The Misery Index is a simple metric developed during the worst economic days of the 1970s to measure how ordinary Americans are faring under existing conditions. The number is the sum of the U.S. unemployment rate and the consumer price inflation rate. With a current unemployment rate of 4.8 percent and inflation at 6.22 percent, the recent U.S. Misery Index sits 10.82 percent.
The two components of the Misery Index provide important information. As inflation increases, the everyday cost of living goes up. Higher unemployment is a valuable measurement of the number of people at risk of falling below poverty. The Misery Index thereby provides a quick view of the economy’s overall health, affecting average working Americans.
Higher consumer prices directly suppress the number of consumer goods that Americans can afford. Even for workers returning to the workforce after the worst of the COVID-19 pandemic, the value of wages falls as prices go up. Savings and investments become less valuable as inflation increases as well.
The Biden economy has brought the Misery Index back into play as an essential measurement. The number was 10.19 percent one month ago, so the one-month increase just seen is 0.63 percent.
Until the pandemic hit early in 2020, the Misery Index under President Trump sat at around 5 to 6 percent. When Biden took office as the pandemic continued, the index was 7.70 percent and has increased ever since.
As to the two components of the Misery Index, a recent paper from the Harvard School of Business claims that unemployment causes 1.7 as much “misery” as price inflation.
The current news regarding supply chain disruptions, legally questionable vaccine mandates, and concerns over the risk of hyperinflation has led to the only advice from the Biden administration being to “lower your expectations.”
Politically aware Republicans should be paying careful attention to the Misery Index and learning how to use it to educate voters as next year’s crucial midterm elections draw near.