How inflation hurts approval
Inflation is undeniably the problem of the hour. Prices are still historically high, and people are still feeling the pinch, when it comes to rent, food, and gas, all the essentials.
President Biden is not doing well on this pressing issue. Even in the wake of the historic Inflation Reduction Act, this still presents significant weaknesses for him and the Democrats as the midterms heat up.
Below, we breakdown how presidential approval changes over time, inflation’s impact on approval, and what this means for Biden.
- Tough spot. President Biden is in a miserable place. Remember the 40-point rule? Approval ratings at 40 percent or better mean the incumbent has a better than 50/50 chance in the next election. Biden is riding right on that line.
- Time hurts. On average, the longer a president is in office, the more his approval rating declines. The honeymoon effect buoys approval countering the stress of a news cycle or presidency. Then time begins to take its toll. Right now, some of the decline in Biden’s approval is the product of time.
- Inflation’s impact.One of the biggest issues on Americans’ minds and a defining issue of the Biden presidency is inflation. It has climbed to historic rates under the president’s tenure. And that has a significant impact on approval ratings. There is a 13-point difference in approval ratings that exist in a low vs. high inflation regime.
- Not performing on the main issue. See how inflation has hurt Biden. The president no longer has any key pillars propping up his approval. On the contrary, the U.S. economy, the main issue for Americans, is a glaring vulnerability. So, can he recover?
- Better News? Many economists predict inflation will be between three and four percent, significantly lower than where we are right now. If that happens, Biden may enjoy a bump in his approval ratings. Though at the same time, even if we account for the average decay in approval ratings, knowing that time hurts approval, it is fairly likely that Biden will land somewhere in the 40s next year. Potentially better for the 2024 presidential cycle but definitely not in time to help for this midterms cycle.
Still, many things can happen between now and then. As the Fed pumps the brakes on inflation, opening the economy up to a recession, new vulnerabilities can emerge for President Biden and complicate the current picture. That said, we believe the downside risk of spiking unemployment is lower than the upside of lower inflation.
