong economy and arguing that Trump will easily be able to restore it.
“Our economic choice is very clear. Do you want economic health, prosperity, opportunity and optimism, or do you want to turn back to the dark days of stagnation, recession and pessimism?” White House economic adviser Larry Kudlow said at the convention on Tuesday night.
“Who do you trust to rebuild this economy?,” Vice President Mike Pence asked Wednesday night. “A career politician who presided over the slowest economic recovery since the Great Depression? Or a proven leader who created the greatest economy in the world?”
BOUNCE AHEAD, BUT THEN WHAT?
Looking to the fall, just as the U.S. witnessed a historic drop https://www.reuters.com/article/us-usa-economy-instant/us-second-quarter-gdp-falls-at-steepest-rate-since-great-depression-idUSKCN24V2GJ in gross domestic product from April through June, Trump will be able to trumpet a record increase – equivalent to perhaps 25% on an annualized basis – when statistics are released in October covering the July to September period.
Neither data point, products of a deliberate shutdown of the economy in March and the automatic impact of reopening from that sudden stop, say much about the economic fortunes of families and businesses during the first months of the pandemic, or in the weeks to come.
The coronavirus health crisis, with nearly 6 million infected and over 175,000 Americans dead, is still raging. The onset of the conventional flu season is on the horizon, and an experiment underway in reopening schools and colleges is already leading to new spikes in infections.
Consumer confidence, which can influence future economic activity, remains weak. The national unemployment rate at 10.2% in July is the highest in 39 years, and improvement seems to be slowing. Nearly 15 million Americans are receiving unemployment benefits, the highest on record and double the number hit during the 2007 to 2009 Great Recession.
The blow has been received hardest among groups including blacks, Hispanics and women who benefited most from last year’s record low unemployment rate. Continued support among white women in particular will be critical to Trump’s electoral chances.
TRUMP EDGE OVER BIDEN
The Reuters/Ipsos poll found most voters would not currently back Biden on the economy.
Trump’s team has been hammering Biden’s discussion of tax policies to pay for rising government debt due to the Trump administration’s earlier tax cuts.
Among registered voters, Trump still has a five-point edge over Biden in who would be better to manage the economy.
But the poll also found 30% of Republicans felt the economy was on the wrong track, the highest since February 2018 when Reuters/Ipsos started tracking the question.
The poll gathered responses from 4,428 American adults, including 1,929 Democrats, 1,750 Republicans and 430 independents. It has a credibility interval, a measure of precision, of between 2-5 percentage points.
If the economic impact of the pandemic has been in some ways less severe than feared, with household spending returning to pre-pandemic levels and Americans boosting their savings, it is only because of massive government spending and a larger federal footprint in the economy.
Both Republican and Democratic leaning economists feel much more federal help and a larger federal footprint will be needed to avoid a deeper slide this fall – steps that Trump would have to embrace even as he tries to brand Biden a “socialist.”
The lapse of $600 a week unemployment benefits, the expiration of loans for small businesses, and the lack of help for state and local governments may in short order pull the rug from economic data that has been more positive than expected since a wave of business lockdowns and social distancing measures in April.
A Census survey in July said reported “food insecurity” rose more than 20% early in the pandemic, reaching nearly 30 million.
As former Fed chair Janet Yellen and Center on Budget and Policy Priorities senior adviser Jared Bernstein said in a New York Times column, a lot more people are hungry.
Both have been briefing Biden on economic issues, and wrote that without further federal spending, “millions of needy Americans will suffer — and the overall economy could degrade from its current slow rebound in growth to no growth at all.”
(Reporting by Howard Schneider; Editing by Heather Timmons and Alistair Bell)