Sale prices are displayed for items at a grocery store in San Rafael, California, on Sept. 10, 2024. Grocery prices are just one piece of the U.S. economy, which is key to many voters in their pick for president. (Photo by Justin Sullivan/Getty Images)

The economy is key to many voters in their pick for president, but that fervor also makes  it an attractive subject for distortions, misinformation, and oversimplification.

Nearly eight  in 10 U.S. voters say that the economy is one of the most important issues to them in this upcoming presidential election, according to an AP-NORC poll conducted in September. Although 66% of voters say the economy is very or somewhat poor, six in 10 also say their personal finances are good.

Millions have already cast their ballots through early or mail voting. But those who are still deciding between the two main candidates – Democrat Kamala Harris and Republican Donald Trump – have until Nov. 5 to wade through various myths and exaggerations to understand the state of the economy and each candidate’s record on related issues.

What is the state of inflation in the U.S.? 

The most recent cycle of inflation reached its peak in June 2022 at 9.1%. Inflation has fallen considerably since then and to a more manageable 2.4% in September’s Consumer Price Index, a measure of inflation. Wage growth, meanwhile, has beaten inflation for more than a year. The Federal Reserve cut its key interest  rate by half of a percentage point for the first time in four years in September after inflation neared  toward its goal of 2%.

But those macro figures don’t hit home with everyone, because of the prices of groceries and other essentials.

The literal prices that people see on goods make them think that they’re not doing as well because they feel that they are higher than they think they should be,” said Elise Gould, senior economist at the left-leaning Economic Policy Institute But, those prices are actually lower as a share of their wages than they were four years ago.”

This doesn’t mean that many voters’ experiences of struggling to afford basic items aren’t real. The cost of housing is very high and puts a strain on people’s budgets. The Fed’s interest rate policy affected credit card rates, and thus, people’s ability to make purchases.

Gould said that despite the positive news of slowing inflation, the lack of long-term wage growth before this recent increase has been hard on many Americans.

“Even though things are good, we know that for the vast majority of people over the last several decades, they’ve been faced with relatively slow wage growth and so it can be hard to feel like you’re going to get ahead,” she said.

Was unemployment higher under Biden or Trump? 

The unemployment rate under Donald Trump was fairly low, at 4.7%, when he took office in 2017 , and it mostly trended lower until the beginning of the pandemic. It then shot up to 14.8% in April 2020 and fell sharply for the rest of Trump’s term, which ended in January 2021. The unemployment rate was 6.7% during Trump’s last full month in office.

The labor market has been fairly hot under President Joe Biden. The unemployment rate was 6.4% during the month he and Harris were sworn into office. But since then, it largely fell, and from February 2022 to April 2024, the unemployment rate was below 4%. In September, the unemployment rate was 4.1% but the economy continues to show strong job growth.

Looking at the Biden-Harris administration’s record and Trump’s record outside of the immediate economic impact of the recession and supply shocks during their presidencies, unemployment remained fairly low. Overall, unemployment averaged 3.8% since 2022 and averaged 4% between 2017 and 2019, before the pandemic hit the economy in 2020.

Labor force participation rates and the employment-to-population ratio, measures of the number of people in the labor force and workers employed versus the working age population, were high in the last jobs report and show signs of a healthy labor market.

Skanda Amarnath, executive director of Employ America, a left-leaning group focusing on economic policies, said that it’s also important to understand the percentage of the population adjusting for age, the prime age employment rate. It is marginally higher now, by about 0.3%, than it was right before Covid struck, during the Trump administration, he said.

“We’ve seen generally slower paces of employment gains more recently and that might be just because a lot of people are now back in the labor force itself. It’s probably a little harder to grow employment quickly when you’re coming from a high level as opposed to a low level,” Amarnath said. “Nevertheless, we’re at an employment rate where there’s been a reasonably strong labor demand, a little bit combined with the fact that people are also moving out into their retirement years.”

The American Rescue Plan Act, CHIPS and Science Act, Inflation Reduction Act, and bipartisan infrastructure deal, enacted during Biden’s presidency, helped fuel the recovery, Amarnath said. The CARES Act, which was signed into law byTrump, likely helped the U.S. avoid a protracted recession, he added.

What would Trump’s proposed  tariffs do to the U.S. economy

In an interview with John Micklethwait, editor-in-chief of Bloomberg News at the Economic Club of Chicago on Oct. 15, former president Trump said tariffs would be good for economic growth.

“We’re going to bring companies back to our country … We’re going to protect those companies with strong tariffs because I’m a believer in tariffs,” he said.

