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Americans Think Inflation Will Get Worse After the Election. Should We Be Worried?
By Adam Hardy MONEY RESEARCH COLLECTIVE
Generally speaking, inflation doesn’t care which political party is in charge.
As the 2024 presidential election fast approaches, Americans worry that the outcome is going to hurt their wallets.
More specifically, 6 in 10 Americans say that they expect the result of the election will lead to an increase in inflation, according to a survey released Thursday by the investment firm D.A. Davidson.
An even higher share of Americans, 78%, say the election has them feeling anxious about their finances more broadly. Some of those people, the firm found, have started acting on those worries by making changes — or planning to make changes — to their retirement savings and investment accounts despite the broad financial consensus to not act on those impulses.
“The markets don’t like uncertainty, and the outcome of the U.S. presidential election is a big question mark,” said Andrew Crowell, a financial advisor and vice chairman at D.A. Davidson, in a statement.
Any “turbulence” from the outcome of the election is likely to be short-term, he adds, noting that folks should not make any drastic changes: “Stay the course.”
Is inflation higher under Democrats or Republicans?
Generally speaking, inflation doesn’t care which political party is in charge. Prices are going to rise over time either way.
By analyzing data from 1953 to 2020, William Chittenden, a finance professor from Texas State University, found that inflation rose 3.35% per year under Democratic presidents and 3.5% under Republican presidents.
A similar study by the left-leaning Economic Policy Institute found much the same. Looking at inflation rates from 1949 to 2024, prices rose 2.91% under Democratic presidents and 3.29% under Republican ones.
Chittenden’s analysis was part of a sprawling study that examined how the economy performed under Republican and Democratic leadership in the White House and in both chambers of Congress. When looking at various economic factors such as gross domestic product, unemployment, inflation, recessions, stock market performance and more, it’s a mixed bag.
For instance, economic growth tends to be strongest when Republicans control the Senate — regardless of who’s in the House of Representatives or White House. The stock market tends to perform better with a Democratic president, while unemployment and inflation tend to be higher when Democrats have control over either chamber of Congress.
He concludes that certain types of political gridlock are actually beneficial to the economy.
“The U.S. economy appears to have the strongest performance under the combination of a Democratic president with a Republican controlled Senate and House of Representatives,” Chittenden wrote. “During the time this combination was in power, the United States did not experience a recession.”
How bad is inflation? Politics affects perspectives
According to the latest Gallup survey, Americans say inflation is the most important financial problem facing their families for the third year straight.
Politics has a lot to do with how people feel about inflation. Drilling down into party affiliation, Republicans were roughly two times more likely than Democrats to rank inflation as their chief financial concern (56% to 26% respectively).
There are a couple of reasons why. A study published by the National Bureau of Economic Research, or NBER, in May examined inflation levels across the country and cross-referenced those with voter registry data. Researchers discovered that inflation rose higher in metro areas where more Republicans and independents lived. This was, in part, due to the COVID-era exodus when people from big cities moved in droves to smaller towns and drove up housing costs especially in those areas.
Another phenomenon is behind the trend, too. As the NBER study highlights, how people feel about inflation has a lot to do with who’s politically in charge.
“Respondents who share a political affiliation with the president have lower inflation expectations than those who do not,” the researchers wrote.
In other words, if a Republican president is in office, Republican voters tend to worry less about inflation. Same goes for the Democrats.
This trend is also evident in Gallup data. When President Donald Trump was in office, Democrats were far more worried than Republicans about their finances and standard of living. That dynamic switched when President Joe Biden took office.
This election season, however, these phenomena appear to be supercharged. People’s inflation concerns aren’t necessarily based on any Democrat or Republican taking control of the White House but, of course, Biden or Trump.
Americans have recently experienced one of the biggest cost of living shocks since World War II. And no matter its causes — which include global supply-chain issues, a surge in demand for certain products and services as well as corporate monopolies seizing on the opportunity to crank prices higher than necessary — several studies suggest that people tend to remember (and blame) who is in charge when prices start soaring.
Under the four years of the Trump administration, inflation rose a total of 7.3%, according to a Money analysis of Labor Department data. Since Biden took office, inflation has increased 19.2%.
While the rate of inflation has slowed significantly in recent months, D.A. Davidson’s survey shows American’s aren’t confident prices will stop climbing, regardless of who wins.
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.