Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Americans: It's still the economy, stupid

Nearly half of Americans think the economy is most important in deciding who should be the next president, according to a new CNN survey.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Goldman, CNNMoney.com staff writer

According to a new poll, Americans will choose the next president based on who has the best plan to stem the tide of inflation.
Do you believe your state is in a recession?
  • Yes
  • No

NEW YORK (CNNMoney.com) -- As the fight for votes intensifies, a new poll finds that more Americans say they'll be swayed by the candidate who can fix the economy and tame inflation, especially at the gas pump.

A national CNN/Opinion Research Corp. poll released Friday found that 49% of respondents think the economy is now the most important factor in deciding how they will vote in the upcoming presidential election. That's up from 44% in February and 29% in December.

The economy was by far respondents' largest concern. Of the more than 1,000 American adults surveyed in the poll, conducted April 28-30, only 19% said the Iraq war was the most important factor, and 14% said health care was most crucial.

Inflation worries grow: Nearly half - 47% - of respondents said the most worrisome economic problem is inflation, more than doubling the number who said the housing crisis was the top concern. Only 19% said the housing was their biggest economic concern, and 13% said it was unemployment that worried them the most.

"It's not surprising consumers are expressing concern, because energy prices have risen quite a bit," said Wachovia economist Mark Vitner. "Just look at how much consumers are spending on necessities."

Americans are dishing out a record 57% of their spending on necessities like food, housing, energy, health care, according to Vitner, leaving only 43% of their remaining spending money on other purchases.

And when it comes to rising prices, soaring energy prices worried Americans the most, with 68% saying it was their top concern. Twenty-three percent said the escalation in food costs was their biggest worry.

That's because food and energy prices are spiking.

According to a Commerce Department report released Thursday, inflation energy prices have risen 17% since March of 2008, and food prices are up 4.5%. Americans are experiencing pain at the pump, with gas prices reaching record levels. And shoppers have noticed a increase in food prices as well, especially in traded commodities like corn and soybeans.

Many economists blame the Federal Reserve's months-long rate-cutting campaign for prices spiraling out of control. The central bank cut its key funds rate from to 2% in April from 5.25% in September in an attempt to boost the economy and stave off a recession.

But the cuts are also inflationary, leading investors to pour money into commodity futures as a hedge against the falling dollar.

As a result, many economists believe the Fed signaled an end to the rate cuts for the time being in an effort to stem the tide of inflation. But that doesn't mean that prices will about-face overnight.

Good news for McCain? The presidential race is still wide open, with no overwhelming front-runner for the Democratic ticket.

But rising inflation could be good news for the presumed Republican nominee John McCain.

"Historically, when consumers are concerned about inflation, they vote Republican, and when they are worried about employment, that's when they tend to vote Democratic." said Vitner. "But who knows: there are a lot of people are critical of Fed, and the Bush administration, so that may not hold true this year." To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
Super Bowl bound? Things to do in Houston besides the big game If you're one of the thousands of fans are headed to Houston for the Super Bowl Sunday, here are five things to do when you're not at the stadium. More
Sneak peek at Super Bowl 51 ads The ghost of Spuds MacKenzie and an ad about immigration steal the show in the swell of upcoming Super Bowl ads. Advertisers are paying, on average, $5 million for 30-second spots during Sunday's game on Fox. But if you want to watch something other than commercials, the New England Patriots happen to be playing the Atlanta Falcons. More
Most expensive cars from the Scottsdale collector car auctions The ten most expensive cars sold at the annual Arizona collector auctions went or a total of $44 million. More