5 economic factors voters are keeping in mind on Election Day


The 5 economic factors voters are keeping in mind when they go to the polls on Election Day

The economy always plays a major role in elections, and this week’s midterm elections appear to be no different, even if these economic times are.

Hear more from this conversation between Leah Askarinam and Matthew Zeitlin:

The midterm elections are often a referendum on the party in power — and how that party has handled the economy. On Election Day, Grid is taking a look at the major economic indicators that voters will take into account.

It’s mostly good news for Republicans, with a couple bright spots for Democrats.

According to a model used by Yale University economist Ray Fair that incorporates growth, inflation, the regular swing against in the incumbent party and the incumbent party’s vote share in the previous presidential election — but omits polling data — Democrats would get around 46.5 percent of the two-party vote in the House of Representatives, which would be similar to how they did in 2010 when they lost 63 seats.


“Right now, I think inflation is the most important indicator for people’s view of [President Joe] Biden and their overall outlook,” John Sides, a political scientist at Vanderbilt University, told Grid. “You can see this in the consumer sentiment numbers, which are (perhaps remarkably) as bad as they were in the Great Recession. That tells me that the bad news created by inflation, and its impact on real personal incomes, is outweighing the good news of economic expansion (GDP) and continued low unemployment.”

Here’s a more detailed look at those economic indicators.

1. GDP growth

This is a weird one. Economic growth was negative in the first half of the year, but the latest report showed over 2 percent annualized growth in the third quarter. Good news for Biden, right? Well, only sort of. The report also showed that underlying consumption and investment growth in the economy has slowed down to a near standstill (although it hasn’t gone negative). The report ended up doing little to assuage fears of an imminent recession.

2. Inflation

This is the big one. No matter how you look at it, inflation is historically high. Overall, it’s running at over 8 percent, slightly off its highs earlier this year, but still, the current bout of inflation is the most severe since the early 1980s. Food prices are up over 11 percent, and energy prices are up by almost 20 percent. Housing prices are up over 6 percent (although this may be a little weird).

3. Real wages

High inflation puts the cost of living in a race with wages. While the latest jobs report showed that average wages had grown 0.4 percent in October and are up about 5 percent over the year, “real” wages, which are adjusted for inflation, have been shrinking on an annual basis since the middle of last year. Real disposable personal income, a similar measure, is down about 3 percent and has been shrinking for a year.


4. Employment

Jobs are the centerpiece of the Biden administration’s economic argument. And here the results are undeniably impressive, although aided by the inevitable bounce back from the 20 million jobs lost in the early days of the covid-19 pandemic. Unemployment sits at 3.7 percent, near its pre-covid lows. In the last year, employment has expanded by over 5 million jobs and has surpassed its pre-covid levels, although it’s still well below the pre-covid trend for job employment growth.

5. Gas prices

This is one that gets a ton of attention. It’s one of the most volatile components of consumer spending, meaning that its ups and downs have a big influence over the change in overall prices paid by consumers. It’s also widely advertised and known in a way few other goods are.

And the Biden administration is obsessed with it.

Whether it’s releasing over 100 million barrels of oil from a series of salt caverns on the Gulf Coast or jawboning oil companies and refineries to keep prices down, the White House knows what the research says: Higher gas prices mean lower presidential approval. And gas prices have come down but remain substantially higher than they were a year ago. According to the Energy Information Administration, the average per-gallon gas price is $3.74, well off its June high of $5 but still above the $3.39 it was a year ago.

But of course, there isn’t one gas price — just like there isn’t one midterm election. In Georgia, the average price is just $3.13, while in Pennsylvania it’s over $4, and in California it’s almost $5.50.

Thanks to Lillian Barkley for copy editing this article.

  • Matthew Zeitlin
    Matthew Zeitlin

    Domestic Economics Reporter

    Matthew Zeitlin is an economics reporter at Grid focused on the domestic impact of major stories such as coronavirus, the supply chain and economic volatility.