Despite the declining inflation rates, American consumers remain dissatisfied with President Biden as prices for basic necessities like gas and milk continue to be higher compared to 2019. Many have criticized Biden’s decision to brand the economy under his name as “Bidenomics,” viewing it as a misguided move considering the disappointment expressed by consumers regarding his handling of the post-pandemic economy. According to Axios, polls show that Americans’ perception of the economy is negative, with some Democrats openly criticizing Biden’s campaign strategy for seemingly ignoring the current events.
The disappointment stems from the fact that consumers are primarily concerned with the absolute prices of everyday items, which still remain high. While inflation rates have fallen, the prices of goods have not decreased significantly. The Labor Department consumer-price index in August was 3.7 percent, a significant drop from the peak of 9.1 percent in June 2022. However, the overall increase in the price index for all items was 3.7 percent in the 12 months ending in August, higher than the 3.2 percent increase observed in the 12 months ending in July, according to the Bureau of Labor Statistics.
Consumers have noticed the higher prices at grocery stores and gas stations. On average, a gallon of whole milk in August cost $3.93, nearly $1 or 29 percent more than in August 2019. Similarly, a gallon of regular unleaded gasoline cost $3.84 on average last month, 46 percent higher than four years earlier. Tim Quinlan, a senior economist at Wells Fargo, emphasizes that despite the decline in inflation, prices remain elevated from the consumer’s perspective, which continues to impact consumer confidence.
Joanne Hsu, director of the University of Michigan survey, explains that after a decade of low inflation leading up to the pandemic, consumers are still adjusting to the new normal. They are trying to understand whether their incomes can keep pace with inflation or if inflation will continue to erode their living standards.
Joe Brusuelas, chief economist at RSM, acknowledges that declining prices are not desirable for the economy, but consumers are frustrated that the price level has permanently reset higher. Jayson Lusk, dean of agricultural sciences at Oklahoma State University, suggests that prices for certain food items may decrease if they faced specific setbacks in the industry. However, prices for groceries and dining out are expected to remain elevated due to tight labor markets and the struggle to build staff.
Politicians and economists have voiced their concerns regarding Biden’s economic approach and messaging. Rep. Steven Horsford (D-Nev.) believes that framing the economy should focus on the people, rather than branding it solely under the name of the president. Former spokesperson for Jill Biden, Michael LaRosa, questions the decision to brand the economy when it hasn’t fully recovered yet. Liberal economist James Galbraith highlights that Americans prioritize their own living standards when evaluating the strength of the economy, regardless of the stories presented by the president.
Despite Biden’s attempts to cater to the working-class Americans in his campaign, recent polling suggests that his target audience remains unsatisfied. The NBC poll shows that Biden’s economic approval rating is at 37 percent, with 59 percent expressing disapproval. Republicans hold a substantial lead over Democrats (49 percent to 28 percent) in terms of handling the economy, marking the largest advantage for Republicans in 32 years. Democrats only have a slight advantage (36 percent to 34 percent) over Republicans when it comes to looking out for the middle class, an area where they typically excel.
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