As the election looms closer, voters’ perceptions of the economy are expected to solidify in the coming months. According to a recent article in The Washington Post titled “Americans are down on the economy (again), with inflation topping election concerns”, consumer sentiment has taken a significant hit, reaching its lowest point in the past six months. Despite recent high gas prices and concerns about real wages, it is the lack of growth in real wages that is currently the main concern for many voters.
A graph illustrating the cumulative changes in real average hourly earnings for all workers and production and non-supervisory workers reveals that real wages have been declining since the start of the Biden Administration. While inflation peaked at 9.1 percent in June 2022 and showed progress until December 2023 due to disinflation, recent high inflation readings have reversed that progress in 2024. Despite efforts by the White House to address healthcare and housing costs as well as reduce taxes for middle-class families, it remains unclear if this economic message resonates with voters.
Jared Bernstein, chair of Biden’s Council of Economic Advisers, mentioned the administration’s efforts to lower costs for families and ensure billionaires and corporations pay their fair share. However, this statement lacks economic logic.
The ongoing question is whether inflation will remain a key issue or if focus will shift to economic growth. Recent data on credit card use, employment, retail sales, housing starts, and services employment have been weaker than expected. If these trends continue into the upcoming months leading up to the election, it could shape voters’ perceptions of the economy significantly.
Overall, while voters may have different concerns about various aspects of
