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Higher prices for essentials such as food and housing have left American voters anxious, the latest FT-Michigan Ross poll shows, as President Joe Biden tries to convince them they are better off now than when he took office.
The poll, conducted between February 29 and March 4, finds the bulk of respondents still disapprove of Biden’s handling of the US economy, despite the president’s claim last week that it is “the envy of the world”.
The president can point to official data showing the US grew faster than all of its major rivals last year. But a surge in the cost of living since he took office in January 2021 has led respondents to say they trust his Republican rival Donald Trump more to run the economy.
However, the results also raise the possibility that Biden’s attacks on companies over price increases, as well as his efforts to tackle high housing costs, could help turn the tide before the November election.
Who do Americans blame for high prices?
The March poll shows the economic issue that most bothers the American public, and most risks hurting Biden at the ballot box, is the broad and persistent rises in prices throughout his first term.
Despite the fall in price pressures over recent months, respondents still say inflation is the most important economic issue in deciding how they vote. A big majority — 67 per cent — put inflation at the top of their list, unchanged from January, and more than double any other single issue.
In better news for the White House, they increasingly blame businesses for the higher prices. Sixty-three per cent of voters in the March poll say large companies are taking advantage of inflation to charge their customers more — up from 54 per cent in November. The proportion blaming Democratic policies, meanwhile, has remained constant at 38 per cent.
The tone of the president’s State of the Union address suggests Biden’s team is well aware that voters are increasingly taking notice of companies’ large post-pandemic profit margins.
Along with imposing tax rises, the president vowed to take on companies over “price gouging or deceptive pricing from food to healthcare to housing” and backed Senator Bob Casey’s bill to put a stop to shrinkflation, when companies introduce smaller versions of products while charging the same old price.
Why are housing costs such a big problem?
Soaring global borrowing costs have led to sharp falls in housing prices from New Zealand to Sweden.
Not so in the US, where prices have risen 30 per cent in nominal terms since Biden took office. Rents have surged too.
The March FT-Michigan Ross poll shows housing costs remain the second most important economic issue after inflation in determining how people will vote on November 5, with 30 per cent of respondents listing it as one of their biggest concerns. They are having a big impact on many respondents’ financial situation. About a third list rent or mortgage payments as being the biggest source of financial stress — ranked fifth overall after food, household supplies, gas and utilities.
Biden has promised homebuyers a tax credit worth up to $400 a month for the next two years — though such a measure would require congressional approval.
Many economists also think the problems are down to a chronic shortage of new homes — an issue that cannot easily be solved a little more than half a year out from an election, no matter how much “red tape” Biden cuts. The biggest determinant in making buying a house more affordable in the short-term also lies out of the administration’s control — the pace and speed at which the Federal Reserve cuts rates from their 23-year high of 5.25 to 5.5 per cent.
Are Americans willing to fund military aid?
Biden kicked off his State of the Union address by condemning Russian President Vladimir Putin over Moscow’s invasion of Ukraine — a savvy move designed to make Republicans in the audience, many of whom are at odds with Trump over Russia, squirm.
Biden’s calls for more aid for Ukraine are increasingly proving less controversial with voters, too.
In November, 55 per cent of respondents said the conflict was costing the US too much — against 34 per cent that said it was either not spending enough, or was the right amount. In the March poll, the margin against is smaller, with 46 per cent saying Biden is spending too much, against 35 per cent falling into the latter camp.
There was also a slight jump in the number of respondents who think Israel is receiving too much aid, to 43 per cent from 40 per cent over the previous three months.
Biden has been criticised by some in his own party for not doing enough to stop the humanitarian crisis in Gaza, but relatively few respondents nationally list the war as one of the most important determinants of how they will vote.
Just 8 per cent list US policy towards Israel and Gaza as one of their three most important issues in picking the next president. The proportion listing US policy towards Ukraine and its war with Russia is lower still, at 7 per cent.
Data visualisation by Oliver Roeder in New York
Source: Economy - ft.com
