Mike Blake / Reuters file

Gas prices have been falling sharply from near-record highs seen recently in California, where supplies were constrained by a major refinery shutdown.

It's no surprise that voters in Tuesday's presidential election identified the economy as the No. 1 issue in the campaign, far ahead of health care and the federal budget deficit.

But it was a surprise that nearly four in 10 voters identified rising prices as the biggest economic problem facing people like them. That's nearly as many voters as said that unemployment was the biggest problem. 

After all, unemployment has long been considered the toughest and most intractable economic problem, with more than 12 million people out of work and actively looking for a job. The unemployment rate, which hit a 25-year high of 10 percent early in Obama's presidency, has only fallen below 8 percent recently.

Meanwhile inflation has generally been running well under 2 percent, and Federal Reserve bankers repeatedly have said they feel comfortable that low inflation allows them to keep interest rates at rock-bottom levels.

Yet in an exit poll of more than 25,000 voters conducted by NBC News, 37 percent identified rising prices as the biggest problem facing people like them.

Unemployment was cited by 38 percent, only slightly more than the number who said inflation was their top economic concern. Taxes were named by 14 percent and the housing market was the top concern of 8 percent.

Chris Christopher, director of U.S. and global consumer economics for IHS Global Insight, said it makes sense that people would point to rising prices because it's something people deal with on an everyday basis.

“It’s a personal question: What affects them directly?” he said.

Unemployment is only the most worrisome issue for people who are either out of a job or fear they will be, Christopher noted. On the other hand, almost everyone has to pay for things like food, gas, health care and housing — and likely has some sense of whether those bills are going up or staying the same.

Christopher’s research has shown that just a small increase in gas prices can affect how consumers are feeling about their finances, even though the cost of gas represents only a tiny portion of most people’s household budget.

Still, the fact that so many people named rising prices was somewhat surprising because consumer prices actually haven’t been rising all that much.

Gas prices have been falling rather sharply recently, with the exception of regional spikes related to Superstorm Sandy.

Electricity and natural gas prices, which tend to be volatile, are lower than they were a year ago, according to the government data.

Food prices are expected to go up in the coming months because of this year's severe drought, which destroyed many crops used for feed. But so far this year food prices have not risen much, in part because of unusually low fruit and vegetable prices, according to the Agriculture Department.

Overall, the USDA is projecting food prices will rise 2.5 to 3.5 percent in 2012 and 3 to 4 percent in 2013.

Christopher said he expects wage gains to continue to outpace inflation, in large part because prices have been rising so slowly.

President Barack Obama’s Republican challenger, Mitt Romney, tried to make rising prices part of his appeal for why the country needed new leadership. In the first presidential debate, he pointed out that median incomes have fallen in recent years relative to rising prices for everything from gas to food to health care.

“Under the president's policies, middle-income Americans have been buried. They're just being crushed,” Romney said.

The exit polls could be a sign that Americans share Romney’s concern about rising prices. But clearly Romney wasn’t able to convince enough people that was a good enough reason to replace Obama.

Still, the exit polls showed voters do think there is much work to be done to improve the economy. More than three-fourths of those polled said the economy is either “poor” or “not so good.”

Seth Perlman / AP

Steve Niedbalski shows his drought and heat stricken corn in Nashville, Ill. Farmers in parts of the Midwest are dealing with the worst drought in nearly 25 years.

Shoppers across the country should stand up and take notice of the Midwestern drought that has already hurt supplies of corn and soybeans.

The drought will lead to higher supermarket prices for everything from milk to meat. How high will depend on what happens with rain and high temperatures in the Corn Belt in the next few weeks.

“We’re at the cusp of seeing how severely this is going to impact consumer prices,” said Darrel Good, professor emeritus of agricultural and consumer economics at the University of Illinois at Urbana-Champaign.

The drought and heat, he said, have "already done permanent damage to the crops, but our concern is the outlook for the weather is not very good and we’re expecting a further deterioration.”

If that happens, he continued, “Prices will go up ever higher and have more severe and long-lasting impacts.”

In a twist that may sound counterintuitive, prices in the next few weeks for certain products may end up being major deals as a result of the drought.

For example, you may want to make room in your freezer for meat because prices for beef and pork are expected to drop in the next few months as farmers slaughter herds to deal with the high cost of grains that are used as livestock feed, said Shawn Hackett of the agricultural commodities firm Hackett Financial Advisors in Boynton Beach, Fla. But, he added, everything from milk to salad dressing is going to cost more in the near term, and eventually the meat deals will evaporate as demand outstrips supply. 

Agriculture experts and economists largely agree that the weather conditions are expected to hurt corn crops, and in turn will impact retail prices in the weeks ahead. But we won’t know the full impact of the drought until early August or September, said Richard Volpe, research economist for the Economic Research Service of the U.S. Department of Agriculture.

“We don’t yet know what’s going to happen and we don’t yet know how severe the drought will be and the amount we end up getting at the end of the corn harvest,” he stressed.