The Trump campaign has also proposed a 60% tariff on goods from China, one of the U.S.’s largest trading partners, and 10-to-20% on other imports. The Tax Foundation, a business-friendly research think tank, estimated that if Trump’s proposed tariffs were to be implemented, it would reduce GDP by at least 0.8% and eliminate 684,000 jobs.

Tariffs would likely result in lower trade and retaliatory tariffs from other countries, raising prices, and costing each household between $1,900 to $7,600 in 2023 in dollars, according to the Budget Lab at Yale, a nonpartisan policy research center.

“If the tariff wars back in President Trump’s first term are any indication, they’re going to respond with their own tariffs and other trade actions,” said Mark Zandi, chief economist at Moody’s Analytics. “Broadly, tariffs are going to raise prices for imported goods, weaken consumer purchasing power and slow growth.”

Zandi added that although the retail sector would be particularly hard hit by these tariffs, he doesn’t think any industry would come away unscathed by the policy.

How do Harris and Trump’s economic plans compare? 

Harris has said her plans, which include building more affordable housing supply, restoring and expanding the child tax credit, and supporting legislation to expand labor rights, have been approved by respected economists and sources of financial research.

“Please do check out the Wall Street Journal or Goldman Sachs or the 16 Nobel laureates or Moody’s, who have all analyzed the plans and said mine will strengthen the economy, his will make it weaker,” Harris said.

The reality is a little more complicated. Some of the reports Harris referred to do not say the economy would weaken under Trump but would grow less than the economy under Harris in certain scenarios, depending on the political breakdown in Congress.

Others show the GDP falling more as a result of Harris’ proposals. The Penn Wharton Budget Model looking at Trump and Harris proposals shows the GDP falling 0.4% under Trump by 2034 and declining 1.3% under Harris over the same period, but notably, it does not factor in proposals not to tax tips, mentioned by both candidates, or Trump’s tariff policies.

Before Biden withdrew his candidacy, 16 Nobel-prize winning economists said Biden’s investments in the economy through signing legislation to improve infrastructure and manufacturing would boost economic growth. They spoke out against Trump’s tariff plans. Although Harris is part of the Biden administration, they did not address her specific plans as a candidate. On Wednesday, 23 Nobel-prize winning economists, including the economist who led the last letter, Joseph Stiglitz, endorsed Harris’ specific policies.

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Kristie Hilliard opened her new shop, Kristie Kandies, in downtown Rocky Mount, N.C., after getting tired of her factory job at the local Pfizer plant. She’s seen a steady flow of customers, but says she’s doesn’t think either Vice President Kamala Harris or former President Donald Trump would change her economic fortunes. (Kevin Hardy/Stateline)

Editor’s note: This five-day series explores the priorities of voters in Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin as they consider the upcoming presidential election. With the outcome expected to be close, these “swing states” may decide the future of the country.

ROCKY MOUNT, N.C. — The signs on the empty historic buildings envision an urban utopia of sorts, complete with street cafes, bustling bike lanes and a grocery co-op.

“IMAGINE What Could Be Here,” gushes one sign outside the empty, Neoclassical post office. “IMAGINE! A Vibrant Downtown,” reads another mounted on the glass front of a long-ago closed drug store.

In a place like Rocky Mount, North Carolina, it’s not such a stretch: Just across the street, white-collar workers peck away at laptops and sip lattes at a bright coffee bar lined with dozens of potted tropical plants. A few blocks away, a mammoth events center routinely brings in thousands of visitors from across the country. And alongside a quiet river nearby, a meticulously redeveloped cotton mill would be the envy of any American city, with its modern breweries, restaurants and loft living.

An industrial community long in decline, Rocky Mount is slowly building itself back. But in this city of about 54,000, sharply divided by race and class, many residents struggle to cover the basic costs of groceries, housing and child care.

North Carolina reflects the duality of the American economy: Unemployment is low, jobs are increasing and businesses are opening new factories. But high housing and food costs have squeezed middle-class residents despite the gains of rising wages.

“The economy stinks,” said Tameika Horne, who owns an ice cream and dessert shop in Rocky Mount.

Her ingredient prices have skyrocketed, she said, but she can’t continuously raise prices on ice cream cones or funnel cakes. She said last month was her slowest ever, with only $2,000 in sales.

It’s not just the slow sales at her store: Only a few years ago, she paid $700 a month to rent a three-bedroom apartment. Now, her similarly sized rental home costs her $1,350 a month.

Aside from the ice cream shop, Horne also runs a cleaning business with her family and just started a job delivering packages for FedEx.

“It’s just hard right now,” she said.

The economy, a top issue for voters during any election, is particularly important this presidential cycle: Prices of necessities such as groceries aren’t rising as fast as they were, but years of post-pandemic inflation have soured voter attitudes.

