Americans' economic satisfaction plunged during Biden's first year in office: Gallup poll
Inflation driving growing dissatisfaction with US economy
Former Reagan economist Art Laffer argues inflation is 'not under control yet' and says he is 'quite concerned about the next 12 months for the U.S. economy.'
Economic satisfaction plummeted during President Biden's first year in office as American consumers grappled with the hottest inflation in nearly four decades and the continuation of the COVID-19 pandemic.
A new Gallup poll found that just one-third of Americans are satisfied with the current state of the economy, despite the improvements in employment, economic growth and the stock market last year. It marks a significant drop from one year ago, before Biden was sworn in as president, when 43% of survey respondents said they were satisfied. By comparison, before the pandemic began, about 68% of Americans said they were satisfied with the economy.
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In all, 64% of the people surveyed between Jan. 3 and Jan. 16 said they were dissatisfied with the economy, including about one in three who said they were "very dissatisfied" with the economy. It's the worst reading since January 2014.
Inflation has accelerated as the economy rebounds from the brief, but extremely severe, pandemic-induced recession, surging 7% in December from the previous year – the fastest pace since 1982, according to the Labor Department.
Customers wait in line to checkout during a Black Friday sale at Macy's, Nov. 26, 2021, in Indianapolis. (AP Photo/Darron Cummings, File / AP Newsroom)
The prices of all kinds of energy – gasoline, diesel fuel, natural gas, oil and more – have been a major driver behind inflation, with costs climbing more than 29% over the past year, in part due to lopsided supply and demand. Consumers are traveling more, but the supply side has not kept up with the demand.
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One of the biggest satisfaction declines in the survey was with energy policies: Just 27% of respondents said they were satisfied with energy policies, a steep drop from one year ago, when 42% said they were satisfied.
Rising gas prices are likely the reason. The Labor Department reported in January that gasoline prices have skyrocketed 49.6% over the past year, while natural gas has surged 24.1% and electricity is up 6.3%. A gallon of gas, on average, was $3.37 nationwide on Monday, according to AAA – up from $2.42 a year ago. In California, gas prices are well over $4 per gallon.
People shop for groceries in a Manhattan store on Jan. 12, 2022 in New York City. (Spencer Platt/Getty Images / Getty Images)
The rising prices are eating away at the strong wage gains Americans saw last year and are hitting the lowest-income households the hardest. An analysis from the University of Pennsylvania's Penn Wharton Budget Model shows that higher energy prices cost the average American an additional $1,200 last year. The lowest-income households spent about 11% of total expenditures on energy in 2021, up from 8% in 2020.
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The rising prices are eating away at the strong wage gains Americans saw last year and are hitting the lowest-income households the hardest. An analysis from the University of Pennsylvania's Penn Wharton Budget Model shows that higher energy prices cost the average American an additional $1,200 last year. The lowest-income households spent about 11% of total expenditures on energy in 2021, up from 8% in 2020.