Solid Economic Data, Heavy Mood: Trump's Dilemma Ahead of Midterm Elections
Growth of 2.2%, unemployment of 4.2% and the stock market close to records contrast with the perception of high prices, according to BBC Business.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM BBC BUSINESS · 2 MIN
Donald Trump arrives at the United States midterm elections with a problem reminiscent of Joe Biden's in 2024: economic indicators are not necessarily bad, but the public mood is. According to BBC Business, the White House faces a disconnect between what the numbers show and what voters feel.
In 2024, Biden saw solid economic data fail to convince many voters that the economy worked for them. Trump, in that year's campaign, promised quick relief for rising prices. According to the BBC, the latest inflation report before the mid-term elections confirms what voters already perceive: prices remain high.
The numbers, however, are not bad. According to the BBC, economic growth continues, unemployment remains low and the American stock market is close to historic highs. GDP growing at 2.2% is considered respectable by the standards of many rich economies, and the unemployment rate stable at 4.2% does not suggest an economy in free fall.
The causes, however, are different. Biden was dealing with the consequences of the Covid pandemic. Trump faces higher energy prices, linked to the conflict between the United States, Israel and Iran, in addition to the effects of part of his trade and migration policies. For the voter, the criterion is what weighs in their pocket: price at the supermarket, gasoline and monthly bills, and not GDP or stock market records.
Trump maintains that he inherited a struggling economy from Biden and points to recent growth as proof that the situation has improved. The dispute, therefore, is about the voter's reading of the economy on the eve of the vote.
What changes for the investor
For those who invest and operate, the central point is the decoupling between indicators and perception. While the United States Stock Exchange reflects growth and employment, political pressure focuses on energy and consumer prices, variables that usually influence inflation, interest rates and market mood. If prices remain high and trade policy remains at the center of the debate, the topic tends to remain on the radar of those who monitor risk. This analysis does not recommend buying or selling assets or forecasting quotes.
Automatically translated from Portuguese.
