Inflation has become the dominant issue in this year's elections and is now the single most important key as to whether President Carter can come back from his poor showing in the polls.

The number of Americans who now say that prices are rising faster than a year ago has gone up to 74 percent; 46 percent held this view last summer. Over the past 12 months, Carter's rating on his handling of the economy has dropped from 54 to 39 percent negative to 80 to 16 percent negative. On his handling of inflation, he receives 84 to 12 percent negative marks.

People are so worried about the unchecked spiraling of the prices of products that, by 54 to 24 percent, they expect the country to be in a recession next year, the first time since 1975 that a majority has felt that another recession was on the way.

By contrast, public pessimism about unemployment has abated somewhat; for the first time in more than a year, more people think joblessness is decreasing in their area than it is increasing. The results of a recent Harris poll of 1,238 adults nationwide show that by 58 to 30 percent, Americans find rising prices a more serious problem than unemployment. As recently as March 1975, 44 percent gave top priority to unemployment.

Perhaps the single most important key to the public mood about inflation is the community of interest it has created across the county, based on the conclusion that people can't beat inflation as individuals.

When given a choice between "a pay increase lower than the rise in the cost of living but with some assurance that the cost of living were being brought under control" and "a pay increase higher than the cost of living but with no assurance that the cost of living were being brought under control," the public now opts - 68 to 24 percent - for a lower hike in pay. This is an increase from the 54 to 32 percent recorded in February. In explaining this preference, most people feel they gain nothing by receiving a pay increase if they then immediately find that its effects have been negated at the supermarket by commensurate price increase.

The most popular approach to controlling inflation in the country today in the minds of the public and the political leadership can be found in putting teeth into guidelines that would give tax advantages to companies and employes who agree to price and pay increases of no more than 6 percent, but who would suffer extra tax levies on pay and price hikes of more than 6 percent.