And across the country, millions of families are struggling with rising housing costs. In four of the seven swing states — Arizona, Georgia, Michigan and Nevada — more than half of tenant families spend 30% or more of their income on rent and utilities, according to the 2023 American Community Survey.

In North Carolina, voter anxiety about the soaring rents and grocery bills could tip the scales.

“In terms of its political influence, it’s not actually your personal financial situation that is important, it’s your vision of the national economy,” said Matt Grossmann, a political science professor at Michigan State University. “So if I get a raise, I tend to credit myself. If I see higher prices, I tend to blame the government or the current situation.”

Around the corner from Horne’s ice cream store in downtown Rocky Mount, Kristie Hilliard greets a steady flow of customers to her new shop, Kristie Kandies. An armed cop, a nurse in scrubs and waist-high kids trickle in to grab a sweet treat.

After getting tired of her manufacturing job at the local Pfizer plant, Hilliard started making confections at home. As her following grew, she got a concession trailer and now has a storefront selling candied grapes, plums, kiwis and pickles.

Hilliard’s treats have attracted attention on social media, causing some buyers to drive in from as far away as Pennsylvania, she said.

A Democrat, she said she still hadn’t made up her mind on the presidential race. But she doesn’t believe either a Harris or a Trump administration would drastically change much for her business.

“They ain’t doing nothing for me now,” she said. “So, what would change?”

A community divided looks to the future

About 60 miles northeast of the state capital, Rocky Mount lies between the prosperous Research Triangle area and North Carolina’s scenic beach communities.

Railroad tracks and a county line slice through the middle of downtown. On the one side is the majority Black and lower-income Edgecombe County. On the other, the more prosperous and whiter Nash County.

While some officials say long-standing attitudes centered on division are fading, the county line has for decades provided a clear delineation of class, race and politics.

Edgecombe County is a Democratic stronghold, but the more populous Nash County is a bellwether of sorts. It was among the 10 closest of North Carolina’s 100 counties in the last presidential election, and one being closely watched this cycle. With 51,774 ballots cast, President Joe Biden took Nash County by 120 votes.

Around Rocky Mount’s downtown area, stately red brick churches and banks line the wide streets. But just a few blocks away, weeds overtake vacant lots, glass is smashed out of abandoned buildings, and razor wire tops the fencing of no-credit-needed car lots and used tire shops.

While the nearby Raleigh metro area has experienced explosive suburban growth, Rocky Mount Mayor Sandy Roberson said his community has seen an erosion of its middle class with the loss of corporate headquarters and factory jobs.

But he’s optimistic.

Young business owners are investing in downtown. Industries with operations in the Raleigh area are moving east. And both Republicans and Democrats just celebrated the news that Natron Energy plans to build a $1.4 billion electric vehicle battery plant nearby that will employ more than 1,000 people.

“We’ve got a lot of great things that are happening,” the mayor said. “But the key is, how do you build and retain a middle class? Because that’s who does the living and the dying and the investing in a community.”

The mayor’s position is nonpartisan, but Roberson is a Republican who in 2022 ran in the Republican primary for a congressional seat here. This election, however, is a difficult one for him.

Roberson said the economy and his financial position were unquestionably better during Trump’s term, but the Jan. 6, 2021, insurrection and the chaos of the last Trump presidency make him hard to support. At the same time, Roberson worries about Harris’ economic policies; he believes the current administration has accelerated inflation by pumping too much money into the economy.

“At some levels, it feels like I’m voting for somebody who wants to either be a dictator or somebody who wants to create a socialist state,” Roberson said. “And I’m not in either place.”

‘Nobody is immune’

In North Carolina and other swing states, Trump’s television ads hammer the vice president over high prices and “Bidenomics.”

Nash County Republican Party volunteer Yvonne McLeod said the economy, along with immigration, are the top concerns locally. Businesses still struggle to hire, rents have soared and food prices are still up, she said.

“Economically, we’re hurting,” she said.

Democrats must be honest about the financial pressures facing voters, said Cassandra Conover, a former Virginia prosecutor who now leads the Nash County Democratic Party. She noted that Harris ads running in North Carolina speak directly to middle-class concerns.

“Nobody is immune from what’s going on,” Conover said. “She’s telling all of us who are hurting, ‘I know, and we’re working for you.’”

Polling has shown voters are sour on the economy, with 63% saying the economy was on the wrong track in a Harvard-CAPS-Harris poll released this month. Republicans take a far dimmer view than Democrats.

“From past experience, we would expect Harris to inherit some of the blame or credit for the current economy, but so far in the polls, I would say there has been a surprising willingness of voters to not extend the blame for inflation that they had for Joe Biden onto Kamala Harris,” said Grossmann, the Michigan State University professor.

