President Biden wants to tell voters a story about the economy, a story about steady job growth over the course of his presidency and a world-leading pandemic recovery.
Inflation is always a problem.
Last week's inflation report showed consumer prices rose 3.5 percent from March 2023 to March 2024. This continued a string of surprises this year and pointed to a resurgence in inflation after signs pointed the other way.
Biden administration officials have noted that the inflation rate has fallen from its previous peak, but the latest numbers show that it has not cooled completely. It is moving in the wrong direction for now and remains above the Federal Reserve's target of 2 percent.
Even though unemployment is at its lowest level in half a century, the president's approval of economic employment is significantly negative. The RealClearPolitics average shows that he is net negative by 18 percentage points in his handling of the economy and by 27 percentage points in his handling of inflation.
Political strategists from both parties have reported that voters repeatedly cite higher prices as a reason for their dissatisfaction with the situation in the country. The cost of everyday necessities – gas, food, accommodation – is a constant burden on them.
It's hard to convince voters to look on the bright side when they feel the pressure of higher prices on their household budgets. The common refrain from voters is: things cost too much.
Gasoline prices are rising again, a typical phenomenon as summer approaches. Although they are below their peak during the Biden presidency, they are significantly higher than when he took office. At the beginning of 2021, average gasoline prices were $2.42. Today, they are around $3.50, according to the US Energy Information Agency.
Food prices are again reducing household income. According to the U.S. Department of Agriculture, food prices rose 25 percent from 2019 to 2023.
According to the latest USDA analysis, food costs accounted for 11.3 percent of disposable income in 2022. That's the highest since 1991, when families spent 11.4 percent of disposable income on food.
According to one indicator, a dozen eggs now cost an average of about $2.99. That compares to an inflation-adjusted $2.09 per dozen in 2020.
Higher interest rates have resulted in more expensive home mortgages. Mortgage rates began to decline, but that trend has stalled or even begun to reverse. The Wall Street Journal published an article on Friday looking at the impact on middle-income families. The headline read: “Hold On or Pay Up: Home Buyers Lose Hope of Lower Rates.”
The story said that in March, a middle-income family could afford a home that cost no more than $416,000, taking into account current interest rates and assuming a 20 percent down payment. Three years ago, when mortgage rates were lower, this family could have purchased a home worth $561,000.
Further unexpected and unavoidable costs put a strain on the family's wallet. One example is car insurance, whose rates rose 22.2 percent last year, the sharpest increase since 1976. In Nevada, a presidential battleground state, car insurance rates rose compared to the previous year, according to a CNN report by 38 percent.
My colleague Heather Long noted earlier this year on the social media platform officially known as Twitter that both were the highest such increases ever recorded.
Biden made a statement last week following the March consumer price index report. He stressed that inflation has fallen by more than 60 percent since its peak, but said: “We still need to do more to reduce costs for hard-working families.” He added: “Tackling inflation remains my top priority economic priority.”
But presidents have few weapons in the fight against inflation. Jason Furman, an economist at Harvard University and chairman of the Council of Economic Advisers in the Obama administration, said 90 percent of inflation control is the job of the Federal Reserve. “The White House must, above all, find the best message to convey without many tools to change reality,” he said.
Biden has pushed measures to lower the cost of prescription drugs and championed junk fees that companies charge on airline tickets, rental cars and event tickets. In his State of the Union address, he announced initiatives to help homebuyers, but they have come to nothing.
Twice in the past week, the government announced measures to reduce student debt, aimed at boosting support among younger voters. However, these measures only affect the wallets of those who qualify, while increasing future costs for the state. And they were criticized for helping some who went to college at the expense of others who never attended college.
The Fed would cut interest rates for two reasons: to prevent a recession if one loomed, or because inflation had eased enough that officials were confident that lower interest rates would not trigger another round of inflation. Neither condition currently exists.
There is no recession on the horizon after long-standing predictions that interest rate hikes could or would trigger a recession. And now prices are rising faster than expected.
Economists consider it doubtful that there will be a rate cut in June, as was assumed a few months ago. A September interest rate cut, even if economically justified by then, could come too close to the election, leaving Federal Reserve Board Chairman Jerome H. Powell vulnerable to criticism that the Fed acted to help Biden politically.
The 2024 election will be about more than just economic issues. The biggest political story of the past week was the Arizona Supreme Court's decision to revive an 1864 law that bans abortions except in cases of danger to the mother's life and imposes penalties on those who perform abortions.
The decision will ensure that abortion will be a central issue in one of the key battlegrounds in November, with the likelihood of an abortion referendum on the ballot. Vice President Harris, who has led the administration's messaging on abortion for the past two years, flew to Arizona on Friday to highlight the lawsuit in state court.
Biden has also made clear that he will continue to focus on former President Donald Trump as a threat to democracy. Trump has said a second term would be an opportunity to retaliate against his opponents, and he has never backed down from his false claim that the 2020 election was stolen.
In the 2022 midterm elections, pre-election polls suggested inflation and the economy were the biggest issues for voters, leading to predictions of overwhelming Republican wins.
In the end, however, abortion and threats to democracy motivated Democratic voters. Republicans emerged disappointed from the midterm elections, gaining only a narrow majority in the House of Representatives, failing to take control of the Senate and losing several contentious gubernatorial elections.
Biden hopes this could happen again in November. But for him, the rise in inflation comes at exactly the wrong time. Many Americans say they believe the economy has been better under Trump. The incumbent president doesn't have much time to change these perceptions – even as he tries to push the election into different territory.
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