Tue. Jul 23rd, 2024

Heading into the first 2024 presidential debate are you better off than you were four years ago?

By 37ci3 Jun25,2024



Ahead of the first presidential debate, both President Joe Biden and former President Donald Trump urged voters to ask themselves the question Ronald Reagan made famous: Are you better off than you were four years ago?

With the economy among the top issues for voters, each candidate uses their own data points to create a favorable economic picture of their time in office. But for many voters, the answer will vary greatly by geography, occupation, age, race and lifestyle — not to mention the political lens through which each candidate is viewed.

Hourly workers, especially those in food service and hospitality, have seen significant wage gains to offset inflation. But retirees and full-time caregivers have not benefited from a strong job market. Homeowners saw their wealth increase amid rising home prices. But potential buyers had to contend with rising rents and interest rates. White families benefited the most from record stock prices, compared to Black and Hispanic families who invested less in the stock market.

“It all depends on where you sit,” said Julia Pollak, chief economist at ZipRecruiter. “Income inequality narrowed, wealth inequality widened. Wages rose for low-wage workers, but stagnated for many white-collar workers.

But while it’s not a story about the U.S. economy, NBC News looked at several key categories that directly affect households to show how those indicators have changed in recent years and how they might influence voters.

Salary

Over the past year, wages have begun to rise faster than prices after nearly two years of consumer spending seeing their purchasing power erode as inflation rose faster than wages.

Consumers now have the same purchasing power they had four years ago, rather than seeing real income growth during this period, which will help shore up their finances.

Since the start of the pandemic, prices, as measured by the Consumer Price Index, have risen by about 21%, and wages have risen by just over 22% during that time. according to to federal information. While consumers have made up some ground, the roughly 1% inflation-adjusted wage increase that consumers have seen over the past four years is what they would typically see a year before a pandemic, Pollack said. For many workers, the pay rise allowed them to keep up with their expenses rather than improving their lifestyle or feeling like they were getting ahead financially.

Some workers, particularly those in leisure and hospitality, saw the biggest wage gains, with larger gains than others, while white-collar workers and managers were least likely to see their wages keep pace with rising prices.

“Wages are finally outpacing average inflation in two years,” said Joseph Davis, global chief economist for Vanguard. “This is good news, so the economy continues to expand. But I think where the tension lies is that wages are not rising at the same rate across the income spectrum.”

Works

Helping to drive these wages up has been a historically strong job market, where demand from employers outstrips the supply of people willing or able to do these jobs. The unemployment rate It fell to 4% in May, the lowest in more than five decades, after falling from 6.4% when Biden took office to 3.4% last year. During Trump’s four years in office, unemployment also fell steadily to 3.5% before rising to around 15% during the pandemic.

About 1.5 jobs are open for each applicant. The strongest hiring was in healthcare, retail, transportation and warehousing. Construction also saw a hiring boom from billions of federal dollars for infrastructure, clean energy and semiconductor projects.

But there are signs that labor leverage is weakening work places Pollack said there has been a decline since 2022.

“Recruiting is pretty slow,” Pollack said. “If you don’t have a job or if you have a job you don’t like, it’s a tougher job market because there’s less hiring.”

The outlook for the job market also varies by race, with the unemployment rate at 5.6% for Black workers and 5% for Hispanic workers.

Apartment

Although unemployment is historically low and wages have risen over the past year, housing remains one of the biggest economic pain points for consumers renting or trying to buy a home.

According to NBC News, the affordability gap — an estimate of the difference between an area’s median household income and how much income is needed to cover the payments on a median-priced home in that area — is near a 10-year high in the United States. analysis from housing data.

According to NBC’s analysis, a family earning the local median income will be able to afford a home in more than 60% of counties nationwide. Five years ago, when Trump was in office, just over 90% of these typical households would have been able to afford a home.

“Wage growth has not been growing at the same rate as the median home price over the past two years,” Davis said. “So even though the job market is tight, homebuyers are losing ground there. That’s why affordability is really low, affordability for a new home for first-time homeowners is at an all-time low.

Since the start of the pandemic, rents have risen 31% to an average of about $2,000 a month. according to to Zillow. The average household spent just over 29% of its income on rent in April, down from less than 28% before the pandemic.

While rising interest rates and home prices are negative for homebuyers, homeowners have seen their net worth rise from higher home valuations.

But for some homeowners, other housing-related costs are also on the rise. There are insurance rates increased At an average of 23% since 2023, homeowners in Nebraska, Colorado and Arizona are seeing some of the biggest increases. Higher home values ​​can mean higher property taxes for homeowners.

Food

With typical household expenses 11% Consumers have food at their disposal he said The rise in grocery prices has had a particularly painful impact on their budgets. Food prices have risen nearly 25% over the past four years while Biden has been in office. Although prices will not increase as much as in 2022, they will continue to rise.

Prices at grocery stores rose 1.1% in April from a year earlier, and restaurant meals rose 4.1%, according to Labor Bureau statistics. Rising food prices have disproportionately affected low-income families, who spend about a third of their discretionary income on food. according to 2022 to the request of the Department of Agriculture.

While price increases have slowed and some products are off their peak, prices for many staples are still well above pre-pandemic levels. A pound of ground beef went from $3.87 before the pandemic to $5.15 in May, a pound of pork went from $5.50 to $6.81, 10 eggs went from $1.50 to $2.70, bread went from $1.38 to 1 , rose to $97. a gallon of milk rose from $3.20 to $3.87 data From the Federal Reserve.

But there are some signs that prices may begin to fall more broadly. Major retailers and restaurant chains have announced their latest price cuts, including Walmart, Aldi, Target, McDonald’s and Applebee’s.

The Biden administration argued that these higher prices were offset by increased wages, particularly for hourly workers. Analysis of the White House this month he said for the average non-managerial worker, it now takes the same number of hours to buy a typical grocery basket as it did in 2019.

Gas

Gas prices are an ever-present indicator of the economy every time consumers drive through a gas station or fill up their tank. Consumers were hit by a rise in gas prices after Russia’s invasion of Ukraine in 2022 rocked energy markets. medium a gallon of gas up to $4.62. Prices have averaged $3.42 over the past two years as of June 17, down 12 cents from a year ago and the lowest since 2021.

But average prices are still higher than pre-pandemic levels in February 2020, when a gallon of gas was around $2.45.

GasBuddy’s head of oil analysis, Patrick De Haan, said the main factor keeping prices above pre-pandemic levels is production cuts from OPEC, the Organization of the Petroleum Exporting Countries.

Offsetting OPEC’s output tightening is pumping a record amount of oil in the US. Despite the Biden administration’s call for a shift away from fossil fuels, U.S. oil production has hit record highs over the past year. It surpassed the previous record set in 2019.

Prices typically peak in the spring, when refineries are being repaired, and should continue to decline throughout the summer unless a hurricane disrupts refinery production.

“If we can get through this summer without any major events, then prices will potentially continue to accelerate a little bit lower. Of course, this is subject to OPEC’s policy not changing,” said De Haan. “Usually, gas prices drop in the fall as well as in the spring. There will be plenty of conspiracy theorists on both sides of the aisle saying, “oh, it’s because of the election.” But they failed to remember that it is the economy that controls prices and the balance of supply and demand.”



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By 37ci3

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