2024-11-06 21:51:00
Donald Trump‘s victory in the American presidential election was largely driven by the inflation which has affected the United States since 2021. But paradoxically, the Republican billionaire’s economic program could cause prices to rise again.
Eggs, gas at the pump, insurance,… Americans have seen prices rise a total of 20% since Joe Biden took the reins of the White House in January 2021.
The Republican opposition even nicknamed this inflation “Bidenflation”.
Among voters, 9 in 10 say they are very or somewhat concerned about the cost of food, and about 8 in 10 are concerned about the costs of their health care, housing and gasoline, according to an AP VoteCast poll, conducted with more than 120,000 voters across the country and published Wednesday.
During the campaign, Donald Trump continually promised to put an end to this inflation, waving the red flag of prices which would remain high if Kamala Harris was elected.
And his speech resonated with voters.
– “Frustration” –
However, inflation has fallen sharply, since its peak of 9.1% over one year in June 2022. In September, it even fell to 2.4%, the lowest since February 2021.
“People always see inflation as a problem because they don’t think about the rate from one year to the next like economists do, but about price levels,” points out Bernard Yaros.
“Consumers continue to express a form of frustration with high prices,” said last month the director of the University of Michigan survey measuring consumer confidence, Joanne Hsu.
With a wallet depleted by rising prices, essential expenses are taking over, to the detriment, for many households – particularly those on low incomes – of going out to restaurants, shows, vacations, etc.
“People may be upset by the fact that basic necessities take up a much larger share of their household budget,” underlines Bernard Yaros.
And the fact that wages are now rising faster than inflation doesn’t change that, because workers see it “as something they’ve earned,” and “focus on what’s been taken away from them.”
– Sprinkler-watered –
This inflation, never seen since the episode at the end of the 1970s and the beginning of the 1980s, had been pushed by the global difficulties linked to the end of the Covid-19 crisis. Then fueled by the generous aid and investment plans voted for by the Democratic president.
Treasury Secretary Janet Yellen, at the time, defended an economic policy that above all helped avoid much greater economic damage and a rapid recovery.
American growth is in fact much more solid than that of European countries, for example.
But Donald Trump could find himself on the receiving end, because protectionism and the generalized increases in customs duties that he intends to apply risk causing inflation to restart.
If Donald Trump implemented all the promised tariff increases, “we estimate that it would add about 1.3 percentage points to US inflation in the first year,” according to UniCredit economists.
Then “the effect on inflation would quickly attenuate, while the impact on GDP would be around 0.6% cumulative over a few years,” they add.
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**Interview with Bernard Yaros, Director of the University of Michigan Consumer Sentiment Survey**
**Interviewer:** Thank you for joining us today, Bernard. With the recent election results and Donald Trump’s promises to tackle inflation, what do you see as the biggest concerns for voters regarding their economic situation?
**Bernard Yaros:** Thank you for having me. The primary concern among voters is undoubtedly the rising cost of living. A recent AP VoteCast poll shows that a staggering 90% of respondents are worried about food costs, with similar concerns across healthcare, housing, and gasoline. Despite the drop in inflation rates over the past year, the perception of high prices remains a key issue for many Americans.
**Interviewer:** You mentioned that inflation has decreased significantly since its peak in June 2022. How do you think this will affect voters’ sentiments as we move forward?
**Bernard Yaros:** While it’s true that inflation fell to 2.4% in September, which is the lowest since early 2021, many consumers still focus on the general price levels rather than the specific rate changes. This disconnect means that the frustration with high prices persists. Even though we’ve seen some improvement, the lingering effects of previous inflation remain fresh in voters’ minds.
**Interviewer:** Trump’s campaign has framed the current inflation as “Bidenflation.” How has that narrative influenced voter perception?
**Bernard Yaros:** The branding of inflation as “Bidenflation” has certainly resonated with segments of the electorate. It taps into the frustrations stemming from high prices over the last few years. This narrative has helped Trump rally support, but it also raises questions about how effective his economic policies will be in truly lowering prices if he were to implement them again.
**Interviewer:** Given that Trump’s economic program could potentially lead to another rise in prices, what advice would you give to voters as they think about their economic priorities?
**Bernard Yaros:** I would advise voters to stay informed and critically evaluate the economic policies being presented by candidates. Understanding the complexities of economic indicators like inflation and how they relate to everyday expenses will empower voters to make better decisions. It’s essential to consider not only the promises made during campaigns but also the potential outcomes of those policies.
**Interviewer:** Thank you, Bernard. Your insights help clarify the intricate relationship between inflation perceptions and voter behavior going into the 2024 elections.
**Bernard Yaros:** Thank you for the opportunity. It’s an important topic, and I hope voters will continue to engage with these issues thoughtfully as we approach the election.
