Yahoo Finance Inflation continues to hammer key midterm election states
President Biden and the Democrats are hoping to ride a recent hot streak into November.
The party is banking that things like passage of the climate-focused Inflation Reduction Act, falling prices at the pump, and abortion being at the top of voters' minds may give them a chance to hold onto control on Capitol Hill.
But there may be serious speed bumps ahead. If the worse-than-expected inflation data released on Tuesday weren't bad enough for the party, the hot prices are hitting many pivotal states the hardest. The West and South have seen the most persistent inflation, and they are also home to some of the races likely to decide if Republicans take control of the Senate in the fall.
During a recent Yahoo Finance Live interview, Stifel Chief Washington Policy Strategist Brian Gardner predicted that “the most likely scenario is a Republican House and a Democratic Senate,” though he quickly added, “with still several weeks to go, things can change.”
Inflation and embattled Democratic incumbents
Overall, the Consumer Price Index (CPI) in August reflected an 8.3% increase over last year, but it is far higher in certain metropolitan areas.
The highest in the nation is the Phoenix-Mesa-Scottsdale region in Arizona, where Americans have experienced 13% inflation over the last year. The state is also home to a crucial Senate race pitting incumbent Democrat Mark Kelly against Trump-endorsed Republican Blake Masters.
Kelly has enjoyed a small polling lead in recent weeks, while Masters immediately jumped on the Tuesday’s numbers, tweeting that the data “confirms what every normal person — anyone who buys groceries and pays utility bills — already knows: the Biden price hikes continue.”
The summer of Democrat optimism is over.
— Blake Masters (@bgmasters) September 13, 2022
Atlanta-Sandy Springs-Roswell in Georgia has experienced 11.7% inflation in the last year — the second highest rate in the nation.
And like Arizona, it's also home to another embattled Democratic incumbent defending a Senate seat. There, Democrat Raphael Warnock and challenger Herschel Walker have been neck and neck in the polls for months. The two candidates are set to debate on October 14 in a contest that is expected to come down to the wire.
Inflation is also white hot around Tampa (11.2%) and Miami (10.7%) in Florida as well as in the Houston area of Texas (9.5%). Both states are in the midst of closely-watched contests where Democrats have been looking to surprise some observers and be on the offensive as their electoral fortunes have improved.
Other battleground contests, especially in the Midwest and on the East Coast, are experiencing inflation at or below the national average. Philadelphia, as one example, is at the center of the most expensive Senate race in the country right now and saw inflation drop a bit last month. It currently sits at 8.1% over the last year.
Continued impact of gas prices
And even as Democrats tout falling gas prices around the country, prices at the pump remain a central issue in many contests.
92 days in a row of falling gas prices.
All of July, all of August, and now, half way through September.
-- Most common pump price in US is $3.39
-- More than one in ten pumps at $2.97 or LOWER.
Data from @AAANews and @GasBuddyGuy— Ronald Klain (@WHCOS) September 14, 2022
Gas prices and the midterms have been an issue for months, with prices remaining high in the Western United States. The latest data from AAA Wednesday morning has prices still over $4 a gallon in Arizona, ensuring that it will remain an issue in the contest between Kelly and Masters between now and November.
And prices are at $4.93 a gallon in Nevada, where another Democratic incumbent — Sen. Catherine Cortez Masto — is trying to hold on to her seat.
Both Kelly and Cortez Masto have been pushing for a federal gas tax holiday all year.
Republicans meanwhile have been blaming Democrats for high prices all year and don't look to stop anytime soon. Relentless price hikes are expected to boost conservatives, and a spokesperson for the National Republican Congressional Committee immediately pounced on Tuesday's numbers to say “Democrats’ so-called ‘Inflation Reduction Act’ does not appear to be working. Americans are paying record prices for groceries and utilities.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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