'Hey, everyone, I'm David Chalian, CNN's political director. And welcome to the CNN Political Briefing. For months now, we've been in the midst of a vibe-cession. Yes, that's a real term economists have coined to describe the general feeling Americans have when it comes to the current state of the economy.

'Welcome to my series Surviving the vibe-cession. I think we all know we're living in really expensive times...

Even if you got a job, you struggling. With a job, and joining my friends and people are looking for second jobs...

Things I had to give up because I can no longer afford them: getting my hair dyed literally at all. Highlights? Forget about it.

$16. $16 for a burger, a large fry and a drink. It's just crazy...

But how is the U.S. economy doing? It really depends on who you ask. Republicans are hammering President Biden over inflation rates, while Democrats point to low jobless rates and strong wage growth. How will views of our economy affect both Biden and Trump's reelection efforts? Elizabeth Buchwald is an economics reporter for CNN business. She joins us now to help us sort through perception versus reality. So, Elizabeth, I'd like to start just getting your overall assessment of the economy right now, because we know consistently, voters say it's the most important issue. Inflation specifically, obviously, is on the minds of voters. And I, I am trying to think of a time where economic data and economic perception have been more divergent than it seems right now. I mean, it just seems like there are potentially lots of positive indicators about the economy. And yet Americans are consistently showing up in surveys saying they're not feeling it. So if we could put the perceptions to the side for a moment, and I don't mean to go deep on every indicator, but I just as you report out on the state of the American economy, what what do experts and economists tell you is the state of the American economy?

'In short, the economy is mixed right now. So there are a lot of things that look really good on paper. And one of the the best things going for the economy right now is the strength of the labor market, extremely robust, tons of job openings, more than we even had before the pandemic, and the lowest unemployment rate for the period of time that it's been under 4% - it's the lowest it's been since the early 1960s. But there are some red flags in the economy right now, too. And one of the biggest ones there is with credit card debt that's been soaring for some time now. And now we're seeing that a record number of Gen Z Americans are maxing out on their credit cards. That means that they can't even use their credit card to support their spending anymore, because lenders are saying, hey, you've used all that up.

So I guess as you report things out, do you have a sense from economic experts that you talk to about which of these data points they put more weight on than others? So I get the mixed picture and, you know, you can find stuff that isn't going so well and stuff that is going really well. You just took us through some of that. But how do we how do we piece that together? Or how do the experts you talk to, you piece that together to determine their assessment about sort of the strength of the American economy, or how they put that all together to come up with some projections of where the American economy is going.

Yeah, it's not an easy task when you have such diverging trends happening all at once. And one economist that I recently spoke to was telling me that he doesn't look at this is just one economy, even though it is actually, in fact, that at the end of the day, he sees it as multiple different things. So while on the whole things are fairly good compared to different periods in time. But if you are a young American, if you are a low income American, the economy's really bad for you right now. You are a lifelong renter. You are seeing that your your cost of living is really evading some of your wage gains, even though again, on the whole, wages are rising faster than inflation. But for other people that especially on the lower income spectrum, that that hits even harder food costs are really gone up and especially housing costs. But putting it all together is is a difficult task for anyone. And I think that's why the macro indicators such as the jobs report and GDP, those catch a lot of attention because they are supposed to, in effect, do that. But it's the nuances that I think matter a lot to these economists when they're saying, okay, well, what's the next GDP report going to look like? And what's the economy going to look like ten years out?

'And I think to your point, not just to economists, I think the nuance is what matters so much to how Americans are feeling the real economy in their day to day lives. Because, you know, I there was a point at which my expertise is not covering the economy. I cover politics, obviously, but there was a point in which some gangbusters jobs number or the kind of protracted period of low unemployment that you talked about, that would just be an automatic political win for whichever president was in office at that time. And that just isn't the case anymore. Clearly, despite those numbers perceptions of Biden's handling of the economy, it's like one of his worst issues. And it's part of why his overall approval rating is stubbornly low. And so I want to zero in with you on inflation specifically, where are we on the inflation journey of these last couple of years at this moment in time? And you mentioned housing and food prices specifically, should listeners expect that this is just the new reality, that things cost more as time marches on and there's not some return to pre-COVID prices?

'Yeah. So David, those are all really good questions. I'll start off by just explaining that inflation is actually a good thing. The Federal Reserve targets 2% inflation. And to put that in perspective, you want prices to grow in an economy because the opposite of that deflation, falling prices is a much worse effect. Which sounds crazy. Who wouldn't want things to get cheaper. But when people expect prices to come down, they're going to put off purchases. When people put off purchases. That's a lot of spending that isn't happening in the economy. And of course, that then leads to layoffs. So you want a little bit of inflation, but you don't want is what we had in 2021, 2022 and the past couple of years for that matter of high inflation. So what's been happening since it peaked in 2022? June of 22 is inflation has been cooling a lot. That's the rate of price increases. But what that isn't is the actual prices that we're paying in stores. Those are still going up. And in effect, we don't want them to go back to the pre-pandemic levels. But one of the reasons why voters are so upset, even as inflation has cooled again, is that those prices that we're paying are so much more expensive.

