On the economy – The Economist:

‘America was supposed to be in recession. When the Federal Reserve began to raise interest rates at the fastest pace since the early 1980s, few economists expected the economy to be heading into a presidential election in this state. Indeed, even a few months ago few thought things would be this good. Inflation-adjusted quarterly growth in annualised terms has averaged 2.9% since the start of 2023, above its long-term trend. On October 30th America will publish its gdp figure for this year’s third quarter. According to a usually reliable model from the Atlanta Fed, the economy probably expanded at an annualised pace of 3.3%, nearly twice as high as the median forecast in July, at the start of the quarter.
And it gets better for Kamala Harris. Not only is growth holding up well; a deceleration in inflation means that the benefits are becoming more tangible for ordinary Americans, showing up as real increases in spending power. That may be why consumers, long disgruntled about the state of the economy, are at last beginning to cheer up. By itself this will not be decisive: voters still think a Trump presidency would be better for them financially. Yet the strong economy will provide a welcome tailwind for Ms Harris in the final ten days of her presidential campaign.’

(…)

‘The “misery index”, which adds the unemployment rate and the annual inflation rate, is a straightforward way of looking at how the economy is affecting ordinary people. In September the index fell to 6.5%, its lowest since early 2020, when Donald Trump was still in the Oval Office.
Are people noticing these improvements? One of the biggest data puzzles of recent times remains as pertinent as ever: despite the economy’s strength, sentiment has been persistently glum. At the start of this year that at last seemed to be changing, with a closely watched survey, conducted by the University of Michigan, turning sharply higher. In recent months it has shifted lower again. It now appears to be the most important economic indicator working against Ms Harris.
On closer examination, however, sentiment may not be so bleak. A shift in the Michigan survey’s methodology in April, from phone to online interviews, accounts for a roughly 11% decline in the index, according to a new study by Ryan Cummings and Ernie Tedeschi, two economists who worked in Mr Biden’s White House. With the old methodology in place, the index would in fact be bouncing along near a three-year high. Meanwhile, an alternative measure of economic sentiment—an index calculated by Goldman Sachs, a bank, and based on social-media posts—is much rosier. Its upward lilt points to a clear increase in optimism in the past half year. That is a welcome development for Ms Harris. If Mr Trump wins on November 5th, it will be in spite of the state of the economy.’

Read the article here.

In spite of the economy. The Homo economicus is at best an exception.

As the German philosopher Peter Sloterdijk said: ‘People don’t have emotions, emotions have people.’