For the past four years, inflation has rattled local small businesses across the country. The inflation rate peaked in 2022, but of course the cost of goods never went back down.
In fact, the prices just kept rising, just not at the same clip they had been rising at the peak.
In short, gas prices, food prices, housing prices, energy prices and insurance costs are still blowing away everyday people's budgets, making them cut costs on essentials or drive up credit card debt despite the Biden-Harris administration consistently dismissing their plight for two years.
On Friday, things just became worse for middle America's economic concerns when the latest jobs report for July showed that not only has job growth slowed to an alarming number, only adding 114,000 jobs on a seasonally adjusted basis when experts had been expecting 176,00 new jobs, but the June and May jobs reports were revised lower by 29,000 jobs.
This means 10 of the last 14 reports have now been revised lower.
Which means all those jobs report headlines that we've read for the past year, suggesting the economy is booming, were mistaken. The truth is that jobs numbers in this country are weak, and the new unemployment rate of 4.3% is now the highest it has been since 2021. The reality has been what small businesses and consumers have been warning about for a while: The trends on the ground in real life show a very different world than the headlines.
By midafternoon Friday, the Dow Jones Industrial Average was down by more than 1,500 points since its high on Wednesday, and market experts at The Kobeissi Letter say the volatility index is up officially more than 100%.
At the same moment, the Sahm Rule, a widely accepted economic rule that maintains if the unemployment rate rises by half a percentage point quickly enough, then the economy is in recession, was triggered by the data.
In April, Vice President Kamala Harris, the Democrats' presumptive nominee for president, kickstarted an "Economic Opportunity Tour" across the country, touting the Biden-Harris administration's record on job creation and erasing student loan debt.
Harris said launching the tour that "our economic approach has delivered great progress, and we will continue to invest in you, your family, and your future."
In that same month of April, the Labor Department noted that hiring had fallen short of expectations and was one of many indicators that the labor market was cooling. Yet in her role as the vice president, Harris was spinning a very different story.
News coverage of her kickoff of the Economic Opportunity Tour in Atlanta in April focused solely on her galvanizing and mobilizing Black voters.
The Bureau of Labor Statistics numbers below the headline showed some disturbing trends for middle Americans still struggling under the weight of inflation. People without college degrees saw the biggest rise in unemployment, jumping to 4.6% in July (up from 3.3% in July 2023).
For perspective, as of 2021, Pew Research shows 37.9% of adults over the age of 25 have bachelor's degrees, according to data from the U.S. Census Bureau's Current Population survey.
The economy is always the No. 1 concern for people when they go to the voting booth. The latest Brookings Report, released before the weak jobs market came to light and inflation was the overriding economic issue, showed a whopping 65% of voters rate the economy as good during former President Donald Trump's term, compared to 38% under the Biden-Harris administration.
Paul Sracic, political science professor at Youngstown State University, said political strategist James Carville was right when he said, "It's the economy stupid," when he centered former President Bill Clinton's campaign on economic issues.
"As it was then and now, it is how people feel about the economy and if their lives are better that is driving this election," Sracic said. "The word 'recession' is powerful. A lot of economics is psychological. The numbers that came out on Friday is very bad news for the Harris campaign. They were touting a soft landing last week, and that is not going to happen now."
Sracic said President Joe Biden and Harris both got the messaging wrong from the onset on the economy: "It began with inflation. They woefully underestimated inflation from the start, dismissing it as transitory. Maybe if they had reacted sooner, not understanding would not have become an overarching theme for them."
How Trump handles this is critically important for him, Sracic said.
"We always thought this election was about the economy. Still is, but now it is even bigger."
