Rachel BarberUSA TODAY
Inflation—you know it, and you definitely don’t like it. According to Americans polled in a Pew Research Center report last year, it is the nation’s top problem.
Frustration withinflation is mutual across the political aisle, with 77% of Republicans and 52% of Democrats calling it a “very big problem,” according to the report.
Inflation, which hit a 40-year high of 9.1% in June 2022, has since slowed down significantly. However, it remains a concern for Americans as prices for mortgages, groceries, car insurance, and transportation have become volatile and more expensive.
Economic research has shown that the economy generally does better under Democrats than Republicans but that inflation is constantly in flux, and its causes are often difficult to track.
Presidents have limited control over inflation, but it can still affect their election performance. Incumbents are usually favored when the economy is strong and challengers when there is perceived weakness.
More: Federal Reserve March meeting: Rates hold steady; 3 cuts seen in '24 despite inflation
What is inflation?
Inflation, in basic economic terms, occurs when prices rise and money loses value due to an increase in the money supply, allowing more consumer purchases.
In the United States, inflation is usually measured using the Consumer Price Index (CPI), which tracks variations in prices typical consumers pay for things like food, housing, and cars.
According to the CPI,overall prices rose 3.2% from a year earlier in February, slightly up from 3.1% in January.
The average year-over-year inflation rate was 1.4% under President Barack Obama and 1.9% under President Donald Trump. Under President Joe Biden, it is 5.7%.
According to the U.S. Bureau of Labor Statistics (BLS), supply-chain disruptions and shocks to food and energy prices“contributed substantially” to the sharp rise in inflation during and following the COVID-19 pandemic.
More: How soon will the Fed cut interest rates? Inflation report this week could help set timing
Perception and experience of inflation differ
Inflation expectations and the severity of inflation’s consequences depend on who you ask.
According to a 2023 Brookings report, consumer inflation expectations are influenced by the political party in power. In particular, Republicans tend to expect higher inflation when Democrats are in the presidency, while Democrats expect higher inflation when Republicans are in control. This partisan gap has flipped once again with Biden’s election.
The report attributes the change in consumer expectations to voters’ association of “good times” with periods of low inflation.
Individual experiences with inflation also differ because the price of some goods rises while others fall. For example, the cost of buying a car skyrocketed during pandemic lockdowns. However, consumers who already had cars or didn’t drive weren’t impacted. However, the cost of food and groceries is felt by everyone.
Is inflation better under Democrats or Republicans?
American Economic Association researchers concluded thatfrom 1945 to 2016, the average inflation rate was lower under Democratic presidents than under Republicans, but inflation oftenfalls under Republicans and rises under Democrats.
The same researchers also conclude that these performance gaps are due to factors like supplyshocks, consumer expectations, and foreign economic growth, which “might be considered blends of good policy and good luck.”
For as long as the BLS has kept track, CPI data implies something similar. The highest year-over-year inflation rate (9.9%) happened under Democrat Jimmy Carter. The lowest year-over-year inflation rate (1.4%) happened under Democrat John F. Kennedy.
The second highest year-over-year inflation rate (8%) occurred under Republican Gerald Ford, and the second lowest (1.4%) was under Republican Dwight D. Eisenhower.
Rachel Barber is a 2024 election fellow at USA TODAY,focusing on politics and education. Follow her on X, formerly Twitter, as @rachelbarber_
