Americans Cite Inflation as No. 1 Issue Despite Stabilizing Prices

Over the past four years, inflation has run well above normal levels, driving a broad-based price increase of more than 21%. In the past year, however, inflation has eased, recently falling to 2.4%, according to the Consumer Price Index. Still, concerns about inflation persist, likely fueled by the potential impact of tariffs.

The latest Economist/YouGov poll found that inflation and prices were the most important issue by a significant margin, with 21% ranking it the most important issue. The next three issues were jobs and the economy, and health care, both at 13%, and immigration at 10%. Inflation was the top issue for independents and Republicans, but health care was ranked slightly higher among Democrats, at 19%, compared to 17% for inflation.

Economic concerns persists despite nearly a full year of inflation remaining close to the Federal Reserve’s target of 2%. Last September, the inflation metric used by the Federal Reserve to determine monetary policy, the Personal Consumption Expenditures index, fell to 2.1%, though it crept up to 2.6% in December, prompting the Fed to stop decreasing the interest rate, a decision unpopular with the current administration.

In the latest PCE numbers, inflation registered at 2.3%, still slightly above the Fed’s target, which has caused prediction markets to forecast that the Fed will maintain the current interest rate of around 4.5% at its next meeting on July 30.

Despite the relatively low inflation, the number of people who rate it as their most important issue hasn’t changed much since inflation was at its peak. In a December 2022 Economist poll, 22% of people said that inflation and prices were the most important issues (jobs and health care were also at a very similar 12% each). This is very similar to the current concern over inflation, even though inflation was measured at approximately 6% at the time, compared to the current rate of close to 2%.

Concern over prices wasn’t always the top worry. In 2019, health care at 17% and the economy at 13% were the most important issues, followed by Social Security at 11%, though inflation and prices weren’t listed as an option at the time.

While questions surrounding tariffs are still on the table, inflation will likely continue to be a key concern. Before the initial tariff rates were introduced on April 2, Federal Reserve governors predicted that inflation would rebound to around 3% due to the increased prices resulting from the tariffs. However, actual tariffs seem to be broadly lower than expected, meaning the tariff effect on prices will also likely be lower than expected, keeping prices down.

Concern about tariffs remains, however, with 46% saying they are “harmful to the economy and consumers, with no real long-term benefits,” while only 36% say they “may cause short-term economic pain, but they lead to long-term economic growth.” Tariff talk is also directly feeding into concerns about prices, with 39% saying that tariffs will increase prices significantly, and 33% saying they will increase prices slightly.