The impact of inflation on the 2024 presidential election

David A. Steinberg is an associate professor of international political economy at the Johns Hopkins School of Advanced International Studies. His research focuses on the politics of international money and finance. He is also the co-author of "The Impact of Inflation on Support for Kamala Harris in the 2024 Presidential Election," which was published earlier this month.

Rising costs were top of mind as voters cast their ballots in the 2024 presidential election. According to exit polls from CBS News, 75% of voters reported that inflation had caused moderate or severe hardship for them over the past year, with 45% saying they were worse off now than they were four years ago. During his campaign, President-elect Donald Trump vowed to end inflation and strengthen the economy. Political economy professor David A. Steinberg explains the role inflation played in the election outcome and what might happen next.

How has inflation affected Americans over the past few years?

Inflation in the United States reached 9% in 2022, meaning that the average cost of goods and services went up by that amount. That is the highest rate of inflation that this country has experienced in over 40 years. Inflation has slowed down considerably since that time, with the overall price level rising just over 2% per year now, but the price level today is more than 20% higher than it was four years ago. As a result, many Americans cannot afford to buy as many things as they otherwise would.

Image caption: David A. Steinberg

The burden of inflation has not been even, however. Rising prices are particularly problematic for lower-income groups. One reason for that is that people with the lowest incomes spend a larger share of their income on necessities. Inflation is also more burdensome for older people, and retirees in particular. When inflation rises, people's salaries often go up, too, to help compensate them for the higher cost of living. But retired people are living on fixed incomes, so inflation leaves them worse off.

Inflation, however, is not all bad. In the U.S., inflation has been linked to a very strong job market. Jobs are abundant and many peoples' salaries have gone up. When we look more holistically at the economy, due to rising salaries, many peoples' standard of living has actually kept up with inflation, if not improved. However, most Americans do not recognize these positive aspects of inflation. Research by Harvard University economist Stefanie Stantcheva shows that people blame inflation for making things more expensive, but they think that they personally deserve all the credit when they get new jobs or pay increases. Inflation does not get the credit it deserves for these positive developments. For these reasons, the vast majority of Americans see inflation as an unambiguously bad outcome.

What impact did inflation have on the outcome of the 2024 election?

Elections are never decided by one factor alone, but inflation is one factor that helped Donald Trump win the 2024 presidential election. Americans were angry about inflation. In surveys prior to the election, inflation was typically the most commonly cited concern on voters' minds. Most voters also thought Trump would do a better job than Harris at bringing prices down. After all, Trump constantly reminded voters that prices increased much faster during the Biden administration than during the previous Trump term. Trump also pledged to end inflation if re-elected.

My study with Erdem Aytaç and Daniel McDowell shows that inflation undermined support for the Democrats in the 2024 Presidential election. We fielded a large, nationally representative survey in the United States the week before the election. Two types of evidence suggest that inflation hurt Harris and the Democrats. First, we find that people that believe that inflation was higher also reported more negative opinions about Harris and the Democratic Party. In other words, perceptions of inflation are correlated with worse perceptions of the Biden-Harris administration.

Second, we compared opinions about the election among two groups of people: (1) those that were asked to think about how much prices have gone up over the past year just before being asked for their political opinions, and (2) those that were not asked about inflation. Our results were striking. Simply asking people to think about inflation reduced approval of the Biden-Harris administration and reduced confidence in the Democratic Party leadership's ability to manage the economy. In other words, when people thought about inflation, their support for the Democratic Party fell. This suggests that Harris would have been more popular if inflation was lower or if the Trump campaign focused less on this issue.

President-elect Trump pledged to "end inflation" during his presidency. How does he plan to do that?

It is much easier for presidential candidates to promise to end inflation than it is for sitting presidents to actually do so. Some of Trump's proposed policies could help achieve this goal. For example, his pledge to increase domestic energy production might lower energy prices.

But many of Trump's other signature policy ideas, if he follows through on them, are likely to do the opposite and worsen inflation. Trump campaigned on raising tariff rates, which are taxes on imports. Higher tariffs would increase the prices that consumers pay for foreign goods and goods that use imported components. Another signature Trump promise, mass deportations, would likely raise business costs, and those higher costs would be passed along to consumers in the form of higher prices. Finally, Trump wants to cut taxes, which may also worsen inflationary pressures. If inflation continues to trend downwards over the next four years, it is unlikely to be because of Trump's economic policies.

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