Inflation is starting to look like that unexpected — and unwanted — houseguest who just won’t leave.
And CNBC is reporting that President Joe Biden’s polling numbers are suffering because of it — and it will cost the Democratic Party dearly in the 2022 midterm elections.
For months, many economists had said that a spike in consumer prices, something that had been missing in action in the U.S. for a generation, wouldn’t stay long. It would prove “transitory,” in the soothing words of Federal Reserve Chair Jerome Powell and White House officials, as the economy shifted from virus-related chaos to something closer to normalcy.
Yet as any American who has bought a carton of milk, a gallon of gas, or a used car could tell you, inflation has settled in. And economists are now voicing a more discouraging message: Higher prices will likely last well into next year, if not beyond.
On Friday, the government reinforced that message with its report that the consumer price index soared 6.8% last month from a year earlier — the biggest 12-month jump since 1982.
And the sticker shock is hitting where families tend to feel it most. At the breakfast table, for instance: Bacon prices are up 21% over the past year, egg prices 8%. Gasoline has surged 58%. Furnishing your living room, dining room or kitchen will set you back 14% more than it would have a year ago. Used cars? Up 31%.
And though pay is up for many workers, it isn’t nearly enough to keep up with prices. Last month, average hourly wages in the United States, after accounting for inflation, actually fell 2.4% compared with November 2020.
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Economists at Wells Fargo have joked grimly that the Labor Department’s CPI — the Consumer Price Index — should stand for “Consumer Pain Index.” Unfortunately for consumers, especially lower-wage households, it’s all coinciding with their higher spending needs right before the holiday season.
The price squeeze is escalating pressure on the Fed to shift more quickly away from years of easy-money policies. And it poses a threat to President Joe Biden, congressional Democrats, and their wild spending plans.
Voters aren’t happy about it.
According to a recent CNBC poll, Biden’s approval ratings are in a freefall. Biden’s overall rating on the coronavirus is negative for the first time, 46 percent approval to 48 percent disapproval.
His economic approval dropped even more, with only 37 percent approving of Biden’s job and 56 percent disapproving.
“As bad as Biden’s number may be, the polling data for Democrats in Congress is far worse,” CNBC’s Steve Liesman wrote. “Republicans now sport a historic 10-point advantage when Americans are asked which party they prefer to control Congress, holding a 44%-34% margin over Democrats. That’s up from a 2-point Republican advantage in the October survey.”
CNBC and NBC News polls have never registered such a huge Republican advantage — the largest lead their polls have ever shown was 4 points for the Republican party.
“If the election were tomorrow, it would be an absolute unmitigated disaster for the Democrats,″ Jay Campbell, a Democratic pollster, told CNBC.
The Associated Press contributed to this article