- According to most economic metrics, US businesses are staging a remarkable rebound from the Covid-19 slowdown. But Americans don’t feel good about the economy.
- In a recent NBC News poll, 57% of Americans said they disapprove of President Joe Biden’s handling of the economy.
- Democrats and Republicans agree that one economic event working against Democrats’ odds in 2022 is the recent rise in prices.
- Democrats will try to put voters on the political stake: investment in infrastructure and anti-poverty programs is worth the temporary inflation.
According to most economic metrics, US businesses are staging a remarkable rebound from the Covid-19 slowdown. But ask the people themselves, and Americans tell you they’re not feeling so fickle.
Employers added more than half a million jobs in October, the unemployment rate is below 5% and spending in the economy is back to its pre-coronavirus trend. The average hourly wage in the US is up about 5% from a year ago, and up 39% since the S&P 500 election of President Joe Biden in 2020.
But for all the good news, Americans still think the economy is on a downward trajectory.
That’s a problem for Democrats, who are trying to garner little majorities in both the House and Senate. This is in addition to the general ascent by the president’s party in the midterm election cycle, when the ruling party often loses seats.
In a recent NBC News poll, 57% of Americans said they disapprove About Biden’s handling of the economy, while just 40% said they approve. Meanwhile, an October Gallup study showed that 75% of Americans view current economic conditions in the country as only fair (42%) or poor (33%), while 68% say the economy is getting worse. Other polls show that Inflation and economic concerns Allaying concerns about covid.
Democrats and Republicans agree that one economic event working against Democrats’ odds in 2022 is the recent rise in prices. As such, Democrats are expected to be laser-focused on their legislative achievements on the campaign trail in 2022.
In short, the party will try to persuade voters on a political gamble: Historic investments in infrastructure, anti-poverty programs and climate initiatives are worth the odd but temporary inflation, says Raymond James Washington policy analyst Ed Mills.
“Democrats are facing those headwinds no matter what they do, so they want to shake hands with a list of achievements,” Mills wrote in an email.
Democrats hope their recent legislative successes, including a $1 trillion infrastructure package, will help ease any outcry from voters about rising prices, which have hit everything from gasoline to groceries in recent months. has increased the cost.
Wages may be up 4.9% on a year-over-year basis, but the Labor Department's consumer price index - one of the most popular inflation gauges - was up 5.4% in the 12 months ending September. This is almost the same rate as was seen in June and July, all of which are the highest in a decade. The government is scheduled to release the CPI data for October 2021 on Wednesday.
This means that many Americans have seen their real wages and purchasing power decline over the past 12 months. Not many people could afford as many gallons of gas, egg cartons, or barrels of household heating oil as they did a year ago.
National Average per gallon price of regular petrol According to the Department of Energy, $3.41 is up almost 40% from $2.42 in February 2020.
That's why the Biden administration, and every Democrat hoping to win the election in 2022, is preparing to fuel that inflationary pessimism with a list of reasons they think voters should feel better than them.
Democrats who spoke to CNBC said they plan to counter concerns about rising prices by pointing to continued improvements in the supply chain, better wages and greater access to child care.
"As the country recovers from the pandemic and economic crisis once in a century, the private businesses that make up our supply chain, the businesses and the American people who get goods in, have struggled to keep up," a spokesperson for he said. The Democratic National Committee told CNBC via email.
Economists say the current outbreak of inflation stems from a mismatch between strong demand and inadequate supply of goods, which results in logistical bottlenecks and labor shortages. The White House published the first of many reports on this last week The current state of the US supply chain, the administration is making an effort to track the transportation and logistics of the country.
The administration on Tuesday announced efforts to ease some of the supply-chain issues over the next two months.
These include instructing the Department of Transportation to allow port officials to redirect project cost savings to address supply-chain challenges, and with grants of more than $240 million over the next 45 days for ports and maritime Initiate program for modernization of highways.
"While we experience this temporary pain, and expect things to improve with the passage of President Biden's agenda, we have seen some positive signs, including that wage growth is outpacing inflation." especially for Americans who had the most insecure jobs and the lowest wages," a DNC spokesperson said.
Wages for those employed in the leisure and hospitality industry, which saw some of the worst layoffs during the spring of 2020, are in the midst of a strong rebound for renting hotels, resorts and restaurants. The median hourly earnings of workers in that sector increased from $17.12 a year ago to $19.04, an increase of more than 11%.
Some sectors with higher-than-inflation wages haven't stopped Republicans from coming home to the broader inflation problem and warning that even more fiscal stimulus could make the problem worse.
"Biden's Build Back Broke agenda has led to skyrocketing prices, a supply chain crisis, a slowing economy, labor shortages and weak job growth," said Republican National Committee Chair Ronna McDaniel. said in a press release on 28 October. "Trillions and extravagance and higher taxes will only hurt the middle class further and small businesses will have to heal."
Virginia voters heeded that warning on November 2, when Republican Glenn Youngkin defeated former Democratic Governor Terry McAuliffe in that state's gubernatorial election. Youngkin's victory in Virginia, which Biden won by a healthy 10 points in 2020, is being seen as a real playbook for the rest of the party in 2022.
"We must continue to focus on the failures of the Biden economy," Rep. Jim Banks, R-Ind., Wrote in a memo after Virginia election results. Banks is the chairman of the Republican Study Committee, a group of the most conservative House Republicans.
"Youngkin is focused on providing relief to the runaway inflation caused by the Biden economy and not shutting down the economy again," he said. "Our initial focus on runaway inflation and the escalating supply chain crisis is hitting home with voters. We need to work and bring solutions to the table to address their concerns."
Democrats argue that both the $1 trillion infrastructure and the $1.75 trillion Build Back Better bill will help ease supply chain issues. After party progressives and centrists reached a non-binding agreement to approve the social-spending plan later in November, the House passed the bipartisan infrastructure bill last week, sending it to Biden's desk.
"If you're concerned about inflation, it's important to understand why it's happening: supply chain, labor and health complications," Congressional Progressive Caucus member Rep. Alexandria Ocasio-Cortez wrote in a Twitter post Thursday. .
"My family is one of essential workers: school bus drivers, postal workers, cleaners, etc.," she said. "When childcare wasn't available, my family couldn't work - they just stayed at home. When childcare isn't universally available, it hits the labor market. It can become a supply chain issue!" "
At the end of the day, Democrats are making a bet, says Raymond James analyst Mills.
The big bet is that greater access to child care, along with the promise of more efficient port and highway systems, will help bring workers back into the labor force, reduce inflation and win over a population that doesn't feel helped. does.
The good news for Democrats is that they have some time. Inflation could subside, supply chains could return to full capacity and the positive effects of their legislation could begin to impact voters before the mid-term of 2022.
“They are hoping to point to SALT tax relief, expansion of the child tax credit, expanded childcare support, down-payment assistance for housing, the way reconciliation yields tangible benefits and a net tax deduction for most households.” ,” Mills wrote. "Whether or not it moves the needle with voters is the big debate."