Can we make America feel more affordable?
Americans want prices to actually go down, not just to rise more slowly. Making that happen will be tough.
Americans are upset about the economy. And what are they upset about? Affordability. On polls about America’s most important problem, the cost of living consistently comes in ahead of other issues like inequality, deficits, wages, and unemployment. Here’s the latest from Echelon Insights:
Trump’s approval rating on inflation is lower than for most other issues:
If you’re an economist, this might strike you as a bit odd, because inflation itself is still fairly low, and around 2.7%:
Alternative measures are even lower.
And real wages — i.e., how much an hour of work can buy for the average worker1 — are rising strongly again, after falling in 2021-22:
Of course, lots of regular people don’t trust official statistics. But regardless of whether they rely on government numbers, people’s own inflation expectations are falling, and yet the percent of Americans who blame high prices for their poor personal finances is still near record highs:
Note that for decades, these two numbers tracked each other very well. But in the years since the pandemic, anger at the cost of living has become unmoored from how much people think the cost of living is actually rising.
That’s strange, right?
