Usually, American presidents dream of a historically low unemployment rate, but for Joe Biden, a tight labor market is also synonymous with worrying inflation, which could cost the Democratic Party dearly. Joe Biden’s popularity has plummeted in recent months due to inflation even as the unemployment rate has gradually fallen. “Politically speaking, nothing else matters” but rising prices, said Charlie Cook, founder of Cook Political Report, a popular political newsletter.
Inflation hit a 40-year high of 8.5% year-on-year in March, from 7.9% in February, according to the consumer price index (CPI) released on Tuesday. Job growth is a traditional measure of presidential success, however, and the White House has tried to draw public attention to progress in the job market. Weekly jobless claims are at a five-decade low and the jobless rate is nearly back to pre-pandemic levels.
A price increase not seen for forty years
But, as Charlie Cook points out, these arguments have failed to win over public opinion as a spike in consumer prices not seen in four decades affects gasoline, food, rents and other expenses. Joe Biden’s approval ratings now hover around 42.2%, according to polling aggregator FiveThirtyEight. With the midterm elections seven months away, there are growing expectations that elected Democrats will lose their slim control of one, or possibly both, houses of Congress.
“High prices are keeping Americans from feeling the Biden boom,” said Will Marshall, president of the Progressive Policy Institute, a center-left-ranked research center. Joe Biden took office at a time when unemployment was on a downward trajectory after climbing to 14.7% at the height of the pandemic, after companies laid off workers en masse when Covid-19 broke out. Under his tenure, the jobless rate has fallen steadily throughout 2021 and reached 3.6% last month, a hair’s breadth from its pre-pandemic level.
But with consumer prices climbing at the strongest pace since late 1981, the Biden administration is struggling to make the case for labor market progress.
A singled-out president
Polls show that Americans are pointing the finger at the president. Nearly two-thirds of Americans disapprove of Joe Biden’s handling of the economy, according to an Associated Press-NORC Center for Public Affairs Research survey released late last month. Meanwhile, according to Navigator, a progressive polling firm, more Americans believe the economy is losing jobs than gaining them. The high inflation rate is the result of global component shortages, the long-running low interest rate policy of the US Central Bank (Fed), and fiscal stimulus that has inflated US consumer demand.
But the administration of Joe Biden has also had missteps in its priorities with Congress, underlines Will Marshall. While he won support from both political sides to renew the country’s infrastructure, the Democratic leader failed to get Congress to pass Build Back Better, a sweeping plan to overhaul social services. “Over time, the boiling labor market should be an advantage for the president,” said the expert. “But right now people aren’t making those connections and inflation is part of the problem.”
To stem this rise in prices, the Fed is raising interest rates, and many economists believe that the inflation peak will flatten as the year progresses. But not sure it’s coming soon enough for Joe Biden. His two predecessors in the White House saw their parties lose control of the House in the first midterm election. And Joe Biden could suffer the same fate, predicts Charlie Cook. “Are we really going to see a significant reduction in inflation by the start of voting between late September and October? I don’t think that’s realistic at all,” he warned.
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