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Paul Krugman and Peter Coy
By Paul Krugman and Peter Coy
Mr. Krugman is an opinion columnist. Coy is editor of the opinion newspaper.
Peter Coy: Paul, I think the economy is going to be a huge factor for President Biden in 2024. Voters are dissatisfied with the state of the economy, even though, by all indications, it is doing very well. Imagine how much more dissatisfied they are with what will happen if the scenario worsens in the run-up to the election, which, for my part, I think will probably be the most likely.
Paul Krugman: I’m sure of politics. We’ll come back to that later. But first, can we recognize how smart the current state of the economy is?
Peter: Absolutely. Unemployment is near its lowest point since the 1960s and inflation has dropped sharply. That’s the big story of 2023. But 2024 is something else entirely. I think there will be two big stories in 2024. First, the patience of the news and, secondly, the reaction of the electorate to the evolution of the economy at election time.
Paul: Right now many analysts, including some who were very pessimistic about inflation last year, are declaring that the soft landing has arrived. Over the past six months, the core personal consumption expenditures deflator — a mouthful, but that’s what the Federal Reserve targets — rose at an annual rate of 1.9 percent, slightly below the Fed’s 2 percent target. Unemployment is 3.7 percent. The eagle has landed.
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