How Real Is the Squeeze?

That may be so, but plenty of Americans are still feeling overstretched and underpaid, and there is some evidence that Edwards' populist message, which helped win him a spot on the Democratic ticket, is resonating with voters: in last week's TIME poll, 51% of the likely voters interviewed said they agreed with his claim that the government under Bush benefits the rich at the expense of the middle class and the poor, and that view is shared by 55% of those who described themselves as independents. Brenda Keen, 49, a business manager for a University of Georgia literary journal, says Kerry's concern for the middle class is a big factor in winning her vote. "It's a struggle to have what's accepted as a middle-class American lifestyle," she says. Keen, the single mother of a 10-year-old, worries that even with a 3% raise--her first raise in two years--to her $36,000 salary, meeting the rising interest rates on a $3,000 home-repair loan will be a stretch. And yet not every cautious consumer is in the Kerry camp. After several months of joblessness, Jesse Roecke, 46, of Midland, Mich., will soon start work as a senior executive for Goodyear Tire & Rubber. He's more frugal now but unwilling to accept Kerry's rollback of tax cuts. "I believe there's a broad-based recovery," he says. "Bush was on the right track."

Even those who are ready to open their wallets are doing so carefully. Michelle Nance, 34, starts work this week in San Francisco as a nurse. She's planning a long-delayed visit to the dentist and the purchase of a new set of tires. But with $40,000 in student loans, "I'm not going to go out and buy a flat-screen TV," she says. Wal-Mart and Target both reported declines in sales growth in June. A drop in consumer spending, which accounts for two-thirds of the economy, could slow the recovery. "We're watching that very carefully," says Duncan Meldrum, president of the National Association for Business Economics. "I'm hoping this is just a pause." The Bush campaign must hope so too. --By Jyoti Thottam. With reporting by Perry Bacon Jr. with Kerry, Anne Berryman/Athens, Matthew Cooper/Washington, Daren Fonda/Los Angeles and Chris Maag/Cleveland