A man considers options at a Dollar Store in Alhambra, California. Shoppers continue to face high prices for everyday goods. Inflation is voters’ top concern in midterm elections.
Frederic J. Brown / AFP / Getty Images
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A man considers options at a Dollar Store in Alhambra, California. Shoppers continue to face high prices for everyday goods. Inflation is voters’ top concern in midterm elections.
Frederic J. Brown / AFP / Getty Images
Like a movie monster from the 1970s, inflation has returned and drawn crowds at a polling station near you.
Rising prices are the number one concern for voters in this year’s midterm elections, with rising abortions, crime and other prominent issues.
More than a third of voters say inflation is their most pressing priority, according to the latest figures NPR / PBS Newshour/ Marist poll. “Preserving democracy” was a distant moment. Republicans are seen as better than Democrats at dealing with inflation by a wide margin.
The election comes as consumer prices are rising at almost the fastest rate in four decades. Annual inflation in September was 8.2%. This is only slightly down from 9% in June, the highest level since 1981.
The consumer price index for October will be released on Thursday.
The price increase has sparked anxiety among Americans, who are paying more for gasoline, groceries and other necessities.
Inflation wasn’t on the radar two years ago
Inflation was of little concern when President Biden first took office. Although the pandemic has caused increased isolation prices for things like lumber – overall cost of living increases at less than 2% per year.
The incoming administration is more concerned with jobs – fearing a repeat of the slow recovery from the global financial crisis. The unemployment rate last January was 6.4% – down from nearly 15% in the early months of the pandemic. But with the number of COVID-19 cases rising, the economy lost 115,000 jobs last month when Biden was sworn in.
Congressional Democrats quickly passed a $1.9 trillion economic relief billincludes $1,400 direct payments for most adults, along with expanded unemployment benefits and a new child tax credit.
As an economic stimulus, it was a success. Employers have added more than 10 million jobs since Biden took office. But Republicans blame the heavy-handed bailout bill – passed without GOP support – for driving prices away.
Senator Rick Scott, R-Fla., said: “Inflation is caused by reckless spending by Democrats. NPR’s Morning version last week.
Inflation is a global problem
Undoubtedly, other factors have contributed to high inflation, including the lingering effects of the pandemic and Russia’s invasion of Ukraine. Inflation is even higher in the Eurozone and the UK than it is in the US, largely due to rising energy costs related to the Ukraine war.
But some prominent Democrats admit that last year’s bailout played a role in heating up the economy and driving prices higher.
“Now the bathtub is overflowing,” Former Treasury Secretary Larry Summerswho warned his fellow Democrats about a result. “And it’s much easier to prevent the bathtub from overflowing than it is to get the water back.”
The Federal Reserve Responds
For much of last year, the Federal Reserve believed prices would cool on their own, once supply chain troubles caused by the pandemic were resolved. But inflation has proven to be higher and more stubborn than expected by the central bank. In the spring of this year, the Fed began raising interest rates in an effort to reduce demand and control prices.
Since March, the Fed has raised its benchmark interest rate six times, increase borrowing costs for anyone trying to buy a house or a car or carry a balance on a credit card. Fed Chairman Jerome Powell last week warned that interest rates will likely have to move higher than expected next year, although the increase could come with smaller increases.
The Fed’s crackdown, along with similar moves by other central banks, has increased the risk of a global economic slowdown.
An advantage of GOP
Nearly half of voters surveyed in the NPR poll said Republicans would do a better job of controlling inflation, compared with just 27% who said Democrats would be more effective. While Republicans capitalized on voter frustration over rising prices, they introduced some specific regulations to reduce inflation.
Asked about the above GOP strategy Morning versionSenator Scott proposed cutting spending and increasing domestic energy production.
“Step one, we have to do in government what families do. You live within your means,” said Scott, who chairs the Republican Senate Campaign Committee. “Above all, we have to figure out how to produce energy in this country safely.”
Gasoline prices are a particularly strong indicator of inflation, and President Biden’s approval rating is likely to drop whenever pump prices spike.
National average price of petrol reached a record high $5.01 a gallon in June, when sanctions against Russia sent world crude oil prices soaring. Gas prices have since dropped to about $3.80, according to AAA.
