WASHINGTON (AP) – President Joe Biden is promoting the idea of making life more affordable for middle-class families – and here the recent surge in inflation poses both a political and an economic risk.
The US economy may expect its fastest growth since 1984, but many Americans are not as confident about the economy, according to a new survey by the Associated Press-NORC Center for Public Affairs Research. Republican lawmakers attacked the Biden administration over inflation as the country reopened after the coronavirus pandemic and sentiment for the biased economy began to take hold.
Less than half, 45%, rate the economy in good shape while 54% say it is in bad shape. Views are similar to AP-NORC polls in June and March, despite the increase in vaccinations and aid flow from Biden’s $ 1.9 trillion coronavirus aid package. The results suggest that Americans not only filter their thoughts about the economy through their policies, but also see uncertainty as the country still has 6.8 million jobs below pre-pandemic levels.
John Novak, a 52-year-old school maintenance worker from Hudson, Wisconsin, is fed up with seeing higher gasoline prices and waiting six months to buy a refrigerator. He blames the size of the aid package.
“Everything just costs more and nobody really earns more unless you get government money, which I got, but I’d rather have lower prices,” said Novak, who voted for President Donald Trump last year. “It’s a difficult place. We’re getting out of this pandemic somehow, and if you pour in too much money you just can’t get enough of what you want. “
The Biden administration recognizes that inflation is a powerful weapon that could be used politically against Democrats. Officials promise to remain vigilant of price hikes, but say the recent outbreak reflects the complex nature of restarting an economy that has closed because of the pandemic and that it will only temporarily increase inflation.
There are some early signs of a decline in inflation as the Manheim Used Vehicle Value Index fell for the first 15 days of July. Meanwhile, since Biden’s presidency, the economy has created nearly 605,000 jobs per month, and economic growth is over 7%.
“There is no better way to contradict false news than to publish a strong performance,” said Jared Bernstein, member of the White House economic adviser. “When you’re in the middle of a recovery with numbers like that, I think it becomes more difficult for the people on the other side to paint a wrong version of reality.”
Yet political identity shapes views on the economy. About 6 in 10 Democrats say the economy is good, while three-quarters of Republicans say conditions are bad.
It also affects how Americans view Biden’s handling of the economy, with 52% agreeing and 47% overall disagreeing. Biden’s overall approval rating is slightly higher at 59%, as is his approval rating for his handling of the COVID-19 pandemic at 66%.
About 8 in 10 Democrats but only about 1 in 10 Republicans approve of Biden on the economy. Republicans are slightly more likely to approve of Biden’s handling of the coronavirus pandemic (about 3 in 10 do) and even issues like health care and infrastructure (about 2 in 10 do).
Federal Reserve officials estimated the economy could grow about 7% this year. But the Federal Reserve’s job is also to keep inflation at a 2% target, and there are signs that price pressures have not eased as supplies of homes, cars and the raw materials used by many manufacturers are limited is.
The solid demand should lead to additional supply, which can then help to ease inflation. However, the inflation outlook, which Fed Chairman Jerome Powell sees as temporary, has become somewhat bleaker. Consumer prices rose 5.4% for the year ended June. Excluding the volatile food and energy costs, they are up 4.5%, the largest increase since 1991.
“We don’t have another example of the last time we reopened a $ 20 trillion economy,” Powell told the Senate Committee on Banking, Housing and Urban Affairs this month. “We are humble about what we understand.”
Joseph Smith, 72, and a retiree in Alexandria, Virginia, said he was concerned that Powell and Republicans’ constant focus on inflation was terrifying consumers.
“The Fed is hindering the economy by constantly talking about inflation,” said Smith, who supported Biden last year and believes the president’s direct words about the coronavirus and the economy have brought “real stability” to the government.
Republican lawmakers have blamed Biden’s spending for inflation, saying its plans for another $ 4.1 trillion in new spending to be paid through taxes on the rich and corporations will only drive prices up continue to rise. They frame it as a return to the soaring price hikes of the 1970s, even if economists’ inflation concerns say it isn’t. But the message unites Republican voters.
“As Joe Biden’s inflation crisis rages, he just can’t stop fueling it with more ruthless government spending,” said Florida Senator Rick Scott, chairman of the National Republican Senatorial Committee. “Americans are experiencing 1970s-style inflation again, and that’s because of Joe Biden’s failed economic policy.”
This type of criticism is repeated by voters as a token of challenge facing Biden as he seeks to make his politics more attractive.
Gregory Holman, 58, a hotel manager in Grants Pass, Oregon, said he couldn’t find an affordable used car. He said it was to blame for excessive government spending and classified Biden accordingly.
“I would give him an F,” said Holman. “He’s just a failure at everything he does.”
The AP-NORC survey of 1,308 adults was conducted July 15-19 using a sample from NORC’s AmeriSpeak probability-based panel, which is representative of the US population. The sample error rate for all respondents is plus or minus 3.7 percentage points.