November 30, 2023

WASHINGTON — Treasury Secretary Janet Yellen pointed to the consistently higher prices that Americans pay for food and rent today, compared with pre-pandemic levels, as a major factor driving voters’ negative outlook on the economy.

“Although prices in general are rising less quickly, Americans still see increases in some important prices, including food, from where we were prior to the pandemic. And this remains notable to people who go to the store and shop,” Yellen said on CNBC’s Squawk Box Monday.

As overall inflation rates have come down over the past year, food prices have consistently outpaced baseline inflation, according to the Bureau of Labor Statistics. There are lots of reasons for this, ranging from the war in Ukraine‘s impact on grain prices to restaurants charging higher prices for menu items.

Rent price inflation also remains stubbornly high. “Rents are rising less quickly now, but are certainly higher than they were before the pandemic,” said Yellen.

“So I do think we’re making considerable progress in bringing inflation down. But Americans do notice higher prices from what they used to be accustomed to,” she added.

As President Joe Biden runs for reelection, this disparity between what the Biden administration sees as “considerable progress” and what voters see in their monthly household expenses is shaping up to be one of the strongest headwinds Biden faces.

Nearly 60% of registered voters disapprove of Biden’s handling of the economy, while only 38% approve, according to the most recent NBC News poll, released Sunday.

The numbers were in line with other polls that show large majorities of voters would rate the present U.S. economy as poor or fair, despite historic levels of job growth.

“You see all these high-level headline numbers, and those numbers don’t jibe with your economic reality,” Elizabeth Crofoot, senior economist at labor analytics firm Lightcast, recently told CNBC’s Jeff Cox. “I don’t know if there’s a right or wrong, it’s just people’s reality.”

Sunday’s NBC News poll also showed, for the first time, Biden trailing former president Donald Trump in a hypothetical 2024 presidential matchup.

Read more CNBC politics coverage

So far, the White House and the Biden campaign have stuck to a script explaining to voters that the U.S. economy is objectively strong, dubbing it “Bidenomics,” and sending the president across the country to tout his administration’s economic achievements.

Yellen hewed to this tactic on Monday. “It’s our job to explain to Americans what President Biden has done to improve the economy,” she told CNBC. “I think as inflation comes down, prices stop rising, and the labor market remains strong. Americans will begin to see that we have made meaningful progress.”

Whether millions of voters will recognize this progress between now and November of next year is anybody’s guess. But it could make the difference between Biden serving one term as president, or two.

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