(The Hill) – The first debate between Vice President Harris and former President Trump is likely to be more heated than post-pandemic inflation, which has become a central issue in the upcoming presidential election.
The Trump campaign team has repeatedly blamed Harris and President Biden, who dropped out of the race in July, for high inflation as the country recovers economically from the Covid-19 pandemic.
Inflation peaked at 9 percent in July 2022, and although annual inflation eventually fell less than 3 percent In July, Americans felt the effects of higher prices and borrowing costs, which ate into the savings they had built up during the pandemic.
Harris and Biden have sought to highlight their administration’s role in the economic recovery, its efforts to combat price gouging and its legislative successes such as the Inflation Control Act. Biden trails Trump in polls on his handling of the economy, but Harris’ poll numbers are mixed.
Trump was (*4*)leads the Vice President 2-to-1 on the economy in the CNBC All-America Economic Survey released last month. But a survey by the Financial Times and the University of Michigan Ross School of Business released a few days later found that Harris a slight lead The respondents were convinced which candidate would handle the economic situation better than Trump.
With all the partisan rhetoric on the economy set to play out Tuesday night, keep an eye on these four numbers.
Inflation: 2.9 percent
The Consumer Price Index (CPI) is a general measure of the prices of goods and services in an economy. The rate at which it increases each year, along with other similar measures, is colloquially known as inflation.
The Federal Reserve tries to keep inflation at 2 percent annually because a little inflation is generally considered a good thing and indicates resilient economic activity. But if inflation rises significantly above 2 percent, it is a problem because the money households are bringing home may not match their usual spending.
This happened in the wake of the pandemic, following economic shutdowns when labor and materials were rare. Prices began to rise due to increased input costs, and then some companies used these cost increases as a cover to further augment their margins. The extent to which this margin expansion reflects a up-to-date psychological norm for consumers is debated by economists. Some say fewer purchases could be a good way for consumers to fight back.
While “inflation” is always a bogeyman in political discourse and politicians try to employ it to their advantage, it is not correct to attribute it to a single economic factor. The rise in inflation from 2021 to 2022 was global in nature and can really only be attributed to the pandemic itself. Since 2022, inflation in the consumer price index has fallen to an annual rate of 2.9 percent, which, while still elevated, is becoming less noticeable.
GDP growth: 3 percent
Gross domestic product (GDP) is the total economic output. It is like the profit margin of the entire economy when viewed as a business. More specifically, it is the value of what is bought, invested, spent by the government, and exported to other countries.
The U.S. economy is booming as it recovers from the pandemic, which likely explains some of the inflation it has experienced. The economy grew as much as 17 percent annually in the second quarter of 2021, still above the longer-term trend for the decade ending in 2020, which is about 5 percent annual growth on a seasonally adjusted basis. In the second quarter of this year, GDP was 5.9 percent by that particular measure.
Voters and consumers don’t “feel” GDP in the same way they feel the price of things or the level of their salary. However, a positive overall performance of the economy can lead to decent wages and good employment levels. The average hourly wage for non-managerial workers has increased by 25 percent since 2020, while the consumer price index has only increased by 20 percent.
Unemployment: 4.2 percent
The unemployment rate is the number of unemployed divided by the number of employed people. Currently, about 7.1 million people are unemployed, out of a total of 168.5 million people who make up the civilian labor force.
This puts the unemployment rate at 4.2 percent, which is low in absolute terms, although it has risen slightly since its recent low of 3.4 percent in April 2023. Unemployment as a data point is characterized by great inertia, meaning that once it starts to rise, it can be complex to snail-paced it down again.
This fear was present in July, when the unemployment rate rose to 4.3 percent, triggering a previously reliable recession indicator and stoking fears of an impending recession. But in August the rate fell again to 4.2 percent, suggesting that unemployment has fallen below its historic low but is not rising.
National debt: $35 trillion
National debt has risen since the early 2000s and in recent years has entered up-to-date territory that puzzles economists and politicians of both parties. on the edge.
National debt exceeded $35 trillion for the first time in July, eight months after blow past the $34 trillion milestone and almost a year after crossing the $33 trillion mark.
It is ready over 50 trillion dollars by 2034, according to bipartisan forecasters at the Congressional Budget Office (CBO).
The CBO estimates Main drivers The augment in national debt in the coming years will be due to Social Security and government health programs such as Medicare. the Republican And Democratic Party Platforms The no-cut pledge and interest payments are set by the politically independent Fed in line with its mandate to keep inflation at two percent year-on-year and to ensure maximum employment.
The country’s growing debt, coupled with partisan disputes over the debt ceiling and “a steady deterioration in government standards over the past 20 years,” prompted the rating agency Fitch to issue the following Downgrade of US credit rating last summer. Moody’s, another ratings agency, changed its outlook for U.S. government debt to “negative” from “stable” last fall, citing the costs of high interest rates and political polarization.