Should there be any expectation that there's some kind of either policy that a president can enact or that Congress can enact that would drive prices down or no, this is just the reality. This is sort of the new baseline. That's what I'm trying to understand.

It is the reality that prices are more expensive and will be more expensive. And inflation wasn't catching a lot of attention before the pandemic because it was pretty much really low. And yeah, things would go up a little bit, but it wasn't enough to make you post about your receipts on Twitter or just it wasn't a dinnertime conversation the way it is right now. And because it has really become such a dinner conversation, I think that's what's gotten politicians more involved in saying, hey, yeah, everyone's annoyed. What can we do here? And we're seeing a lot of legislation involved on price gouging and whether that's actually causing inflation. The studies don't really add up there, but it looks good to at least say, hey, we're going after those corporations that are responsible for making your grocery bills more expensive.

We're going to take a quick break. We're going to have a lot more with CNN business reporter Elizabeth Buchwald in just a moment. Welcome back. We're here with CNN business reporter Elisabeth Buchwald. We're talking public perception versus economic reality as it relates to the U.S. economy and what impact all of this could have, of course, on the presidential election. Elisabeth, how much control does a president have? How many levers do they have to pull to bring down inflation?

It's a good question. They have limited levers, actually, I would say. I mean, there are executive orders they could do. And Biden is trying to clamp down on price gouging. And he's trying to, through the Inflation Reduction Act, usher in more changes that, according to him, would would cause prices to come down. Really, it rests with the Federal Reserve and in my view, and it's a relatively blunt instrument. They have they just raise and lower interest rates when they want inflation to come down. They raise interest rates, which makes it more expensive for us to get loans, which in effect is supposed to cause people to stop spending. And as they've taken interest rates to the highest level in over two decades, that has happened to an extent that they want it to happen even more so. I do think if we didn't have those interest rate increases and just had, say, Biden working on plans to lower prices, I don't think we would have seen inflation cool as much as it has.

So if inflation is the story of the Biden economy under his administration, which I'm sure he would not like, that fact that I just said that. But if that's the big sort of narrative of the economic narrative around Biden's administration, we're in this rare position of a rematch here and a former president, running against a president. What was the economic narrative of the Trump years while he was in the white House?

Well, people were very the big talking point during the Trump administration was the trade war. People were very annoyed about jobs going to other countries, and they wanted to bring manufacturing back home. That was a trend that was happening prior to the Trump administration. But that was something that he really said, yeah, I'm going to get voters more in tune with this. But it's interesting, though, with the Trump administration, you also had a period of low unemployment, at least before the pandemic happened. You did see more stagnant wage growth. That was something that was a sticking point to some people. But there were points during his administration where things also looked really, really good on paper.

Yeah, I mean, he was certainly selling a strong economy, and it looked like the American people were buying it until the pandemic hit and just completely decimated the economy. If for some period of time. And unfortunately, from his perspective, I'm sure that period of time was during his reelection campaign. And so I'm sure that had some real impact for voters, no doubt. But is there something that sort of like Trump's economic vision versus Biden's economic vision that you see sort of playing out in this current presidential election in the way they are presenting that vision to the American people?

I mean, the two obviously are completely polar opposites when it comes to spending and when it comes to taxes. So obviously, Trump wants to lower taxes for more wealthy Americans. Biden wants to do exactly the opposite. And I think you could make a case in either direction for why it would be good to lower taxes for the wealthy, and why it would be good to raise it. On the first point, I think you can make the case that, yeah, it trickles down and Biden is very anti trickle down economics. He always says I want to give it back to the lower income Americans. And you know he doesn't want it first going to the wealthy. But you could make a case that yeah, if businesses have more money to spend, that's going to allow them to hire more people. And that sort of played out during the Trump administration with Biden. And I think this has become a sticking point for a lot of voters, too, is, a lot of spending is happening at the expense of their pocketbooks. And that's not exactly what they want to see. And there's a question of when will it end? And people also aren't buying the whole, oh, I'm not going to raise taxes for people who don't make more than $400,000 a year, and at the same time, $400,000 a year is not what it used to be. There's tons of stories and anecdotes from people who are making $400,000 a year and still suffering, or still struggling to pay certain bills.

