Poll: Incomes are up, but Americans focus on inflation |
WASHINGTON (AP) – Americans’ overall income has accelerated since the pandemic, but so has inflation – and a new poll finds many more people are noticing higher prices than wage gains.
Two-thirds say their household costs have increased since the pandemic, compared with only about a quarter who say their incomes have increased, according to a survey by the Associated Press-NORC Center for Public Affairs Research. Half say their income has stayed the same. About a quarter say their income has gone down.
The rapid rise in prices that has exploded in the economy has forced many Americans to change their spending habits. About a third say, for example, that they drive less often, and about 3 in 10 Americans say they buy less meat than they usually do. In the past year, gasoline prices have jumped nearly 50% and the cost of meat has increased 15%.
Most people say the sharp rise in the prices of goods and services over the past few months has had at least one minor effect on their financial lives, with around 4 in 10 saying the blow has been substantial. The poll confirms that the burden has been particularly heavy on low-income households.
When the government releases its final reading on consumer prices on Friday, it is expected to report that inflation climbed 6.7% in November from a year earlier, according to economists interviewed by data provider FactSet . That would exceed the 6.2% year-over-year increase in October and mark the highest rate of consumer inflation in nearly four decades.
The results of the AP-NORC poll underscore the financial pressures that this year’s spike in inflation has placed on the finances of many Americans. Yet, as they have done since before the pandemic hit in March 2020, a majority say their own finances remain good.
Still, many Americans have weighed on the economy over the past year, even though most economic indicators point to a still-stable recovery, with near-record job openings, solid retail spending and a rebound in the economy. manufacturing sector. Only about a third say the economy is “good”, compared to about half who said so in March. This may illustrate why President Joe Biden has not benefited politically from positive readings on the economy.
The poll, however, finds a clear partisan divide: only about 1 in 10 Republican describes the economy as “good”; more than half of Democrats say so. Yet when asked about their own financial situation, people are more positive and less divided across parties. About two-thirds of Americans say their personal finances are in good shape. About 7 in 10 Democrats and about 6 in 10 Republicans say so.
Analysts generally expect the economy to grow rapidly at 7% per year in the last three months of this year, propelling growth for all of 2021 to its fastest calendar year pace. since 1984. The unemployment rate fell to 4.2% from 6.7. % one year ago. And with many employers struggling to hire, the economy still has nearly 4 million fewer jobs than before the pandemic.
US households are earning higher incomes on average than before the pandemic. Wages and salaries rose 4.2% in September from a year earlier, the largest annual increase in two record decades. And the government provided a stimulus check of $ 1,400 to all households in March as well as an unemployment assistance supplement of $ 300 per week from March to September. Most households with children began receiving the $ 300 monthly child tax credit in July.
These government measures, combined with higher wages, increased overall U.S. household incomes by 5.9% in October from a year earlier. Yet inflation jumped to 6.2% that month, the highest figure in three decades, reversing the rise in incomes.
Jason Furman, former senior economic adviser to President Barack Obama, has suggested that many people don’t think about government payments, such as stimulus checks, when considering their own income because those payments are usually windfall profits.
A likely factor in Americans’ concerns about inflation is that the rise in prices has concentrated in highly visible categories: the poll finds that 85% of them say they have paid higher prices than usual for the food and gasoline over the past few months. Almost 6 in 10 say the same about electricity. About 4 in 10 people say they bought household appliances recently and the prices were higher than normal.
The effect is even more pronounced among middle- and low-income Americans: half of people living in households earning less than $ 50,000 a year say the price increases have had a major impact on their finances. Only a third of people living in households earning more than $ 50,000 say the same thing.
The AP-NORC survey of 1,089 adults was conducted December 2-7 using a sample drawn from the AmeriSpeak probability-based NORC panel, which is designed to be representative of the American population. The margin of sampling error for all respondents is plus or minus 4.1 percentage points.