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Inflation in the United States reached 8.2% in one year, a level never reached in almost 40 years. This is one of the strong issues of the midterm elections in the United States, the midterms, and this remains one of the major concerns of Americans. According to the Center for American Political Studies (Harvard/Harris), 37% of Americans put inflation at the top of their current priority.
The Republicans were not mistaken and campaigned on the theme of high cost of living, while Joe Biden, for his part, highlighted the major projects he has launched over the past two years. These are two discourses and each has its raison d’être.
To fully understand, we must put ourselves in the context of the previous election: two years ago, Joe Biden, had posed as a defender of the middle class, facing Republicans whom he depicted as being part of the haves. . This discourse, which was able to mobilize for a time, is today inaudible in a context of very high inflation.
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A few figures: food prices have increased by 13.5% in one year. The additional monthly cost linked to inflation, that is to say what each American household must spend more each month, if it wanted to return to its standard of living of January 2021 – date of the arrival in power of Joe Biden – is $728 on average, according to the Congressional Economics Committee.
These losses in terms of purchasing power have of course influenced the vote, with Americans having more confidence in the Republicans to curb this inflation and to restore color to the economy, as confirmed by the CNN poll, 71% of Americans consider Republicans more likely to tackle inflation, versus 18% for Democrats.
Half-hearted growth
However, the American economy is not doing so badly. The United States recorded a quarter of growth between July and September, with +2.6% at an annualized rate. As for the job market, he still displays iron health. According to the latest October figures, private employers created 261,000 jobs last month, much more than in September, and much more than expected. And Joe Biden can claim 10 million jobs created since entering the White House.
But these figures are misleading, in reality, this growth in American GDP is largely explained by the good performance of the external balance: the United States has reduced its imports, and there is a sharp increase in hydrocarbon exports. For its part, consumption, the main driver of the economy, only increased by 1.4 points, investment, for its part, fell by 8.5%. And everyone is talking about a coming recession.
The US central bank is trying to achieve a soft landing, with a rate hike that it wants to control, to overcome this inflation without weighing down the economy. But the effect on inflation will take months to arrive and the slowdown in the American economy seems inevitable in this bullish context.
The ” Bidenomics ” in question
During these two years of mandate, Joe Biden has nevertheless made major progress, in favor of the working classes, to lower the price of drugs, reduce student debt, or even revive industrial employment… The American president can thus boast of several victories in Congress, including the vote of Chips Act which will allow the establishment of several giga-factories of semiconductors in the United States, bringing industrial jobs back to the country.
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As for theInflation Reduction Act, voted very recently, it is the largest investment ever decided in the fight against climate change, ie 370 billion dollars for the construction of wind turbines, solar panels and electric vehicles. All with a key tax credit: up to $7,500 granted to households, reserved for the acquisition of an electric vehicle coming out of a North American factory with a locally manufactured battery, unheard of. .. And an interventionist policy of all-out spending that now has a name, “ Bidenomics which could well cost the Democrats a few seats in these midterm elections.
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