The USDA provides monthly estimates of food prices but the June data showing increases of less than 5 percent for key items such as dairy and meat products does not take the recent grain issues into account. Updated figures on the drought’s impact will be released July 25.

Volpe wouldn’t provide specific projections based on conditions now, but he did say price increases for milk, that were expected to be flat or decline this year, could head up “if there’s a major jump in feed prices.”

At this point, he added, “there’s been enough damage that we know we’re not going to have a record crop in field corn. Now the question is, how far below the record crop is this going to fall? What happens in next two weeks will drive what happens to corn and that will have an affect on all food prices.”

Field corn, also known as feed corn -- which is different from the sweet corn many of us eat during our barbecues -- is in about 74 percent of the foods consumers buy in supermarkets, he pointed out.

This year, corn supplies were expected to be more than ample because many growers in the Corn Belt -- including Illinois, Indiana, Iowa, Nebraska and Minnesota -- increased acreage of the crop to meet growing global demand, said John Riley, assistant extension professor at Mississippi State University. “But it will now fall short because of the drought and heat,” he noted.

The price for a bushel of corn hit $7.48 a bushel at the Chicago Board of Trade this week, and government figures now project this year and next that a bushel will be as much as $6.40 a bushel, up significantly from last month's projections of $4.20 to $5 a bushel.

The expected rise in food prices is nothing new for consumers. “Food price inflation in 2011 was well above normal,” explained Corinne Alexander, an agricultural economist at Purdue University. Grocery store food inflation was 4.8 percent last year, she said, and the expectations were of about 2 percent this year.

“The drought means above normal food price inflation in 2012, and going into 2013,” he noted.

While prices for processed foods such as cereal are not expected to rise considerably unless the shortages get much worse because producers had already instituted huge price hike last year, she continued.

But, she added, the cost of things like oil and salad dressing are likely to rise because soybean crops have also been impacted.

The food-price roller coaster is a scary ride consumers have been on for some time. There have been tight supplies going back to 2006, said Mississippi State’s Riley. “Weather events and a bump up in demand for corn for renewable fuel,” he explained, have all contributed to the problem.

When asked if consumers should start praying for rain, he said, “any rain moving forward is a blessing and is going to help, but I don’t know if it’s going to make it better.”

Americans may complain about the cost of living, but life is actually getting a bit cheaper here compared with the rest of the world, a new study finds.

None of the world's 40 most expensive cities are in the United States, with the top spots dominated by cities in Japan, Australia and western Europe, according to a semi-annual report by the Economist Intelligence Unit.

Los Angeles, which somehow ranks as the most expensive U.S. city, is No. 41 on the global list, down from No. 24 six months ago. Chicago fell to No. 44 from 33, and New York is now less expensive than 48 other cities around the world, including Tel Aviv, Israel, and Dublin, Ireland, according to the report.

As anyone can confirm, the cost of living is not actually getting cheaper in the United States, but the global index is calculated in dollar terms, so the weakness of the dollar makes other cities relatively more expensive.

The Economist survey, mainly intended to calculate cost-of-living allowances for traveling business executives and expatriates, looks at the cost of living in 140 cities around the world, assessing prices of more than 160 items including food, clothing, transportation, utilities and "domestic help." The index factors in the cost of executive-level rental housing as well as sales taxes, but not income taxes or home sale prices.

(That might explain why Los Angeles is ranked as more expensive than New York.)

According to the Economist's calculations:

• A pack of Marlboros that costs $8.99 in New York goes for $15.11 in Oslo, Europe's costliest city.
• A loaf of bread that costs $2.36 in London is $6.48 in Paris (where it probably tastes better).
• A liter of "local" beer costs $6.89 in Tokyo and $1.94 in Berlin (where it probably tastes better).
• A two-course meal for two people should cost about $100 in Tokyo and $250 in New York. (So now you know how much to charge on your next expense report.)

Duncan Innes-Ker, a Beijing-based senior editor and economist for the Economist Intelligence Unit, said the index is most valuable in comparing the overall cost of living for executives considering relocation. By that basic measure London is 23 percent more expensive than New York and Tokyo is 61 percent more. (New York is the base city for the index.) Living in Karachi, Pakistan, costs less than half as much as New York for the same level of goods and services.

Here are the world's 10 costliest cities, according to the index:

1. Tokyo
2. Oslo
3. Osaka-Kobe, Japan
4. Paris
5. Zurich
6. Sydney, Australia
7. Melbourne, Australia
8. Frankfurt, Germany
9. Geneva, Switzerland
10. Singapore

And here are the 10 cheapest of 133 ranked cities:

133. Karachi, Pakistan (cheapest)
132. Tunis, Tunisia
131. Mumbai, India
130. Tehran, Iran
129. New Delhi, India
128. Jeddah, Saudi Arabia
126. Algiers, Algeria
126. Panama City, Panama (tie)
124. Manila, Philippines
124. Dhaka, Bangladesh (tie)