Even as President Joe Biden and Democrats try to refocus attention elsewhere, August’s 8.3% inflation figure means the economy is going to remain top of mind for voters going into the midterm elections.
Inflation ticked down to 8.3% for the 12 months ending in August, according to the consumer price index, slightly below July’s 8.5% figure but still a far cry from the Federal Reserve’s target of 2%. Food and energy prices led the way, meaning families will face rising prices each time they go out and make routine purchases.
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“Core inflation in August rose at double the rate of expectations, indicating inflation shows no signs of slowing down,” said Alfredo Ortiz, president of conservative advocacy group Job Creators Network. “Despite some moderation over the last year, the CPI remains near a 40-year high. Real wages continue to fall, and Americans are paying more for everything from groceries to gas since President Biden took office.”
Gas prices have fallen for two months, but those savings are being largely offset elsewhere. Core CPI rose by 0.6% in August alone, led by rising shelter costs. The energy index fell 5% on the month but is still up a sky-high 23.8% for the 12 months ending in August. Food prices increased more than 11% during that same period, according to the Bureau of Labor Statistics.
Biden released a statement saying it will “take more time” to bring inflation down, citing the Inflation Reduction Act as a sign of action the administration has taken to help. The act, however, will not reduce inflation anytime soon, a fact voters appear to realize.
Inflation has been a persistent and rising issue since Biden took office. It stood at just 1.4% his first month as president, jumping to 5% by May 2021, 6% in October, 7% in December, and has been at or above 8% since March of this year. The latest report was met with a stock market selloff, another indication that the economy will be a big issue for voters in November.
Still, some economists, such as University of Massachusetts professor Gerald Friedman, say inflation largely owes to drag from the pandemic and will eventually self-correct.
“The numbers are bad; there’s no getting around it,” he said, pointing to reports that 4 million workers remain out of the workforce. “But when we’re getting supply chain problems like we’ve been having, it’s hard. We can’t produce stuff as efficiently as we used to.”
The Fed has been aggressively hiking interest rates of late and is expected to do so again later this month. Left-leaning economists tend to decry these moves, fearing they’ll spark a recession.
“I think they’re being too aggressive,” Friedman said. “The world’s a nail for them, and they have a hammer.”
Voters are likely to notice high inflation either way, even if falling gas prices since June will ease some of the pressure. Biden is over 20 percentage points underwater on the economy, with a 58.6% disapproval rating in the RealClearPolitics polling average. That’s worse than his overall job approval.
Biden has mixed in speeches about how he’s fighting inflation with stern warnings about “MAGA Republicans” designed to focus attention on former President Donald Trump and what the GOP might do if it takes control of Congress.
GOPers are ready to take the issue to the campaign trail, especially since Biden’s actions, including the $1.9 trillion American Rescue Plan and student debt transfer, are widely seen as helping fuel inflation.
Republican strategist Doug Heye previously told the Washington Examiner that Republicans “should be talking about inflation all day every day” leading up to the midterm elections.
Meanwhile, the Republican National Committee released a nationwide memo Tuesday indicating the party should focus solidly on the economy and crime. Trump’s name does not appear anywhere in the memo.
A possible saving grace for Democrats when it comes to inflation is that the figure has eased slightly since June, when it peaked at 9.1%. Similarly, while real wages are down 2.8% year over year, they have increased slightly in each of the last two months, a fact Biden pointed out in his statement.
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Friedman argues that falling inflation, even if it’s still very high overall, could still be perceived by voters as a positive.
“People respond to recent changes,” he said. “If inflation is coming down, even if it’s still high, that could be OK for Biden and the Democrats.”
