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The ‘it’s inflation, silly’ thesis is robust. As MainFT highlighted in a large piece days earlier than the vote and once more on election day. inflation was clearly having a significant impact on Kamala Harris’s probability of being elected.
However an evaluation of geographically granular US inflation and the precise election outcomes means that inflation didn’t have a simple impact on the swing to Trump.
If it did, locations which suffered greater inflation would have been extra prone to see elevated Trump share of the vote over 2020. This isn’t what the information reveals, nonetheless.
Cumulative CPI inflation since 2020 on the metropolitan space — probably the most granular measure of inflation launched by the Bureau of Labor Statistics — just isn’t related to the 2024 Trump swing.
As a substitute, there’s a slight unfavorable relationship: cities which noticed greater inflation skilled smaller swings to Trump.
The image modifications whenever you as a substitute plot cumulative CPI towards Trump’s vote share. Right here, there’s a transparent optimistic affiliation — cities that noticed greater inflation additionally noticed the next vote share for Trump in 2024.
However the identical relationship holds for Trump’s 2020 vote share, when he misplaced to Joe Biden.
Granted, the pattern dimension is small. We solely have each CPI information and voting outcomes for 21 metropolitan areas.
A bigger pattern comes from the Bureau of Financial Evaluation, which releases implied inflation charges for over 300 metro areas within the US, albeit with a very long time delay (the newest information is for 2022, when inflation peaked within the US).
Simply as with CPI, cumulative PCE inflation by metro space reveals no relationship with the Trump swing, and there’s additionally no relationship with Trump’s vote share in 2024.
That is puzzling. Exit polls and pre-election surveys present inflation was a significant concern, and educational proof is obvious that folks really hate inflation and have a tendency guilty the federal government for greater value ranges irrespective of who or what is definitely guilty.
So why didn’t areas that noticed greater inflation swing extra to Trump?
It’s not as if variation in inflation throughout areas is insignificant. Inflation variations are remarkably giant — Tampa Bay noticed near 30 per cent cumulative CPI inflation since 2020, practically double that of San Francisco, for instance.
What then? The reply to this puzzle is perhaps that goal, mixture inflation — as measured by CPI or PCE on the metropolis or nation degree — is a really totally different factor to each perceived inflation and skilled inflation.
First, on perceptions. Republican voters consumed much more negativity concerning the US financial system during the last a number of years, and this confirmed up clearly in sentiment.
A survey by Pew forward of the election discovered a 20 proportion level hole in concern round costs between individuals figuring out as Republicans versus Democrats. And analysis reveals that Republicans are more likely guilty the federal government for inflation.
From this standpoint, the route of causality runs within the reverse route: help for Republicans formed views on how dangerous inflation was and who was guilty.
However whereas perceptions is perhaps 9/tenth of actuality, inflation was objectively excessive all around the US.
The opposite level is that mixture measures of inflation obscure giant variations in inflation experiences by households. All of us have very totally different consumption baskets, and therefore very totally different precise inflation charges.
One notable instance are typical variations in inflation by earnings group. The poorest sometimes undergo the best inflation ache, and the current episode was no exception — the bottom earnings quintile noticed two proportion factors greater inflation on common since 2019.
Maybe that helps clarify why decrease earnings voters have been extra prone to vote for Republicans over Democrats at this election, for the primary time in a long time.
