Higher pay, higher costs: Public sees 1 as a problem

Poll finds many consumers focusing on ballooning inflation since pandemic

WASHINGTON — Americans’ overall income has accelerated since the pandemic, but so has inflation — and a poll finds that far more people are noticing the higher prices than the pay gains.

Two-thirds say their household costs have risen since the pandemic, compared with only about a quarter who say their incomes have increased, according to a poll by Associated Press-NORC Center for Public Affairs Research. Half say their incomes have stayed the same. Roughly a quarter report that their incomes have dropped.

The fast-rising prices that have been surging through the economy have forced many Americans to change their spending habits. About one-third say, for example, that they’re driving less often, and roughly 3 in 10 Americans say they’re buying less meat than they usually do.

In the past year, gas prices have jumped nearly 50%, and the cost of meat is up 15%.

Most people say the sharply higher prices for goods and services in recent months have had at least a minor effect on their financial lives, including about 4 in 10 who say the hit has been substantial. The poll confirms that the burden has been especially hard on low-income households.

On Friday, when the government will issue its latest reading on consumer prices, it’s expected to report that inflation soared 6.7% in November compared with a year earlier, according to economists surveyed by data provider FactSet. That would top October’s 6.2% year-over-year increase and would mark the highest consumer inflation rate in nearly four decades.

The findings in the AP-NORC poll underscore the financial pressures that this year’s spike in inflation has imposed on many Americans’ finances. Still, as they have since before the pandemic struck in March 2020, a majority say their own finances remain good.

Yet many Americans have soured on the economy in the past year, even though most economic indicators point to a stillsteady recovery, with near-record job openings, solid retail spending and a rebound in manufacturing. Only about one-third say the economy is “good,” down from about half who said so in March. That may illustrate why President Joe Biden hasn’t benefited politically from positive readings on the economy.

The poll, though, finds a sharp partisan split: Only about 1 in 10 Republicans describe the economy as “good;” more than half of Democrats say so. Yet when asked about their own financial situations, people are more positive and less divided along party lines. About two-thirds of Americans say their personal finances are in good shape. Roughly 7 in 10 Democrats and about 6 in 10 Republicans say so.

Analysts generally expect the economy to grow at a brisk 7% annual rate in the final three months of this year, boosting growth for all of 2021 to its fastest calendar-year pace since 1984.

The jobless rate has dwindled to 4.2%, from 6.7% a year ago.