Voters worried about the economy

This election season, voters are laser-focused on one big issue: the economy. Americans rate inflation as the most important problem facing the US, followed by jobs and the overall economy, an October Ipsos/Reuters poll found.

Over the past year, Americans have aimed to get back to eating out, traveling and enjoying in-person events, which became scarce in the early days of the Covid-19 pandemic. But skyrocketing prices for everything from eggs to airfare, as well as uncertainty about the future, dampened many of the plans.

Voters may be divided on many issues, but they all seem to agree that money and how government affects it needs to be addressed. When asked what single message voters hope to send their votes to politicians this year, the answers related to No. 1 to “do more and more efficiently” and “fix the economy and lower the cost of living,” the NBC News poll found. .

With that in mind, here’s a look at three of the main economic issues facing the US right now.

1. The rising cost of living

The consumer price index standing comfortably at 40-year highs frustrated consumers and pinching pennies to make ends meet. It’s hard to find places to cut back on rising prices for essentials like gas and groceries.

Workers have seen huge wage gains over the past year, with hourly earnings up 5% in September from a year earlier. Still, that’s not enough to keep up with inflation.

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The aim of the Federal Reserve’s rate hikes is to bring inflation under control. Meanwhile, voters want to see Congress and the White House step in.

Change in personal income has historically been one of the most reliable predictors of elections, says Stephen Ansolabehere, a professor of government at Harvard and an expert on elections and politics.

“Even though incomes are going up, inflation is going down in real terms. That’s what’s hurting the Democrats,” Ansolabehere tells CNBC’s Do It. “Whether inflation is something the administration did, that’s not what the voters care about. It’s more about, ‘Am I better off?'”

2. The possibility of a recession

Although there are bright spots like low unemployment and a regression of gross domestic product (GDP) shows some resilience in facing a coming recession, voters and experts are not optimistic about avoiding one altogether.

Bloomberg economists recently pegged the probability that the US will enter a recession within 12 months at 100%. And less than a third of voters expect the economy to improve in the next year, according to a CNBC poll.

Layoffs have not yet spread through the job market. Likewise, 91% of CEOs expect a recession in the coming year, according to a KPMG survey of 1,325 CEOs between July 12 and August 24, 2022. And 52% of CEOs said conditions in their own industries were worse at the beginning of the year. the fourth quarter, a survey by the non-partisan think tank The Conference Board found.

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Despite reports administration officials were beginning to explore recession response plans earlier this month, Biden said celebrate the third quarter GDP reports and Republicans argued that the Republicans would try to cut that progress short.

The Fed continues to raise interest rates in an effort to curb inflation, but those rate hikes could push the United States into a recession if demand is too much for higher borrowing costs.

Even if the Fed is technically to blame for plunging the country into recession, voters will likely look to their elected leaders for solutions.

3. The volatile stock market

The stock market is not a complete picture of the economy, but its performance certainly matters to voters. Seeing their portfolios grow and pandemic recovery efforts take a toll on them, just getting on with it and staying volatile through 2022 is a lot consumers rethinking retirement plans and worried about their future.

The stock market will remain up and down until there is a clear idea of ​​what the government is doing, says Harvard’s Ansolabehere. Tax reform and changes in funding for social programs like food stamps and Medicare can affect consumer budgets and lead to more market uncertainty.

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“There are things that Congress should not do, and things that they can do in terms of creating a more stable situation,” says Ansolabehere. “What Wall Street wants is certainty. They want to be able to anticipate what Congress is going to do with budgets and taxes.”

Finding that stability can be challenging. If the Democrats lose the House, Congress could be preparing for another round of debt ceiling tensions that could threaten to shut down the government or force the country to default on its debt, reports the Washington Post.

The war in Ukraine, another surge of Covid and climate change could slow or reverse progress toward a full economic recovery, where prices come back down to earth and when your 401(k) isn’t so much checking. But it is up to the voters to decide who is best to handle these issues.

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