Could lower swing-state inflation rates help Biden and hurt Trump?

Inflation in several battleground states in the 2024 election is below the national average — in some cases by more than a full percentage point — as food prices retreat even while housing costs stay hot, according to a The Hill analysis of regional Labor Department data.

Recent polling shows the economy and inflation are top concerns for Americans going into the election,_, gaining in importance specifically in states where Trump and Biden are on the ground campaigning. Seven states — Arizona, Michigan, Wisconsin, Georgia, Pennsylvania, Nevada and North Carolina — are expected to sway the election.

An April YouGov survey for CBS news ranked “the economy” and “inflation” as the two top issues in the U.S. today.

The comparatively gentler pricing in key counties and districts could make a difference at the ballot box, as studies suggest incumbent presidents tend to win in elections when economic conditions are more favorable.

“Different inflation rates could indeed be significant in swing states. I think the cumulative inflation rate over the past three to four years is probably the most important to consumers thinking about their personal situation,” Jeremy Horpedahl, an economist at the University of Central Arkansas, told The Hill.

The national annual inflation rate was 3.5 percent as of March. It has remained between 3 percent and 3.7 percent since last June after dropping fast off a 9-percent high in mid-2022. 

Federal Reserve Chair Jerome Powell acknowledged a lack of progress toward the Fed’s 2-percent target rate Wednesday, saying, “so far this year the data have not given us [the] greater confidence” to start cutting interest rates.

Economists say the lower inflation in swing states could be related to housing prices, which are directly propelled by interest rate increases and are now the primary driver of overall inflation.

Different regions of the country, with different zoning and permitting rules, may have been able to process housing cost pressure more effectively, and they may be converging in 2024 battleground states.

“We know that across the country, housing affordability differs. To meet the extra demand that we had during the pandemic, you needed to build more, and some parts of the country are better at building more,” Claudia Sahm, a former Fed economist now with New Century Advisors, told The Hill. “Those were the areas that were able to meet the demand.”

“It’s the kitchen table stuff that at the end of the day ought to affect how people vote,” she said.

Some economists see small differences in inflation as a trivial matter for election outcomes.

“Small differences in inflation across states will not be a big deal,” economist Dean Baker of the Center for Economic Policy and Research, a left-leaning think tank, told The Hill, conditioning that perceptible changes in housing costs could have electoral consequences.

“We know that the rents of marketed units have stopped rising rapidly and may even be falling somewhat. This will be a big help where people see that. Also, if we see any fall in mortgage rates before the election, that will likely help Biden,” he said.

Arizona

In Maricopa County, which Biden took from Trump in 2020 as only the second Democrat to win there since Harry Truman, consumer prices advanced just 2.2 percent on an annual basis in February of this year, the last time data was reported for the Phoenix area by the Labor Department.

Grocery prices in Phoenix have deflated 0.4 percent since February 2023, with meat prices down more than 3 percent and dairy prices down more than 5 percent. Housing costs are still still elevated just as they are nationally, with shelter up 2.7 percent and primary rents up 4.1 percent.

Maricopa County’s 2.2-percent inflation rate is also notable because it fell from a 2022 high of 13 percent — a full 4 percentage points higher than the national peak of 9 percent reached in that year. That’s a drop in price expansion of more than 10 percent in under two years, nearly double the 5.5-percent drop experienced nationally.

Unemployment in Phoenix is at 2.6 percent, which is also significantly better than the national number of 3.8 percent. A recent analysis by USA Today that compared income levels to the cost of essential expenses determined Arizona to be the third-most affordable state to live in.

Michigan

Michigan, where Trump visited Saginaw County on Wednesday just six weeks after Biden’s own trip there, is another battleground state where inflation is well below the national average, at 2.8 percent in the Detroit-Warren-Dearborn area.

That metropolitan district has also experienced a larger drop in inflation than the U.S. as a whole, falling from a high of 9.7 percent in June 2022.

Shelter costs are more expensive in the Detroit area, while certain foods are cheaper, including meat and dairy products. Unemployment in Saginaw County stood at 5.2 percent in March of this year, higher than the national level.

In the battleground Kent County, unemployment stood at 3.1 percent in February. Grand Rapids-area unemployment also beat national levels at 3.2 percent that month, though weekly wages were $217 shy of the U.S. average.

Georgia

The economy in the Atlanta area, which has a number of pivotal counties for the election and has seen dynamic changes in voting patterns in recent years, tells a stronger story, with inflation falling to 3.3 percent in February off a 2022 high of 11.5 percent.

Unemployment in the Atlanta region was 3.0 percent in January compared to 3.9 percent nationally, while average weekly wages came in $37 above national levels. In contested Cobb County, which has pulled back from the GOP in recent years, unemployment was a low 2.7 percent.

While headline inflation in Atlanta is 0.2 percentage points lower than the national consumer price index, both food and energy inflation are considerably higher, at a 3.9 percent annual increase in February for food and a 3.6 percent increase for energy costs. That’s compared to a 1.9-percent deflation in energy costs as measured on the national level.

Wisconsin

Regional inflation data for Wisconsin is listed under neighboring Minnesota by the Labor Department, but provides a similar picture of lower-than-average price increases in the northern midwest at 2.7 percent.

Grocery prices are deflating by 2.1 percent on the year, with fruits and vegetables 6.7 percent cheaper than they were in 2023. Deflation in some energy categories and motor vehicle prices is being offset by predictably high inflation in housing.

Wisconsin’s two highly contested “boomerang counties,” which voted for former President Obama, then Trump and most recently Biden, are Door County and Sauk County. 

Data from Kewaunee County, which abuts Door County, has unemployment beating the national average by nearly a full percentage point at 2.9 percent, which is true of nearby Brown County, as well. Unemployment in Madison, which is close to Sauk County, is at a very low 2.3 percent.

Pennsylvania

Economic conditions in metropolitan areas of Pennsylvania more closely map the national story than some of the other swing states, with inflation falling from a high of 8.8 percent in 2022 to 3.4 percent in February in the Philadelphia region.

Food and shelter cost pressures are both weighing on pocketbooks, while energy deflation is offering a bit of price slack, with household energy costs down by more than 3 percent on the year.

The economic situation in boomerang Erie County is less favorable, with unemployment at 4 percent and weekly wages trailing the national average by a substantial $357.

Nevada and North Carolina

The Labor Department doesn’t track price data in metropolitan areas in either Nevada or North Carolina, so only broader regional-level data is available for those states.

Inflation is higher than average in the West at 3.6 percent and in the South at 3.8 percent annually.

However, economists in North Carolina have touted the state’s affordability due to its relatively homogenous rural dispersion.

“Data from the federal government for 2022 — the latest available — show the cost of the same products and services bought by a typical household was 5.8 percent lower in North Carolina compared to the nation,” North Carolina State University agricultural economist Mike Walden wrote in a January brief.

“The cost of housing … is 18 percent lower than the national cost. A big reason is that the percentage of North Carolinians living in rural regions of the state is more than twice as high as in the nation,” he noted.

Unemployment is higher than the national average in Nevada’s Carson City, Las Vegas and Reno, with the statewide average at 5.1 percent in March. Unemployment in North Carolina in March is in sync with the national average at 3.5 percent.