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America’s Economic Malaise

Though the President claims the economy is “on the move,” most Americans are concerned about the economy and grappling with high inflation.

Despite the polarization in the country, Americans feel united on one thing: the economy is the #1 issue facing the country.  People of all political affiliations, ideologies, age groups, genders, and income brackets agree.

In the latest IBD/TIPP Poll of 1,305 Americans completed in early April, over one in four picked the economy as the country’s most important issue. By party and ideology, the share that thinks it is the #1 issue:

  • 21% of Democrats,
  • 34% of Republicans,
  • 29% of Independents,
  • 28% of conservatives,
  • 29% of moderates, and
  • 21% of liberals.

The primary driver making the economy the most concerning issue is inflation.

Inflation Concerns

U.S. inflation rate leaped to 8.5% in March, the highest since 1981. Inflation worries nine in ten (88%) respondents of the survey. A majority, across-the-board, are “very concerned.”

Americans are feeling squeezed.  Over three out of five (63%) say that wages have not kept up with inflation. Only one-fourth (26%) reported that wage increases have kept up with inflation for them.

The squeeze is leading to spending cuts. Three-fourths (74%) are cutting back on household spending. Spending cuts are happening across all age and income brackets.

Consumer spending drives two-thirds of the economy. When consumers pull back their spending, it leads to an economic slowdown leading to a recession.


The National Bureau of Economic Research (NBER) determines the beginning and end of business cycles. It defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months. It is visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Two consecutive quarters of negative growth is a practical thumb rule for recession.

The last recession was short-lived; the economy entered into a recession in February 2020, and expansion began in April 2020.

Almost one-half (47%) feel we are in a recession. A majority of Republicans (61%) and conservatives (64%) share the sentiment. 43% of Independents believe we are in a recession, which does not bode well for the incumbents in the coming midterm elections in November 2022.

Deutsche Bank economists are the first to call a recession in 2023.

TechnoMetrica also believes that the prevailing glum sentiment in our data points to a recession around the corner. We have forecasted many past recessions and expansions. We use significant changes in the Economic Outlook component of the IBD/TIPP Economic Optimism Index to base our predictions. We will be refining our forecasts in the coming months.

In addition to the recession sentiment, most think the economy is not improving, including two-thirds of Independents (66%).


Inflation accompanied by a recession is stagflation. We are not in stagflation by this definition. But leading economists like Larry Kudlow refer to the current economic climate as stagflation. Given half the country believes we are in a recession, their description is appropriate.

The U.S. has not seen stagflation in the 21st century. Getting out of stagflation could be challenging.

President Biden’s Handling Of The Economy

One-third (33%) give President Biden an A or B for his handling of the economy. Only 18% of independents give him good grades. Even among Democrats, Biden has lost significant ground sliding from 82% approval in April 2021 to 62% in April 2022.

President Biden’s Rhetoric

President Biden recently celebrated the jobs report, "Our economy has gone from being on the mend to being on the move." Most Americans (52%) disagree with him. Only Democrats (67%) and liberals (66%) agree.

President Biden must stop being pollyannaish and not try to sell the idea that the economy is improving. Most Americans feel the pain of inflation. Such a narrative coming from the White House in these difficult times sounds highly insensitive.

Next, we’ll provide our no-spin discussion on gasoline prices.

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