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

candidates_NEW.03.jpg
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

Features
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:
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More


Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.