President Joe Biden‘s of the United States job performance rating has slumped into the 30s, and Democrats are bracing for big losses in midterm elections in November. The culprit is US inflation rate, a corrosive force that can demoralize every voter. Inflation has raced to 40-year-highs on the back of raging demand and Covid-19 compromised supply chains, exacerbated by a spike in oil prices. And depending whom you believe, Biden’s $1.9 trillion economic rescue plan pumped a torrent of cash into the economy at the wrong time.
In short, almost everything got more expensive this year—especially the everyday expenses most Americans cannot avoid, like food, housing, and gas—bad news for the party in power in Washington heading into an election. Notable in that CNN poll was that 75% called inflation and the cost of living the most important economic problem facing their family. Last summer, that figure stood at 43%. To wit: Expect several key reports this week on US economic health and consumer prices to offer a glimpse of how bad things could get. Note: The Federal Reserve is also expected to raise interest rates again in an attempt to tame inflation (despite some experts thinking it came too late and risks tipping the economy into a recession), as CNN Business’ Nicole Goodkind wrote in a piece titled “What the Fed and Madonna have in common” over the weekend.
If Fed Chair Jerome Powell claims the Fed will tame historically high inflation rates, Americans give it to him and internalize it. It’s a self-fulfilling prophecy for the Fed’s Like The Secret, says Goodkind.
The Federal Reserve, like Madonna, is constantly evolving. The institution that aims to project an aura of stability is not beyond surprising us—it has made its monetary policy through trial-and-error, and there have been errors. Meanwhile, amid all the focus on inflation’s erosion of the strength of US paychecks, it’s important to remember that this week marks a sobering milestone for struggling American families: It’s been 13 years since the last time the US federal minimum wage was raised, to $7.25 an hour, making it the longest period without a raise since the federal minimum wage was enacted in 1938. (About 30 states and Washington, DC, have minimum wages above the federal standard.)
That can’t be helping Biden in the face of unfavorable poll numbers about the economy, only 18 of Americans in that CNN survey considered the economy in good shape, while 82 said economic conditions are poor.
The Conference Board’s Consumer Confidence Index is scheduled to be released this week, following last month’s report showing souring confidence in the face of high gas and food prices and rising recession risks. The White House seized on a more recent dip in gas prices earlier this month, while complaining that the tumbling price was not being covered by the media with the same intensity that accompanied the hike in prices. But public perceptions of the economy aren’t likely to change that fast. Even if this week’s data suggest that the economy isn’t heading for a recession, it will still be a hard sell for the White House. Any president arguing that the economy isn’t really as bad as it feels to voters is in trouble.
