Today, we invite you to take part in FiveThirtyEight’s politics discussion. The following dialogue has been edited for clarity.

Nathaniel Rakich, senior elections analyst: For an extended period, the economy has been perceived as a significant hurdle for President Biden in his campaign for re-election. In 2021 and 2022, inflation hit record highs, peaking at 9.1 percent in June. That same month, the average price of gas crossed the $5 per gallon mark. The gross domestic product also experienced a 0.6 percent decline in the second quarter of 2022. Consequently, a mere 28 percent of Americans expressed approval of Biden’s handling of the economy in a July 2022 Quinnipiac University poll.

However, the economic indicators have been showing signs of improvement in recent months, and Biden has started outlining how his economic strategies are yielding results. Nonetheless, the public’s perception of his economic management does not seem to be shifting. (The latest Quinnipiac poll put his approval rating on the economy at 36 percent.) In today’s FiveThirtyEight discussion, we aim to understand why this is the case, and explore whether Biden can turn the economy into a strength in the upcoming election.

Firstly, let’s set the stage: What is the current state of the economy according to the latest indicators?

Amelia Thomson-DeVeaux, senior reporter: Despite fears of a looming recession for over a year now, the economy is showing resilience. Real wages are growing faster than inflation, the labor market remains robust for workers, and consumer spending is at a healthy level.

Monica Potts, senior politics reporter: Amelia’s analysis is spot on. The job market continues to thrive with an unemployment rate of 3.8 percent and rising wages. Inflation, currently just above 3 percent, is also finally stabilizing. The Federal Reserve seems to be successfully managing the delicate balance between curbing inflation and preventing high unemployment rates.

There are other positive signs as well. For instance, the Inflation Reduction Act has spurred investment in manufacturing, a fact that the White House has been keen to highlight.

Amelia Thomson-DeVeaux: In many ways, it appears that the economy is gradually returning to its pre-pandemic state, albeit with conditions that favor workers more. The so-called “soft landing” seems increasingly likely.

However, predictions of economic recession by economists are often unreliable. (This is a well-established refrain at FiveThirtyEight.) Economic conditions can shift unpredictably. For instance, as Monica recently noted, student loan repayments are set to recommence soon, which may impact consumer spending. Despite these uncertainties, the current situation is more promising than many predicted a few months ago.

G. Elliott Morris, editorial director of data analytics: That’s accurate. Some gloomy predictions of a recession were never really credible, but overall economic expectations are more positive than they were a year or six months ago. However, there are some concerning indicators. Mortgage and interest rates are on the rise, and the personal savings rate is nearing an all-time low. This aspect of “the economy” differs from, say, annual wage growth, but it’s still crucial.

Amelia Thomson-DeVeaux: Indeed, Elliott. It’s also uncertain whether the Fed has finished with rate hikes. Much will depend on the August 2023 inflation data, which is due later this week.

Monica Potts: Yes, and this highlights a significant and persistent issue when asking voters about their views on “the economy.” The term can mean different things to different people. Does it refer to their income, or their expenditure on necessities such as housing and food? Does it relate to their ability to afford childcare? There is considerable variation in how people perceive the economy, and the federal government can influence these factors in numerous ways.

Amelia Thomson-DeVeaux: Another point to consider is whether consumer spending will start to decline, a possibility as people deplete their pandemic savings. However, other indicators suggest that Americans are generally comfortable with their financial situation. A recent Ipsos poll found that a greater percentage of Americans (54 percent) believe they have enough money to cover unexpected expenses compared to last year (40 percent). Fewer people also report that they don’t have enough money to spend on their wants after paying their bills.

Nathaniel Rakich: And yet, despite these positive indicators, Biden is struggling to convince voters that his economic strategies, or “Bidenomics,” are working. Why is this the case?

Monica Potts: Biden inherited an unusual economy. The COVID-19 shutdowns led to a severe and sudden recession, but then the economy began to rebound. However, people’s behavior had also shifted. More people were working from home and relocating, they had money to spend, and supply chains were slow to restart. Thus, Americans were generally pessimistic about the economy from the moment he took office.

