Keep our Republic plans to hold three more of these events across the state.
In economic news and the presidential campaign, what is the disconnect between lowered inflation,
low unemployment and higher wages, and consumers who feel the pain of high costs at the checkout
and then blame the current Biden administration longing for what they believe to be the healthy
on days of Trump.
We try to unpack this now with Chief Analyst at the Center for Business and Economic Insight
at UW-Stevens Point, Kevin Barr.
And Professor, thanks very much for being here.
Thanks for having me back, Chuck.
So by important measures, the economy is strong.
Why aren't average consumers feeling it if they aren't?
A complex question, but I think the big probably sticking point for some people in terms of
not feeling the strength of the economy, the strength of the stock market, has basically
been food prices.
Food prices are up significantly.
If you look over the past five years, they have risen about 26% in the United States,
they're up about 25% in Canada, they're up 30% in the European Union, they're up 35%
in the United Kingdom.
And that food price, I mean, it's tough because when food prices go up, it's not like you
can avoid buying food, it's something that everybody needs, and particularly for lower
and middle income Americans, that takes up a bigger portion of your overall budget.
So it really hits lower and middle income Americans' heart.
But that being said, it's been global factors that have increased global food prices, and
that includes anything from Putin invading the Ukraine, which caused wheat prices to
start 50%.
The Ukraine and Russia account for about 25% of global wheat exports, agricultural fertilizer
despite Russia's number one, export of agricultural fertilizer, then you're throwing
things like the avian flu, supply chain problems, and then overall inflation has been up, so
production costs are up and labor costs are up, so this is like it's a global thing.
So it's not, as some would strongly suggest, quote, corporate greed, where profits are
up over 40%.
Well, you can argue that that plays into it.
I mean, that would be one of the factors.
Global profits are basically at record levels back in 2022.
They backed off a little bit, but they're still up significantly, say relative to 2019.
So that plays into it, but then you also get into, well, what can be done to maybe less
in industry concentration in some areas of the food industry, and that's kind of a long
term thing.
You're not going to be selling that overnight.
So I read a saying that prices rise like a rocket and fall like a feather.
Is that what is happening here, or have market forces kind of changed more significantly?
Well, it's sort of a combination.
Prices typically go up a lot easier than what they come down.
I mean, if you go back and look at the history of the United States, prices in a given month
overall don't really come down too often.
Again, with kind of the recent run up in cost, production cost, our up transportation cost,
our up labor cost, our up.
So it's a lot harder to get prices to come down.
Some products, yes, I mean, there's going to be fluctuation in some products, but the
overall price level, it's tough to drive down.
What else is contributing to people feeling like the economy is bad for them?
You can look at the housing market.
Housing's been tough and a lot of the increase in, for example, housing prices went up about
the increase in housing prices in the first three years and this decade match the increase
in housing prices over the entire last decade.
And that has really been driven by the drop in supply, which started to occur in 2020.
So if you look at the overall listings available housing that has increased, certainly contributed
significantly to the cost of housing and housing prices.
So between cost of housing and food prices, those are the big sticking points for the
economy.
If you look at the labor market, the strongest since the 1960s, if you look at the stock
market, the US stock market, large company stocks were up about nearly 14% for the five
year period at the end of 2023.
That is basically the strongest stock market in the world.
Last year, just alone, large company stocks were up about 25% tech stocks were up 43%.
So the job market's great in terms of we've got more Americans working now than ever before.
We've had job growth ever since January of 2021.
The unemployment rates have been below 4% for 24 consecutive months.
Real wages have risen over the past year.
So wages are up.
Job market has been excellent, so the stock market's been great.
So how much is political messaging contributing to consumers' attitudes about their own economic
well-being?
I think political messaging plays a big factor.
Let me throw something out just so we kind of hit both sides of the aisle, if you will.
I personally don't believe you can blame Biden for the run-up in food prices.
Back in 2020, for example, US oil production was cut 25% in the first five months of 2020.
It was cut 15% in 2020 relative to 2019.
That was under the Trump administration.
You can't blame Trump for that.
The global price of oil tank from $70 to about $25 a barrel on the first half of 2020.
So oil companies cut their production, lowered their levels of inventory.
Now that increased, excuse me, that contributed to the price increase in oil and in gas prices
the following year.
But again, that was driven by global factors.
You couldn't blame Trump for the reduction in oil production, and there's global factors
that play as far as food prices.
I don't think Biden should be blamed for that.
The only thing you could say contribute to that, we've had a very strong economy, strong
demand, strong job market.
A lot of people are working, if you had unemployment at 10%, rather than below 4%, that would make
a difference in the overall demand.
All right.
We leave it there.
Professor Barr, thanks very much.
Thank you very much.
For more on this and other issues facing Wisconsin, visit our website at pbswisconsin.org and
then click on the news tab.
That's our program for tonight, I'm Frederica Freiberg.
Have a good weekend.
So, tease and rap and keep Professor Barr in his seat.
Apparently there was a technical problem.
I prefer not to think of it as my own mistake, but apparently something was going on in my
last thanking people and saying, good night.
So we're going to do that again.
And it's a good thing you actually don't have an appointment to get to apparently.
Thank you.
So this is a full screen, right?
Right now.
Okay.
For more on this and other issues facing Wisconsin, visit our website at pbswisconsin.org and
then click on the news tab.
That's our program for tonight, I'm Frederica Freiberg.
Have a good weekend.