A deepening cost-of-living crisis is gripping America, casting a shadow over the nation's economic prospects and posing significant challenges for policymakers ahead of the midterm elections. According to an exclusive poll conducted by Harris Poll for The Guardian, half of Americans are struggling to afford basic necessities like groceries and fuel, while 95% believe their country is facing an affordability crisis.
The survey reveals a stark deterioration in economic confidence since February, with 57% now believing the overall economy is worsening – a marked increase from 46%. This shift in sentiment comes despite relatively stable employment figures and record-high stock markets. Only 16% of respondents believe the economy is improving, down from 28%, while more people report a decline in their personal financial security.
The struggle to meet everyday expenses transcends party lines, with roughly half of Democrats, Republicans, and independent voters reporting difficulties affording essential items like petrol and groceries. Two-thirds of Americans – including nearly half of Republicans – expressed little confidence in the federal government's ability to alleviate cost-of-living challenges. This widespread pessimism poses significant risks for both major parties heading into the midterm elections.
The poll highlights the impact of external factors, such as the conflict in Iran, on American consumers. The war has been cited as a key reason for soaring fuel prices, which have yet to return to pre-war levels despite a peace deal signed in June. This has had a particularly negative effect on Republican voters, whose economic optimism has soured – only 27% now believe the economy is improving, down from 49%. Beneath the surface of robust labour market data, which showed an average of 111,000 new jobs added over the past three months, lies a stark reality: inflation has outpaced wage growth. In May, the annual inflation rate climbed to 4.2%, while average hourly earnings decreased by 0.7% compared to the previous year.
This erosion of purchasing power extends beyond daily expenses, with about half of those polled also struggling to manage their debt obligations. As Americans face a growing sense of economic insecurity, policymakers will need to find innovative solutions to address these pressing concerns and mitigate the impact on British trade and investment partners, who are closely watching developments across the Atlantic.