Periodically economists attempt to gauge how Average Americans are weathering the ups and downs of the economy. By using the simple yet clever technique of adding the U.S. unemployment rate (4.8%) to the rate of inflation (5.39%) economists can quantify the economic well-being of the country into a misery index. The current U.S. Misery Index is 10.19%.
But what exactly does the Misery Index tell us? First, we know that as the rate of inflation goes up, the cost of living increases. Next, as the unemployment numbers rise, more and more people fall into poverty. Consequently, the Misery Index acts as a kind of shorthand or metric with which to gauge the health of the economy as a whole since both employment and inflation impact the average American wage earner.
So is 10.19% on the misery index a good thing? The short answer is no.
Since September’s inflation rate was a slight uptick from August’s and high inflation is detrimental to the economic health of everyday Americans, the Misery Index shows a worrying snapshot of the upward trend of recent inflation rates and thus a downward trend of the economy itself. At the same time, the government likes inflation because it allows it to repay debts with so-called “cheaper” dollars, but it soon becomes apparent to consumers that their money is worth less than it was just a few months ago when someone else was in the White House.
Does it really matter who is in the White House? The answer is yes.
When the Misery Index is placed over the terms of the U.S. presidents, it becomes fairly obvious that most Americans have been better off under most Republican (red) presidents. It’s even apparent that they were enjoying a fairly robust economy with a low Misery Index hovering around 5.0% to 6.0% under Donald J. Trump until the COVID-19 pandemic hit. It’s also apparent that the Biden administration’s economic policies are increasing the everyday American’s misery.
Americans would do well to remember this misery and these economic numbers when it comes time to vote in 2022 and 2024.