Soaring inflation clouds Americans' views on economy, Biden
WASHINGTON (TND) — As inflation climbs to a 39-year high, polls show the American public’s assessment of the economic recovery from the COVID-19 pandemic is darkening and the Biden administration’s efforts to brighten their outlook have so far failed to resonate.
Consumer prices rose 6.8% in November compared to a year earlier as costs increased for housing, cars, gas, and groceries – the highest annual rate since 1982. Amid growing public concern about inflation, the White House stressed the overall economy is improving steadily, and many economists expect the price surge to ease in the months ahead.
“Yesterday, we got more proof that our jobs recovery is on track and setting records – with unemployment insurance claims falling to their lowest level in 50 years and nearly 6 million Americans back to work,” President Joe Biden said in a statement Friday. “Economic growth is stronger here than virtually any other nation. Americans have more money in their pockets than this time last year - $100 more each month than last year - even after accounting for price increases.”
However, Biden acknowledged bringing prices down is “a top goal” for the administration going forward. He noted some signs that inflation might be slowing since the November data was collected, and he argued his Build Back Better agenda would help counter higher costs if passed.
The spike in inflation is a result of a variety of factors, including soaring consumer demand, supply chain disruptions, and continuing complications caused by the pandemic. Republicans placed blame squarely on Biden and congressional Democrats for funneling excessive stimulus into an economy that was already primed for recovery.
“The Biden administration has created an economic crisis unlike any other, all at the expense of the American taxpayer,” Rep. Blaine Luetkemeyer, R-Mo., ranking Republican on the House Small Business Committee, said Friday.
Although prices are spiraling upward, other economic indicators are much more positive. The economy has added over 6 million jobs since January, the stock market has risen about 25%, and gross domestic product growth this quarter is expected to be strong.
According to Gary Nordlinger, a political consultant and adjunct professor at the George Washington University Graduate School of Political Management, the conflicting data is difficult for average Americans to interpret. Much of their immediate anxiety appears to be driven by inflation, and that may crowd out the more encouraging macroeconomic trends.
“You hear about a 4.3% unemployment rate, yet 11 million jobs need fillings,” Nordlinger said. “It’s very difficult for the average person to decide if the glass is half-empty or half-full.”
Several new polls reflect that uncertainty, as opinions of the economy have become more negative than they were a year ago and voters increasingly hold Biden responsible for their financial troubles. According to a survey released by the University of Michigan Friday, consumer sentiment has improved by about four points since November, but it remains about 10 points below where it was last December, despite economic gains.
A Wall Street Journal survey of registered voters released this week showed 61% believe the economy is headed in the wrong direction, and 46% expect it to get worse in the next year. Still, nearly three-quarters expect their personal finances will stay the same or improve.
A new Associated Press-NORC Center for Public Affairs Research poll shows two-thirds of Americans say their household costs have increased since the pandemic began, while only one-quarter say their incomes have risen. About 40% said higher prices have had a “substantial” impact on their finances.
In a CNBC All-America Survey released Thursday, approval of President Biden’s handling of the economy fell to 37% as voters identified inflation as their top concern. The percentage of Americans who believe the economy is getting worse was 7 points higher than last December.
The trajectory of the economy is stronger than many Americans believe, but inflation presents a mounting threat to the recovery, especially if expectations that prices will continue to rise take hold. Polls suggest some of the pessimism is triggered by partisanship – with Republican negativity toward the economy rising sharply after the 2020 election – but inflation is difficult for Americans to avoid and dangerous for politicians to ignore.
“You do have out-of-control inflation right now, no doubt about it, and it really is driven by gas prices and food prices, which are volatile," former Trump White House economic adviser Stephen Moore told The National Desk Friday. “Everybody goes to the gas pump and feels that every time they fill up their tank, so I'm very concerned.”
In the AP/NORC survey, attitudes about the overall state of the economy were deeply polarized, with only one in 10 Republicans describing the economy as good, compared to more than half of Democrats. The share of Republicans who said their personal finances are healthy was much higher, though, around 60%.
Frustration is growing among Biden aides and allies that neither the press nor the public is giving him sufficient credit for an economic recovery that has been stronger than many experts anticipated. Inflation fears aside, jobs, wages, and economic growth are rebounding much faster than in the aftermath of other recent crises.
“The Biden administration is delivering on the fastest sustained economic recovery in American history, yet its messaging struggles to tell that story,” Democratic strategist Max Burns wrote in The Hill Thursday.
Burns called for the White House to do more than merely cite positive data, connecting Biden’s policies to the real experience of Americans and humanizing economic gains. He also cast much of the fault for public misperceptions of the health of the economy on the “conservative media machine.”
Dozens of liberal groups signed a letter to media stakeholders this week complaining of “under-reporting and negative bias” and demanding more balanced coverage of Biden’s agenda. According to CNN, administration officials have been briefing major newsrooms on job creation and supply chain improvements, hoping to reshape coverage.
Pressing for more positive headlines might not be enough to save Democrats from a political disaster in the 2022 midterms. Historical trends already strongly favor the party out of power, and entrenched skepticism about Biden’s handling of the economy could make that even harder to overcome.
“It’s terrible headwinds for Democrats,” Nordlinger said.
Democrats have struggled to shift negative perceptions of a relatively healthy economy in the past, and efforts to tout economic progress under President Barack Obama fell flat with many voters in 2016. If Americans are still facing high prices for goods and gas next fall, talk of strong GDP and low unemployment might not make much difference.
The last time inflation was this high, President Ronald Reagan’s party lost 27 House seats in the 1982 midterms and polls suggested Reagan was on track for a dismal defeat in his 1984 reelection bid. Two years later, his popularity bounced back and he achieved a landslide victory fueled by a booming economy and plummeting inflation.
“Whether they deserve the blame or not, Democrats will take the blame for inflation because the public perceives them as in charge,” Nordlinger said.