The recovery was hampered by high inflation, as you noted earlier, Nathaniel. Much of what the Biden administration has done regarding economic policy consists of slow, behind-the-scenes actions that voters don’t necessarily notice. Despite inflation cooling, prices remain significantly higher than pre-pandemic levels; borrowers are still facing higher interest rates and so on. Therefore, I believe the general discontent with the new normal we find ourselves in is a significant factor.

G. Elliott Morris: Monica’s last point is noteworthy. The percentage of people telling pollsters that the broader economic situation is poor remains around the highest it’s been since 2018. This seems at odds with the positive economic indicators we discussed. But I think it’s possible that people have longer-term memories of economic growth and recall a time when prices were considerably lower.

Many discussions on this topic are based on tracking the annual change in consumer price index or the job market. But if you take a longer view, many families are facing permanently higher prices. Even if their wages have increased, I doubt they enjoy spending 15 percent more at the grocery store than they did before the pandemic. And these memories will take time to fade.

Of course, this is just my theory.

Amelia Thomson-DeVeaux: Some people do believe that the economy is improving. Civiqs’s tracking poll shows that Democrats, in particular, are more likely to say that the current condition of the economy is fairly or very good (63 percent) than they were a year ago (53 percent). But that’s not exactly the question you’re asking, Nathaniel. It’s not just about whether people think the economy is getting better, it’s about whether people are noticing an improvement and attributing it to Biden’s efforts. And there, it doesn’t seem like Biden is getting much of a boost. According to a recent Wall Street Journal poll, for example, the percentage of registered voters who say they approve of the way Biden is handling the economy hasn’t significantly changed since April.

Which brings me to my theory about what’s happening. I’m not sure voters were ever going to credit Biden for an improving economy, especially because the inflation increase occurred during his term. He can’t simply point to the mess left by his predecessor.

But that doesn’t mean this isn’t good news for him, because the alternative — a worsening economy — could seriously damage his prospects.

Nathaniel Rakich: That’s an intriguing perspective, Amelia. So, you believe that the stigma of the poor economy from a year or two ago is permanent for Biden? Even if he fixes it, he can never shake it off?

Amelia Thomson-DeVeaux: I wouldn’t say it’s permanent, but as Elliott said, prices are still high. Americans are increasingly convinced that these high prices are here to stay. Therefore, the fact that people are starting to adjust to these higher prices and say the economy is improving could be an indication that Biden is avoiding a major pitfall. So, it depends on how you look at it. On the one hand, people aren’t giving Biden credit, which is unfortunate for him. But on the other, it looks increasingly likely that we might have a relatively normal economy heading into 2024, which could be seen as a significant victory given the economic volatility we’ve experienced since the start of the pandemic.

Monica Potts: I don’t think prices will decrease, but people might just get used to them. So, they could hurt Biden less, as Amelia said. This could allow other issues that voters care about to gain prominence.

Nathaniel Rakich: However, how much does getting that victory really matter politically? Historically, what has been the correlation between the state of the economy and the chances of a president being re-elected?

Amelia Thomson-DeVeaux: Biden would certainly like for “Bidenomics” to be featured in high school history textbooks. But what he really wants is to win re-election, and that is much less likely to happen if people believe the economy is deteriorating.

G. Elliott Morris: Historically, we know that actual economic conditions are strongly correlated with the outcomes of presidential elections. If the state of the economy is broadly positive compared to a year or two ago, then the incumbent party tends to benefit. Of course, economic indicators do not fully predict the outcomes of elections, but they do have a residual impact.

The good news for Biden in this regard is twofold: First, voters tend to begin making these retrospective evaluations closer to the election. And second, they only look a couple of years into the past. That means there is time for things to get even better for him, and for him to reap the benefits.

The bad news for Biden, though, is that there’s still time for things to turn against him!