With the 2022 midterm elections just over three months away, a large majority of Americans say in opinion polls that they are thinking a lot about the state of the economy. In the last NBC News Pollfor example, 40% of those polled said the main problem facing the country is the “cost of living” or “jobs and the economy”.
That is supposed to be bad news for the party in power, in this case the Democrats. And it may well be. Voters’ fears about the economy are palpable. But compared to other medium-term economic environments, 2022 does not stand out as particularly tough, the only exception being inflation.
The unemployment rate of 3.6% in June is the lowest of any medium-term situation since 2000. The GDP figure for the second quarter of 2022 won’t be released for a few weeks (July 28), but estimates place the figure at a growth of about 1 point. That figure would actually be higher if it weren’t dragged down by high inflation.
The June inflation rate of 9.1% is not only higher than the mid-June figures, it is stratospheric. The closest figure is the 4.3% figure from June 2006.
That number seems to cause all the fear of the voter. Despite all the talk of a coming recession, the economy is still adding jobs at a solid clip and consumer spending is still fairly strong.
But the real takeaway here may be the bottom line: the net seats lost or won in the House each year by the incumbent president’s party. It is negative in every election except 2002, the first by-election after the 9/11 terrorist attacks.
And, arguably, economics has not featured prominently in most midterm exams. Note the 2014 and 2018 figures. In both elections, unemployment was low or falling, GDP growth was good and inflation was low. And in both elections, the incumbent president lost seats in the House of Representatives. In fact, 2018, which appeared to have a stronger economy, also had a bigger loss for the president.
That might be a point to keep in mind as the summer rolls on and we talk about the economy and inflation. There is little doubt that inflation will weigh on American minds in 2022, but midterm tests are usually not about the economy. And there’s a long list of issues in the mix – from abortion and guns to the January 6 hearings – that are giving the electoral environment an uneasy air.