Some of you will remember the phrase, “It’s the economy, stupid,” that Clinton’s campaign used in 1992 against President George H.W. Bush. This phrase keeps coming to mind while perusing President Biden’s recent rosy assessment of the current economic climate in the United States. In a speech given by President Biden on June 3 in Delaware, he noted, “A recent survey from the Federal Reserve found that more Americans feel financially comfortable than at any time since the survey began in 2013.”
I am curious to see the details that drove those results, given that Americans are facing a myriad of economic issues. Annual inflation hit 8.6% percent in May versus the current 5 percent pace of wage increases. Gas prices have risen above $5 per gallon. The stock market continues to flirt with bear market territory. While low unemployment is good, too much of a good thing can work against the economy. When too low, it creates negative consequences for businesses in reduced productivity and triggers inflation. A tight labor force is exacerbating shortages in the supply chain and impacting the service industry. There is also the war in Ukraine. And, finally, a shortage of baby formula.
While the current administration tends to put the blame for most of these items on either the war, Covid or the prior administration, Politico reported that Treasury Secretary Yellen publicly admitted that the administration got it wrong on inflation. Trying to recover, the Fed announced the biggest rate hike in 28 years, 75 basis points, and indicated a similar increase could be coming in July.
New Hampshire is certainly not immune to what is happening nationally. According to the Union Leader, Liberty Utilities recently filed to double its price per kilowatt hour, and Eversource is expected to follow suit. It’s an election year, and while Gov. Sununu remains popular, five Republican candidates have filed to run against him in the primary. I happen to like Gov. Sununu and think he has done a fine job leading our state through a tumultuous time. However, voters quickly forget the past when it is time to go to the polls and focus on what their current point of pain is. Voters likely won’t accept finger-pointing at Washington for economic woes in New Hampshire. As a reminder, “It’s the economy….”