(DailyDig.com) – In February 2024, over 1,700 voters registered in the US were polled about the economy’s current state. Inflation, with the expected high prices, is a political problem prior to the November election.
The Federal Reserve (Fed) has attempted to make corrections to decrease the prices caused by inflation to a minor effect. The importance of inflation to the voters who took the poll is less than the problem of the US/Mexico open border. But the prominence of inflation was higher than healthcare, climate, foreign policy, taxes, and crime, according to the poll.
The poll revealed that the voters strongly (50 percent) or somewhat (10 percent) disapprove of President Biden’s treatment of inflation. Since the Ukraine-Russia war and the imposition of sanctions, tensions in the political sphere have escalated due to increases in electric and gas prices.
Since inflation seems to be persistent and even rising in the service industry by 2.4 percent, the Fed has become concerned about lowering interest rates in order to improve the US economy. Despite the slowdown in merchandise price increases, the Fed faces challenges in setting interest rates that affect both goods and services.
Due to the fact that labor-intensive service sectors are susceptible to any increase in wages and lower competition due to supply chain issues, the central bank cannot ignore the higher prices for services. The spending of households on services ranges at approximately two-thirds. Production for the service sector is nearly twice that of goods or construction, as based on the price index of personal consumption expenditures (PCE).
The prices for consumers were nearly ten percent higher at the beginning of 2024 than they would have been if they had increased at the rate they had before 2020. The quick increase in prices after the pandemic is why voters expressed their disapproval in the opinion poll.
The fact that prices are not increasing as fast as before is little comfort to those who are currently living paycheck-to-paycheck due to the last four years of skyrocketing prices.
Copyright 2024, DailyDig.com
