As Harris and Trump debated, a key economic statistic loomed large | Economy

Hours before United States Vice President Kamala Harris and former President Donald Trump faced off in their high-stakes presidential debate, the US Census Bureau released some key economic data.

While neither candidate mentioned it during the debate, it could prove crucial to the outcome of the race for the White House because of what it says about the candidates’ respective strengths and weaknesses.

The figures showed that the median income of US households, when adjusted for inflation, rose last year for the first time since the COVID-19 pandemic.

The median household took in $80,610 in 2023, up from $77,450 in 2022, after three straight years of decline.

While reflecting the post-pandemic recovery of the economy, the figure was still slightly below the $81,210 recorded in 2019.

The statistic goes a long way towards explaining the dynamics of the race and why the candidates are running neck and neck.

Time and time again, voters have told pollsters that the economy is their No 1 issue.

In a Pew Research Centre poll released on Monday, 81 percent of registered voters said the economy was “very important” in deciding their vote – 16 points higher than the proportion of those who answered the same about healthcare.

While Trump has a mountain of political baggage and is deeply unpopular among broad swaths of the American electorate, the Republican candidate has also consistently been rated as more trustworthy on economic issues than both Harris and current President Joe Biden, whom she has served for nearly four years as vice president.

The Census Bureau figures offer a convincing explanation for Trump’s edge.

During the majority of the time that Harris served under Biden, Americans saw their spending power decline due to high inflation, which peaked at 9.1 percent in mid-2022.

Under Trump, inflation-adjusted median household income rose from $75,100 in 2017 to $79,560 in 2020 (after peaking at $81,210 in 2019).

Inflation has since eased – hovering just under 3 percent in July – and, as Harris would no doubt argue, Americans’ inflation-adjusted earnings are once again on the rise.

Though presidents and their critics alike tend to act like the White House has God-like control over the economy, it is also true that a lot of the inflation that occurred on Biden’s watch was out of his control, but the result of snarled supply chains worldwide.

Still, polling bears out perceptions that Americans did well financially under Trump, even though his final year in office coincided with the economic wrecking ball of COVID-19.

A CBS News poll in March found that 65 percent of respondents remembered the economy under Trump as being good, nearly double the number who felt the same way about Biden’s economy at the time.

As the vice president, Harris faces the delicate task of claiming credit for the positive aspects of Biden’s economic legacy – which include robust economic growth and low unemployment – while not being saddled with the blame for the high inflation that weighed on his popularity.

Of concern for Harris, a CBS News poll taken last month found that 48 percent of respondents believe that prices will go up if she is elected, compared with 37 percent who answered the same about Trump.

Harris’s task to define herself is especially pressing as polls show that more than one-quarter of voters feel they do not know enough about her.

At Tuesday’s debate, Trump predictability hit out at Harris on the cost of living, describing inflation as “a disaster” for Americans from all walks of life.

“People can’t go out and buy cereal or bacon or eggs or anything else,” he said. “The people of our country are absolutely dying with what they’ve done.”

For her part, Harris cast Trump’s plans for tax cuts as a gift to billionaires and corporations, and likened his proposals for sweeping tariffs on imports to a “sales tax” on the middle class.

“Donald Trump has no plan for you and when you look at his economic plan, it’s all about tax breaks for the richest people,” she said.

The vice president also highlighted proposals she has put forward as part of her pledge to create an “opportunity economy,” including a $50,000 tax deduction for new small businesses and a $6,000 child tax credit.

“What I have done and what I intend to do is build on the hopes and aspirations of the American people,” she said.

With the polls showing the election on a knife edge, it remains to be seen whether Harris and Trump’s first face-to-face matchup will have much bearing on the economic mood of the country.

If it does, it could very well decide the election.