Hey stupid, it wasn’t just the economy. It was inflation

U.S. presidential elections are all about “the economy, stupid”, said Bill Clinton’s strategist James Carville in 1992. And for American voters who cared more about the economy than other issues – and the nearly half who said they are worse off financially than four years ago – their choice for the next president appeared resoundingly clear: Republican Donald Trump.

Indeed, Trump emerged as the winner early on Wednesday, with broad disaffection about the state of the economy a main reason why he outpolled Vice President Kamala Harris, his Democratic opponent.

About 31% of voters said the economy was their top issue, ranking second behind the 35% who said the state of democracy mattered most to them, according to national exit polling data from Edison Research. And the voters who identified the economy as their primary concern voted overwhelmingly for Trump over Harris – 79% to 20%.

Meanwhile, the high inflation of the last couple of years and the toll that has taken on perceptions of financial well-being stood out as clear concerns that also steered voters toward Trump.

More than half of voters said inflation had caused them a moderate hardship in the last year, while nearly one in four said it had caused a severe hardship. Those saying it had caused a moderate difficulty leaned somewhat more to Trump, 50% to 47%, but 73% of those calling it a severe hardship voted for the former president. Edison’s exit polling data showed 45% of voters across the country said their family’s financial situation was worse today than four years ago, compared with just 20% in 2020. Those voters favored Trump over Harris 80% to 17%. The results dovetail with surveys that have shown consumers giving the economy poor ratings even though unemployment is near historic lows, growth overall has been largely above trend, consumer spending remains robust, and overall household wealth is at a record high.

The University of Michigan’s twice-monthly Consumer Sentiment Index, for instance, plunged to a record low in the summer of 2022 when inflation as measured by the Consumer Price Index peaked at 9.1% year-over-year – the highest since the early 1980s.

While it has improved in the two years since as stiff interest rate increases by the Federal Reserve have brought inflation back to near the central bank’s 2% target, sentiment remains well below the levels that prevailed during Trump’s first term from 2017 to 2021.