After a year of recession, an unexpectedly resilient economy is bolstering the White House as it continues to sell its record to newly minted Americans. started rocking their “vibecession”.
At the same time, senior administration officials say they are increasingly confident that the situation on the ground can speak for itself. Economy up a strong 3.1% The pace between the fourth quarter of 2022 and the same period last year, per the inflation measure is coolingthe the labor market remains strong and the stock market reached record highs.
“Extraordinary,” is how National Economic Council Director Lael Brainard described the economy to reporters at the White House on Friday.
“We’ve looked historically — we’ve never had a year where inflation has come down so quickly while the economy has been above trend and unemployment has been stable at low levels,” he said.
Jared Bernstein, chairman of the White House Council of Economic Advisers, said in an interview Friday that the economy is a “growth machine that keeps on giving,” supported by a tight labor market, strong consumer spending and rising real wages.
We have never had a year in which inflation has fallen so rapidly while the economy has been rising above trend.
Lael Brainard, director of the National Economic Council
In a speech at the Economic Club of Chicago on Thursday, Treasury Secretary Janet Yellen touted the recovery, boasting that the U.S. is “producing more goods and services now than before the pandemic.” .
The dual challenge now for President Joe Biden — and leaders in both his administration and his re-election campaign — is to keep these trends humming to the attention of more Americans.
They already have some evidence. University of Michigan Consumer Sentiment Index rose in December and JanuaryIt represents the best two-month advance since 1991. While views on the economy differed along partisan lines, Democrats and Republicans posted their most favorable readings in more than two years.
Some business owners who spent the last year battening down the hatches for the recession were surprised it never came.
Josh Burg, owner of Glass Enterprises, a glass manufacturing company in Bensalem, Pennsylvania, said the continued strong economy caught him off guard. Preparing to slow down last year, it instead hired more employees, started new businesses and increased both its top and bottom lines. He gives the current economy an A- and said he would hire more people if he could find one.
“2023 was a good year. “I think most companies would say the same if they were busy,” he said.
But Burg did not completely abandon skepticism. He is still worried about high interest rates and cheap imports.
“When I’m evaluating the candidates, who’s going to protect the business, and for me — totally biased — who’s going to protect the production.”
Former President Donald Trump, the front-runner for the GOP nomination, has argued that Biden’s economic policies have failed. He he said earlier this month “When there’s a crash, I hope it’s within the next 12 months because I don’t want to be Herbert Hoover,” he told right-wing media outlets.
A spokesman for the Biden campaign called the latest economic data evidence of the “Biden agenda at work,” predicting that a second Trump administration would restore gains for middle-class households. “We are investing early and aggressively to ensure voters understand the choice this November,” he said.
For its part, the White House plans to avoid ambiguity like Burg’s by emphasizing pocketbook wins. reduce insulin costs for many diabetics and cutting out-of-pocket Medicare drug prices – and by pushing back overdraft and other “garbage” feeswith more cost-cutting efforts in the coming months.
It’s a policy on a smaller scale than the historic investments in climate, infrastructure and manufacturing — some of which are bipartisan — that Democrats passed before Republicans narrowly regained the House in the midterm elections. But it’s all part of the administration’s plan to show its economic program is succeeding.
While senior White House officials say they are more confident in preparing the case, they are still wary of making noise.
“The president and I understand that many Americans have felt a deeper pessimism about the way the economy is going long before the pandemic,” Yellen said Thursday, adding that “life is harder than it should be for the middle class in this country.”
Around Thanksgiving, The term “Bidenomics” has completely disappeared Biden’s public statements followed an earlier push to adopt him. At the time, some Democratic strategists and allies of the president argued that the label did not resonate. Americans’ unusually sour economic outlookand Republicans used it to blame Biden for high inflation.
The White House insists that “Bidenomics” as a word has not been retired. Biden and Yellen used the term at least once in public speeches this week. But administration officials emphasize that they are more focused on moving trend lines upward and say public sentiment will follow — reducing the need for a branding exercise.
Life for the middle class in this country is still harder than it should be.
Treasury Secretary Janet Yellen
“We’re not done,” Bernstein said, admitting there’s still work to do to prevent “banana peels everywhere.” geopolitical risks a a potential government shutdown. Still, he said, “if we’re on the right track, we should see it show up in the sentiment indexes — and lo and behold, we’re starting to see it.”
Bernstein added that he instructed his team months ago to “think about the price level” of overall purchases, rather than broad-based inflation statistics. “It’s the idea that people keep prices in their heads. They remember what the egg costs.”
That’s certainly true for Robert Bowden, who has been with Glass Enterprises in Bensalem for five years. With three children, ages 17, 16 and 8, she’s aware that even though inflation has slowed, many things still “go up in cost.”
“I’m fine with the salary … but life is getting more and more expensive,” he said.
With Trump still enjoying strong support among working-class voters, Biden officials know the nearly nine-month sprint to Election Day is far from over.
Brainard said Friday that middle-income households now have “more than $3,500 more to spend this year after adjusting for inflation.” When Biden took office. A day earlier in Chicago, Yellen noted that job vacancies had “increased,” leaving unemployment in rural areas 20% higher than in cities.
“It takes a while for the investment to pay off,” he said, adding: “We’re investing in a lot of things that have been neglected for decades.”