Housing anxiety

Housing costs have outstripped income gains in the past two decades, but those challenges have intensified since the COVID-19 pandemic, when demand increased, construction costs soared and interest rates spiked.

“It doesn’t matter if you’re a buyer or a renter,” said Molly Boesel, an economist at CoreLogic, a financial services information company. “You’re seeing your housing costs increase.”

Affordability is “the No. 1 issue” among voters in Nevada this year, said Mario Arias, the Nevada director of the Forward Party, a centrist political party founded by former Democratic presidential hopeful Andrew Yang.

A resident of the Las Vegas area, 30-year-old Arias said housing is his biggest financial concern. Throngs of Californians have moved into Nevada to lower their housing costs, but it’s driven up costs for everyone else, he said.

“If you want to get out of being a renter, you have to be in not just a good financial situation, but in a very stable financial situation,” he said.

The Federal Reserve cut interest rates last week for the first time in four years, whichcouldopen the housing market to more homebuyers as mortgage rates ease in the coming months.

The Biden administration has proposed several housing-related policies, including incentives to loosen zoning regulations and capping rent increases from corporate landlords. Harris has announced a proposal to provide up to $25,000 in housing assistance for a down payment to some potential first-time homeowners and promised tax incentives that she say’s would lead to 3 million more housing units by the end of her first term, if she’s elected.

Trump has not waded far into the details of how he would address the affordability issue in a second term. He has said he plans to bring down prices by barring immigrants in the country without legal authorization from getting mortgages. But his proposed immigration policies could further reduce the labor force for building homes. Previously, Trump’s administration talked about trying to cut state and local housing regulations, and it suspended federal regulations on fair housing.

In North Carolina, more than a quarter of the state’s households are cost burdened, meaning they spend more than 30% of their income on housing costs. It’s particularly challenging for renters, nearly half of which are cost burdened, according to the North Carolina Housing Coalition, a nonprofit affordable housing organization.

Stephanie Watkins-Cruz, housing policy director at the coalition, noted that the federal government’s calculation of fair market rent in North Carolina has shot up 14% in just one year — and 38% over the past five years.

“So unless everybody and their mama’s getting 14 to 20 to 38% raises, the math begins to not math,” she said.

It’s a familiar challenge in every swing state.

Wendy Winston, a middle school math teacher in Grand Rapids Michigan, said that though no one political candidate is responsible for the state of the economy, the cost of groceries and housing is hard to ignore.

“I don’t think the economy is terrible. It is sometimes difficult to make ends meet,” Winston said. “I don’t believe that it’s the fault of the government or policies of the government. I feel like it’s the individual corporations trying to make profit off the backs of the middle class.”

The average rent for a two-bedroom apartment in Grand Rapids is about $1,550 a month, according to rental site Apartments.com. Though Michigan ranks fairly average compared with other states for rent prices, the state saw some of the steepest rent increases in the country in recent years, and wages have not kept up. Residents unable to rent new, “luxury” apartments find themselves short of options for places they can afford.

“It’s not just cost, it’s availability,” Winston said. “There are a lot of new housing developments. Apartments and condos and things are being built, but I’m priced out of them. And I have a college degree, so I don’t think that’s helping our families.”

Hoping for revival

Back in North Carolina, near the banks of the Tar River, Rocky Mount Mills has a healthy waiting list for the apartments and the revamped homes it rents.

A former cotton mill built and once operated by slave labor, the campus closed in 1996, reopened in 2015 after a $75 million renovation, and is now home to breweries, restaurants and dozens of high-end apartments.

Chapel Hill native and entrepreneur Cameron Schulz never had Rocky Mount on his radar. But the development’s brewery incubator helped him launch HopFly Brewing Co., now one of the state’s largest self-distributing breweries.

After outgrowing its original space, HopFly relocated to Charlotte, but still operates a taproom in Rocky Mount. The Mills project has reinvigorated the city, Schulz said.

“Rocky Mount’s got one of the most beautiful, quintessential downtown strips that I’ve ever seen anywhere,” he said. “We’ve just got to fill it up with cool places to go, and people to go into those places.”

Main Street suffered for decades after the arrival of malls and a highway bypass. Over at Davis Furniture Company, two employees keep watch over an empty storeroom of sofas, beds and home decor.

Co-owner Melanie Davis said business has been good, though she believes customers are anxious about the presidential election. Pointing down the sidewalk to new restaurants and some loft apartments overlooking the railroad tracks, Davis said she’s bullish on the trajectory of downtown.

“I do feel like we’re on an upswing,” she said.

Michigan Advance’s Anna Liz Nichols contributed reporting.

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