With polls showing that Americans rank the economy as their most pressing concern in the November 5 election, both Vice President Kamala Harris and former President Donald Trump are making last-minute pitches to convince voters they know how to ensure the nation’s financial prosperity.
At the same time, many factors that affect the nation’s economic performance are beyond the president’s control, from shocks like Russia’s invasion of Ukraine to the pandemic’s supply-chain snarls, which contributed to the highest U.S. inflation in 40 years.
Although experts largely give the current economy high marks, most Americans don’t agree, with 52% telling Gallup that they feel worse off today than four years ago. That’s partly due to partisan differences — Republicans are much more likely than Democrats to say they’re struggling more than in 2020, Gallup found — but economists say it’s also linked to lingering pain from the global disruptions caused by the pandemic.
“It’s inflation, stupid!” wrote Bernard Yaros, U.S. lead economist at Oxford Economics, in an October 24 report, borrowing from political strategist James Carville’s famous coinage. “Inflation is the foremost issue voters are concerned about, and how it is perceived will determine the election.”
Here are five key factors that could weigh on voters’ decisions as they cast their ballots.
Inflation: A low rate, but prices remain high
Inflation across the country has cooled considerably from its peak of 9.1% in June of 2022, with the Consumer Price Index (CPI) down to a three-year low of 2.4% in September, close to the Federal Reserve’s annual goal of 2%.
But ask almost any American if inflation is still high, and the answer is typically a resounding “yes.” In fact, more than 1 in 4 people polled by YouGov in August said they think the current inflation rate is over 10%. The reason: the ongoing pinch of high prices. Although inflation has dropped close to pre-pandemic levels, prices haven’t receded and continue to impact consumers.
Take grocery prices, which rose a scant 1.3% in September from a year earlier. While that rate is low, it still means shoppers must pay 1.3% more to fill their shopping cart, on top of food prices that had already jumped 26% since January 2020. That’s tough for a lot of people to swallow.
“If enough independent voters in battleground states still feel sticker shock from the alarmingly high inflation of 2021 and 2022, former President Donald Trump is projected to win the Electoral College,” Yaros wrote.
By contrast, “If swing voters instead focus on the rate of change in consumer prices, rather than the price level, they will be more inclined to support the vice president due to the significant moderation in inflation since mid-2022,” he noted.
Jobs and wages: Winners and losers
The job market is strong, with the U.S. unemployment rate near a 50-year low. Even so, the jobless rate has inched up in recent months, one reason the Fed opted to cut rates last month. Wages have been growing faster than inflation since May 2023, helping to dig some households out of the financial hole created by soaring prices.
But such statistics don’t offset the long-term issues affecting some workers. Men without college degrees, for instance, have lost economic ground over the past several decades as the labor market shifted to professions requiring higher education and training.
White men without a bachelor’s degree earned more than than the typical worker in 1980, the New York Times found in a recent analysis of Census data. But now this group of workers earns much less than the average American, while women with college degrees have surpassed them in income.
White Americans without a college degree are both more likely to say the economy is in bad shape than those with a bachelor’s degree, and they’re also more likely to support Trump, CBS News polling shows. In an October 23-25 CBS News poll, about 63% of White people without a college education said they planned to vote for Trump, compared with 48% of those with a postsecondary degree.
Immigration: Costs to the economy
Voters also rank immigration as a top issue, and Trump has stepped up his attacks on the Biden-Harris administration’s record on illegal immigration, pledging to conduct the largest deportation in American history if elected.
But that’s also an economic issue, given that there are more than 11 million undocumented immigrants in the U.S., with many working in meatpacking plants, on farms, on construction sites and other jobs key to the country’s well-being.
Deporting those immigrants could cause major economic headwinds, according to Adam Posen, president of the Peterson Institute for International Economics. “Deporting migrants would be stagflationary for the U.S. economy,” he wrote on X in July. “The greater the restrictions and deportations, the more the recessionary effects outweigh the inflationary effects for the Fed.”
It would also cost taxpayers billions to deport millions of people, with a CBS News analysis estimating that it would cost $20 billion to apprehend and deport 1 million people alone.
Taxes: Cuts ahead?
Taxes have taken center stage with both campaigns, as Trump and Harris have pledged to implement a number of tax cuts and credits to help certain groups of people.
In some cases, the candidates have offered the same tax breaks, such as one to eliminate taxes on tips. But Trump has gone farther, offering a laundry list of cuts to everyone from Social Security beneficiaries to car buyers.
But the biggest issue ahead is the future of the Tax Cuts & Jobs Act, Trump’s signature 2017 legislation that delivered major tax cuts to corporations and the wealthy, as well as more modest reductions for millions of other Americans. Trump wants to renew many of those provisions, while also chopping the corporate tax rate to 15%, down from its current 21%.
Still, changes to the tax code must be passed by the House and Senate, which could be a tall order for either candidate if there’s a divided Congress during the next administration.
The federal deficit and debt: Getting bigger
Another issue is the national debt and the nation’s growing deficit, with both candidates’ economic proposals projected to add trillions to the country’s debt.
Harris’s plans would add almost $4 trillion in debt through 2035, while Trump’s plan would increase it by almost $8 trillion, according to a new analysis from the nonpartisan Committee for a Responsible Federal Budget, which favors narrower deficits.
“The national debt currently stands at 99% of Gross Domestic Product (GDP) and is projected to grow from 102% of GDP at the start of [fiscal year] 2026 to 125% by the end of 2035 based on the Congressional Budget Office’s (CBO) current law baseline,” the group wrote in an October 28 analysis.
It added, “Whoever wins the 2024 presidential election will face an unprecedented fiscal situation upon taking office … Already, the cost of servicing our high and rising national debt has eclipsed the cost of defending our nation or providing health care to elderly Americans.”
That’s also an issue Americans in battleground states care about, according to an October poll from the Peterson Institute, which found that 9 in 10 voters across Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin think the candidates need a plan for reducing the nation’s debt.