The other big economic challenge that Biden faced during his term was this whole notion of, you know, building back, you mentioned all the spending and trying to recover at. The outset of the Biden administration from the pandemic. And as you discussed, inflation takes off. Fed comes in deals with interest rates. And there was this whole notion of will the economy go into recession, or will Biden be able to stick this soft landing. And it seems. Correct me if I'm wrong, that the Biden administration stuck the soft landing, despite protestations from the likes of Larry Summers. Or no, is the jury's still out?

I would say the jury's still out it. If you hear any Federal Reserve official and I tune into these people just about constantly listening to what they're saying on the economy, not just Fed Chair Powell, but there's a whole lot of regional fed presidents. And when they're asked, did we achieve that soft landing? They will never answer that. They don't want to declare victory, because what happened with interest rates is there's not. When the fed raises interest rates, there's not this immediate effect. It actually takes roughly a year for the effect of interest rate increases to be felt throughout the economy. Some studies say even longer. So what that means, and even though the fed hasn't raised interest rates recently, it could make its way to the economy in ways that we didn't expect. And you can't just look at the fact that interest rates are at the highest level in 22 years and say, that's not going to hurt some Americans for now. It hasn't hurt the greater economy to a large extent. And it has surprised a lot of economists that we didn't have a recession up until now, and that the unemployment rate has really stayed quite low. But I would very much say the jury's still out on that.

Two final questions for you. One, we haven't talked about the stock market. And I if you could just help us understand when we see headlines of record breaking stock market results and everything, you and I were just talking about what people are feeling, where where is the intersection of the markets versus the public perception.

It's interesting because Trump, as a president, wanted to take credit for every single time the Dow or another index would achieve a record. And Biden, throughout a lot of his presidency, pushed that aside. He said, I you know, the stock market doesn't indicate the economy. But then we saw last week when the Dow touched 40,000 for the first time. Oh, he was taking credit for that. All right. I do agree with the fact that the stock market isn't the economy. A lot of it is actually just programed trades that happen, which is why you see these really, really snap reactions to if a fed official says, yeah, I'm thinking, you know, two interest rate cuts this year, but it's these snap reactions. Again, it's it's not what's actually going on in the economy. And it doesn't even connect to if you look at consumer sentiment surveys, which is supposed to gauge how Americans are feeling about the economy in a certain point in time, even when the stock market's up, you don't see this direct correlation between they're feeling better.

And are Americans feeling better about the economy now than they were in more recent times when the inflation rate was even higher? Or no, we don't see an easing of concern in those surveys.

No consumer sentiment actually dropped quite a bit in the last reading. Went down to the lowest level in November. And it's interesting because during that period there was a bit of a spike in the inflation rate, and that happened as gas prices were increasing. So that's again something that is a pocketbook issue, dinner time conversation. And it's no surprise that people would feel worse about the economy when gas prices are up. And that takes up such a big chunk of people's budgets.

And so is my big takeaway from this conversation with you. Correct me if I'm wrong, is that if prices remain high, Americans are not going to feel better about the economy.

That's correct. One thing I would also add to that, though, is the deferred housing dream that's happening right now. People aren't able to get a first time home purchase because it's just gotten so expensive, and they're pushing that off indefinitely. So that again, gets back to it. But there was this notion that those prices were actually going to come down. But yeah, I do think that as long as prices are higher, people are going to be more annoyed, but it's more that they've been. I'm not saying this too well. I think it's more that the price increases were so large in past recent years that people are less forgiving for any price increase right now.

And we know and again, history is only a guide for as long as it repeats itself, which in American politics has not been that often of late, but that economic perceptions tend to settle around as spring turns. To summer, in terms of how people vote in November. You know, there are lots of examples in American political history of economic indicators improving, but people not feeling that yet. George H.W. Bush is one that comes to mind in 1992, and we are at a critical moment for Joe Biden right now, given the complex mixed bag of assessment you just provided. This is a huge potential problem for Biden, as he is seeking reelection to not have as clear a positive picture on the economy at around this time in in the election year. It will be fascinating to watch this play out. Elizabeth, thank you so much for joining us. Really appreciate it.

Thanks for having me.

'That's it for this week's edition of the CNN Political Briefing. And we want to hear from you. Is there a question you'd like answered about this election cycle? Is there a guest you really want to hear from? Give us a call at (301) 842-8338, or send us an email at CNN Political Briefing at gmail.com. And you might just be featured on a future episode of the podcast. So don't forget to tell us your name, where you're from, how we can reach you, and if you give us permission to use the recording on the podcast. CNN Political Briefing is a production of CNN audio. This episode was produced by Grace Walker. Our senior producer is Haley Thomas. Dan Dzula is our technical director, and Steve Lickteig is executive producer of CNN. Audio support from Alex Manesseri, Robert Mathers, John Dionora, Leni Steinhart, Jamus Andrest, Nicole Pesaru and Lisa Namerow. And special thanks to Katie Hinman. We'll be back with a new episode on Friday, May 31st. Thanks so much for listening.