Economic challenges may weigh heavily on voters in 2022 midterm election

Inflation, interest rates, and gas prices are taking a collective toll that experts expect to be reflected in election results. FOX 26 Business Reporter Tom Zizka shares more.

HOUSTON - As voters begin casting their ballots for the midterm election, a new Gallup poll finds almost 8 in 10 Americans rate the economy as 'fair' or 'poor', and most think it's getting worse.

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It has been 40 years since the kind of dramatic price increases we've been seeing have been such a significant part of the national conversation. Inflation, interest rates, and gas prices are taking a collective toll that experts expect to be reflected in election results.

From President Biden defiantly declaring, "Our economy is strong as hell," to his conservative critics, like former Donald Trump economic advisor Steve Moore, arguing voters might disagree.

"They feel it every time they go to the grocery store and the gas pump, and that's not something you can spin," he said.

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Both points of view are true, to an extent.

"It's a very strong labor market, with inflation that is very difficult to get under control, particularly the pieces we feel every day," said Houston economist Sam Rines.

Those pieces that we feel, every day, are significantly different from other economic challenges we've faced so far. National unemployment remains low at 3.5%, while the percentage of people working has trended lower for more than 20 years.

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Inflation reached another 40-year high, up 8.2% over a year ago.

Meantime, inflation remains stubbornly stuck at 40 year highs, making most everything more expensive. In the last year, alone, grocery prices are averaging 13% higher. The housing market is, also, quickly losing steam as mortgage rates above 7% are slowing sales and harming sellers and buyers.

Taken altogether, individual voters may have different perspectives in the ballot box.

"It's worth looking at both sides of the equation," said Rines. "Yes, you do have a strong labor-market; but, yes, you also have inflation that is creeping out of control, in a number of ways, that is not likely to come down significantly, in the near term."

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At the gas pump, consumers continue to struggle at the gas pump, as well. While the summer's record prices have moderated, they remain at 10 year highs, squeezing discretionary spending.

"As a result, we see people changing their habits," explained energy analyst Andy Lipow. "Whether it's going out to restaurants less often, or buying less goods and services at the department stores, high energy costs ripple through the economy."

Those ripples could continue for some time, as the Fed aggressively raises interest rates, trying to tame inflation, while global concerns affect supply chains, energy demand and economic sentiment. It is easy to imagine it all weighing heavily on voters.

"To a large extent it's not going to matter for a significant time, who wins in November," said Rines, "It'll matter sometime in 2023. But to a large extent, the current dynamics are set and in place."

Rines also believes the full effect of current economic conditions will take some time to be felt. He expects a recession and potential consumer credit crunch, next year, long after voters have decided who they think can best handle it.