President Biden and Democrats face serious political headwinds driven by high inflation, a erratic stock market and deepening recession fears as they try to defend their majorities in the House and Senate.
The president relied on a massive economic recovery that propelled his party into another congressional sweep two years ago when he launched his ambitious recovery plan, using trillions of dollars to support the recovery of the labor market and struggling families.
In the late summer, after enduring the ravages of rising prices and a strained supply chain, the president and his party saw a series of economic and political gains.
Gas prices fell and Democrats were able to come together and pass a comprehensive climate and health care bill. The US also enjoyed its strongest hiring in decades, adding more than 10 million jobs since Biden took office and 3.8 million this year alone.
But the economic outlook for the United States is once again getting bleaker.
The latest inflation report could cost the president and his party dearly, as the risks to the US economy deepen.
Consumer prices are up 8.2% over the past 12 months and 0.4% last month alone, according to consumer price index data released Thursday by the Labor Department.
While the annual rate of inflation has been steadily declining since June, higher prices for food, shelter, health care and travel are weighing on household budgets.
Retail sales also declined in September, according to data released Friday by the Census Bureau, as more Americans ditched their spending amid rapid price growth.
“Inflation is the main factor that determines how much shoppers are willing to spend. In Friday’s analysis, households are tapping into savings, taking credit and reducing savings contributions because they directly meet higher prices,” Jack Kleinens, chief economist for the National Retail Federation, explained.
The financial pressure is also straining voters’ confidence in Biden and Democrats’ ability to get the United States out of the mud.
Only 28% of Americans think the United States is heading in the right direction, according to a poll conducted by The Economist and YouGov earlier this week.
The poll of 1,500 US citizens found that 41 percent of Democrats, 53 percent of independents and 78 percent of Republicans think the United States is already in a recession, even as an average of 420,000 per month has been added this year.
“You go to the grocery store and everything is more expensive and often more expensive than the last time you were there. It hits families’ budgets, it affects themselves,” Doug Hay, a Republican strategist and former spokesperson for the Republican National Committee, said in an interview Thursday. This is the first issue in the campaign.
“You pay more or make decisions not to spend that money. And that’s every day. Nothing beats that.”
Republicans have blamed Biden and Democrats for the rapid inflation facing American households since prices began rising last summer. Republican lawmakers say the $1.9 trillion US bailout – the blanket relief bill Biden signed in March 2021 – is the main reason Americans are suffering from high prices.
“Wages are falling, prices are high, and Democrats have no one to blame but themselves. Americans know that the Republican vote in November is a vote on lower prices and a strong economy,” Republican National Committee Chair Rona McDaniel said in a statement Thursday.
While most economists believe Biden’s stimulus act drove up inflation, it’s not the only factor that pushed prices higher. Inflation has been high around the world and Democrats are looking to maintain the strength of the US economy against their global peers.
Biden and Democratic lawmakers sought to highlight the rapid recovery of the labor market and a return to the pre-pandemic unemployment rate of 3.5 percent, then its lowest level in 51 years. Democrats are also trying to garner support with the recently enacted Inflation Cuts Act, a bill aimed at lowering prescription prices, health care and energy.
“The challenge for candidates is to find one, two or three things that resonate most with voters, while defining their impact but also reminding their constituents of what they face in those specific regions and constituencies,” Antjouan Sirait, a Democratic strategist, said in an interview Thursday. .
“Over the next few days, these people should not apologize for what has been done and in a historic way,” Seeright said.
Unfortunately for Democrats, the inflation resonated with voters more than the party’s attempts to dampen it.
Fifty-one percent of respondents to the Economist-YouGov survey said inflation was the most important factor for them when assessing the strength of the economy. Only 15 percent said the unemployment rate is the main way they judge the economy.
Only 12 percent of Democrats, 4 percent of Independents, and 4 percent of Republicans think unemployment is more important than inflation.
Siraight said it is imperative for Democrats to highlight their attempts to lower prices through the Inflation Cut Act, Biden’s efforts to normalize supply chains and the administration’s attempts to expand energy production. He also said that the lack of a Republican plan to fight inflation should give Democrats a good chance of winning over voters in their camps.
“If you compare that to what the Republicans have tried to deny and what they have refused to offer in the solution, I hope it is mindless to voters,” he said.
But Hay responded by saying that Republicans do not need a solution to overcome concerns about inflation and the economy. He compared the upcoming election to the 2010 midterms, when Republicans seized the House and Senate on a promise to repeal — not replace — the Affordable Care Act.
“Ultimately in politics, you tend to be more rewarded for identifying problems than providing solutions, and given the level of anger voters feel about this, this could be a winning strategy,” he said.