Trump's lead over Biden on the economy has vanished

"People are still worried about evictions, foreclosures and small businesses going under," said Greg Valliere, chief US policy strategist at AGF Investments. "For an awful lot of people, there is still anxiety that the economy has not come all the way back and may not for some time."

The Trump campaign responded to the CNN poll by talking up the administration's pre-pandemic success.

"President Trump built the greatest economy in the world before it was artificially interrupted, and thanks to his pro-growth policies, tax cuts, and deregulation, the Great American Comeback is underway," Samantha Zager, the campaign's deputy national press secretary, said in a statement.

At 7.9%, the unemployment rate is the highest it has ever been ahead of a presidential election since the government started tracking the monthly rate in 1948. Although the United States rapidly recovered more than half the jobs lost during the pandemic, the recovery is losing momentum.

The number of unemployed people who permanently lost their old jobs hit a seven year-high of 3.8 million in September. What many had hoped were furloughs or temporary job losses are becoming permanent.

Parts of the US economy are enjoying a fast recovery. In particular, the housing market is booming as Millennials and city dwellers venture into the suburbs and thanks to record-low mortgage rates.

Yet large swaths of the economy are still hurting -- and may continue to until a vaccine is widely available. Leisure activities like eating at restaurants, staying at hotels and flying remain below pre-pandemic levels. Cineworld, the second largest cinema group in the world, warned it will suspend operations at all of its theaters in the United States and United Kingdom.

CNN Business' Economic Recovery Dashboard shows the US economy is only 80% as strong as it was before the pandemic. In other words, it's got a long road back.

Against that backdrop, Trump's poll numbers on the economy have stumbled.

The CNN poll found that 48% of voters approve of the way Trump is handling the economy, while 48% disapprove. In the previous CNN poll, Trump had 50% approval on this issue, compared with 45% disapproval.

The Trump campaign argued that the latest CNN poll did not capture enough Republican voters.

"Pollsters inaccurately predicted Hillary Clinton would win in 2016," Zager said, "and despite their failure to forecast President Trump's victory, they haven't learned from their mistakes as they consistently under-sample Republicans."

The fact that Biden has closed the gap against Trump on the economy suggests the president's warnings of economic doom if he loses are not working.

Trump warned in an all-caps tweet Monday that Democrats would "shut our economy and jobs down" if they win in November.

Zager repeated that message, saying that Biden is pushing for tax hikes, a "job-killing" climate agenda and "another economic shutdown in the midst of our recovery."

Yet some on Wall Street are telling their clients the opposite.

Goldman Sachs has concluded that a Democratic sweep would mean a faster economic recovery because it would "sharply raise the probability" of a fiscal stimulus package of at least $2 trillion. The bank also pointed to Biden's longer-term spending plans on infrastructure, climate, health care and education.

Likewise, Moody's Analytics found that Biden's economic proposals, if enacted, would create 7.4 million more jobs than Trump's would.

"Their plans couldn't be more different," Mark Zandi, chief economist at Moody's Analytics, wrote in a CNN Business perspectives piece. "Based on our analysis, Biden has it right, and Trump has it wrong."

Trump has repeatedly pointed to the booming stock market as proof of his economic success. The S&P 500 has surged by a staggering 53% since the lows on March 23. The Nasdaq, home to pandemic winners like Amazon (AMZN) and Apple (AAPL), is up 65% since late March.

But some argue Trump's obsession with the stock market is backfiring because many Americans can't feel the boom on Wall Street.

Rich households have far more skin in the stock market, meaning that when stocks go up, the gains disproportionately go to the wealthiest families. As of the first quarter of 2020, the wealthiest 10% of US households owned 87% of all stocks and mutual funds, according to the Federal Reserve. Black households owned just 1.6% of stocks and mutual funds, according to the Fed.

"Bragging about the stock market could actually make some people resentful," said AGF's Valliere. "There's an elite class that has done quite well in the markets, but that prosperity is not spread to voters at large."

The prediction markets suggest there is growing confidence that Biden will defeat Trump. A bettor can pay 65 cents on PredictIt to win $1 if Biden wins the White House. It only costs 40 cents to bet that Trump will win. The 25-cent gap between Biden and Trump has more than doubled since late September.

Of course, it's important to note that the election is still four weeks away -- an eternity in the rapidly moving Trump era.

Valliere pointed out that the notorious Access Hollywood tape that many thought doomed Trump's candidacy in 2016 wasn't released until October 7. And Trump still managed to recover and pull off an upset that few in Washington or Wall Street saw coming.

Still, Valliere said the latest developments and polling have only given him confidence in the outcome.

"I may have to revise my prediction from just a week ago that Biden would win narrowly," Valliere said. "Biden could win comfortably."