Chart of the Week: Kamala Harris’s inflation problem

Kamala Harris can point to strong economic growth, robust job creation and low unemployment during Joe Biden’s presidency. But Donald Trump polls well among voters on the economy, with some voters blaming Mr Biden (and by extension Ms Harris) for price rises during his time as president. When adjusted using headline CPI, official data show that there has been virtually no growth in wages since Joe Biden took office. Within that headline figure is a lot of nuance: for example, due to distortions caused by the pandemic (as some workers on lower incomes like bar staff and shop assistants could not work, meaning that the rise in economy-wide average hourly incomes during that period had more to do with the composition of those working than with wage rises). Stripping out this this period, the trend of rising wages to prices has continued during the Biden presidency. Voters tend to have a strong dislike of price rises, even if their wages have been rising in tandem. It is also possible that the price of the CPI basket of the average swing voter may have risen by more than overall basket, or that their wages have risen by less than the economy-wide average. Whatever the reason, Kamala Harris will be hoping to convince voters that she would be an able steward of the economy. She will also take solace from Barack Obama’s reelection, even though the wages to prices ratio remained flat during his first term as president.

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