Categories: Economic News

Biden faces job growth as voters fear inflation

WASHINGTON (AP) – President Joe Biden has achieved an enviable record for jobs, with 10.3 million gained during his tenure. But voters in Tuesday’s midterm elections are much more focused on inflation hovering around 40-year highs.

That has left the president scrambling to convince the public that job gains mean better days ahead, even as fears of a recession grow.

Presidents have long trusted that voters would reward them for strong economic growth, but inflation has thrown a wrench into the already difficult likelihood that Democrats will retain control of the House and Senate.

Economic anxieties have been heightened as the Federal Reserve has repeatedly raised its benchmark interest rates to reduce inflation and possibly raise unemployment. Mortgage costs have soared, while the S&P 500 has fallen more than 20% so far this year as the world braces for a possible crash.

Biden is asking voters to look past the current financial pain, saying what matters are the job gains he believes his policies are fostering. The government reported on Friday that employers added 261,000 jobs in October as the unemployment rate rose to 3.7%.

Roughly 740,000 manufacturing jobs have been added since the start of Biden’s presidency, a number the president says will continue to rise because of his funding for infrastructure projects, the production of computer chips and the shift to clean energy sources.

“America is reasserting itself, it’s as simple as that,” Biden said in a speech on Friday. “We also know that people are still struggling with inflation. It’s our number one priority.”

However, the president also warns that a Republican majority in Congress could worsen inflation by trying to undo its programs and treat federal debt payments as a bargaining chip instead of an honorarium.

Their challenge is that the party in power generally faces skeptical voters in US legislatures, and inflation looms over the public mind more than job growth.

“If you have a job, it’s a small comfort to know that the job market is strong if, at the same time, you feel like every paycheck is worth less and less,” said pollster Kristen Soltis Anderson. “Inflation is political poison because voters are reminded every day every day that they’re spending money that it’s a problem we’re having.”

As Biden tries to stave off fears that inflation will tip the country into recession, his main test of the economy’s resilience is continued job growth.

“As we look at the economy as a whole, we don’t see it going into recession,” White House press secretary Karine Jean-Pierre told reporters ahead of the latest jobs report.

Heading into the election, Biden and the Democrats are already at a disadvantage. Voters generally favor the party out of the White House in the midterms, giving Republicans an automatic advantage. When Yale University economist Ray Fair analyzed past elections, his model predicted Democrats would win just 46.4 percent of the national vote, largely because Biden was in the Oval Office.

Fair’s analysis suggests that inflation essentially wiped out the political momentum Democrats might have gained from strong economic growth through the three quarters of 2021. Even if the economy is the starting point for many voters, the conflicting forces of past growth and high inflation cancel each other out. .

That puts the Democratic vote share about the same as the historical trend suggests, Fair concluded.

But inflation compounds the obstacles for a president who has tried to convey optimism as he tours the country in the run-up to the election. Research in social psychology and behavioral economics generally shows that people often focus on the negative and can block out the positive.

“People pay more attention to bad news than good news and are more likely to retain and remember it,” said Matthew Incantalupo, a political scientist at Yeshiva University.

Incantalupo’s research looks at how voters absorb economic news. When unemployment is low, as it is now, he said, voters generally think of jobs as a personal issue, rather than a systemic issue involving government policies. But most think of inflation as a social problem beyond anyone’s control, unless that individual runs the Fed.

“When it’s high, everybody experiences it at least a little bit, and there’s really no individual way to avoid it,” Incantalupo said. “Voters will look to the government for remedies in these circumstances, and in many cases that will result in them punishing the incumbents, even in the presence of other positive news about the economy.”

Republican candidates have specifically said Biden’s $1.9 trillion coronavirus relief package last year overheated the economy, causing prices to rise along with job gains they claim they would have occurred anyway as the pandemic receded. They have also said that Biden should have loosened restrictions on oil production to increase domestic output and lower gasoline prices.

House Republican Leader Kevin McCarthy, who could become speaker if the GOP wins the House majority, has hit Biden with high prices. As Biden has warned that Republicans who deny the outcome of the 2020 election are a threat to democracy, the California congressman responded that what voters care about is gas and grocery costs.

“President Biden is trying to divide and deflect at a time when America needs to come together, because he can’t talk about his policies that have raised the cost of living,” McCarthy tweeted last week . “The American people are not buying it.”

However, inflation is not just a domestic problem. After Russia invaded Ukraine, energy and food costs soared and suddenly reversed global dynamics as inflation rose faster in parts of the world with less aggressive coronavirus relief than the US. Annual inflation in the euro zone is a record 10.7%, much higher than 8.2%. % in the US

Meanwhile, growth has slowed in China, the pace of global trade is slowing and Saudi Arabia-led OPEC+ has cut oil production to support prices. And because the Fed is raising rates to reduce domestic inflation, the dollar has risen in value and essentially exported higher prices to the rest of the world.

This has left American voters in the curious position of not necessarily blaming the president for inflation, even though they disapprove of his economic leadership.

An October survey by the AP-NORC Center for Public Affairs captured this divide. More than half of voters say prices are higher because of factors beyond Biden’s control. But only 36% approve of his economic leadership.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


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