The escalating inflation in the U.S. exerts a significant psychological impact.
The gap between the real and perceived realities in the U.S. can be quite substantial. Even with a steady job market and a decrease in inflation, a large number of American citizens view the economic situation as unfavorable, just as the Presidential election draws near on November 5th. According to a poll conducted by "The New York Times" and Siena College, around 50% of respondents rated the economic situation as "poor", in spite of the improvement in inflation and the job market.
The shock of high inflation from recent years still lingers in the minds of many voters. As Ryan Sweet, an economist from Oxford Economics, explains, "You have to go back to the 1970s and 1980s to see something comparable." This latest experience with inflation has a significant impact, especially on lower and middle-income households.
The inflation rate under President Joe Biden reached 9.1% in June 2022, marking the highest level in nearly 40 years. This surge was primarily due to the COVID-19 pandemic and the Russian invasion of Ukraine. Although the rate of inflation has since decreased, consumer prices are currently about 20% higher than at the start of 2020.
Trump leverages rising prices for his campaign
Republican presidential candidate and former President Donald Trump is leveraging this issue for his campaign. He promotes lower prices during his tenure (2017-2021) and asserts that inflation will spike again if Democrat Kamala Harris maintains power. Trump is focusing directly on the wallets of voters, as the economic situation is one of the most deciding factors for many voters in the election on November 5th.
Julia Pollak, advisor at the job portal ZipRecruiter, highlights that the positive data from the job market does not give a clear picture of sector differences. In fact, the creation of new jobs is concentrated in specific sectors, benefiting only about half of the workforce.
The other half is experiencing slow growth in their industries, says Pollak. This means that many workers are feeling the need for their wages to catch up. This is evident in recent labor disputes and strikes, like those by dockworkers or Boeing employees.
Voters view Trump as more competent in managing economy
When assessing the economic situation, the mantra of former President Bill Clinton's campaign strategist James Carville often comes to mind, "It's the economy, stupid." In many polls, voters perceive that Trump is more skilled in economic management than Vice President Harris.
"The fact that people don't feel like they're accumulating wealth in the current economic situation is a significant problem for the party in power," says Joanne Hsu from the University of Michigan.
Harris's economic policy focuses on strengthening the middle class, while she criticizes Trump for favoring the rich and big corporations. Carville advises intensifying the attack on the Republican's economic policies. "Trump is offering people, as usual, questionable remedies and things that have never worked," said Carville. "Like tariffs - a truly peculiar and dumb idea."
- Despite the improvements in the job market and a decrease in inflation, many voters still view the economic situation under President Joe Biden unfavorably, as evidenced by a poll showing that about 50% of respondents rated it as "poor".
- The economic situation is a major deciding factor for many voters in the upcoming election on November 5th, and Republican presidential candidate Donald Trump is leveraging the issue of inflation, promoting his past record of lower prices during his tenure and warning that inflation will spike again if Democrat Kamala Harris maintains power.
