“Are you in a better financial position now than you were four years ago?”
Every incumbent president seeking re-election faces this crucial question.
It appears that Kamala Harris, as the de-facto incumbent, did not pass this test.
According to Statista’s Felix Richter, 46 percent of voters in key states reported that their families were worse off now compared to four years ago, the highest percentage ever recorded in presidential exit polls. But is this perception accurate, or are we witnessing what some economists refer to as a “vibecession,” where the economy is actually performing well despite negative perceptions?
Although the U.S. economy has weathered the inflation crisis relatively well, with strong growth, low unemployment rates, and high stock prices, many American households have not experienced the same level of prosperity.
Or at least, that’s how it has felt for many.
The primary issue with inflation is its direct impact on consumers’ wallets.
During periods of high inflation, when prices rise faster than nominal wages, real wages decrease, resulting in a decline in purchasing power for workers.
From April 2021 to April 2023, average real hourly earnings declined for 25 consecutive months on a year-over-year basis during the current inflation crisis. However, in May 2023, real wages began to increase once again as nominal wage growth outpaced inflation, as is typically expected.
By examining cumulative wage growth and price increases since November 2020, we can attempt to answer the question of whether Americans are better off now than they were four years ago, and the answer is: not really.
You can find more infographics at Statista
Between November 2020 and September 2024, nominal wages have increased by 19.2 percent overall.
However, during the same period, consumer prices have surged by 20.6 percent, effectively negating any wage growth and leaving real wages 1.1 percent lower than they were four years ago.
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