President Joe Biden sought to calm Americans’ concerns about the strength of the economy on Thursday, after new data showed it had contracted for two quarters in a row.
Biden and top White House officials touted several positive facts about the U.S. economy, including that employers are still hiring, unemployment is at a 50-year low and manufacturers are still investing.
“That doesn’t sound like a recession to me,” Biden told reporters.
Fears about the economy could fuel Biden’s fellow Democrats during the Nov. 8 midterm elections for control of Congress.
The president’s approval rating has fallen to a record low of 36%, according to Reuters/Ipsos polling, with the economy listed at the top of voters’ concerns as higher grocery, gas and housing bills mount.
While the second straight quarterly decline in GDP meets a standard short definition of a recession, the White House, the Federal Reserve and many economists believe the broader conditions are not close to being met, given strong consumer spending and labor markets.
Biden aides attribute the lower growth to the Federal Reserve raising interest rates four times this year to curb decade-high inflation, and what they hope is a short-term trend of businesses slowing down in re-creating their inventories, having previously overcompensated for shortages during the COVID-19 pandemic.
“It is no surprise that the economy is slowing as the Federal Reserve acts to bring down inflation,” Biden said in an earlier statement. “We are on the right path and we will come through this transition stronger and safer.”
New data from the Commerce Department estimated that gross domestic product fell at a 0.9% annual rate in the latest quarter, after economists had seen the figure tick by 0.5%.
The Fed said on Wednesday that economic activity has weakened as it continues to raise rates in a bid to tame inflation that has hit 40-year highs, but Chairman Jerome Powell said there were too many points of strength for the U.S. to be in a recession. .
The Republican Party has used high inflation and economic weakness to attack Biden’s economic and spending priorities. The party has been sharp in its criticism of attempts by the White House to push back on recession talk.
On Thursday, Biden appeared poised to score two victories on economic policy in Congress.
Key centrist Democratic Senator Joe Manchin announced an agreement Wednesday with top Democrats on broad tax and spending legislation related to health care and climate change.
On Thursday, the House of Representatives passed sweeping subsidies for the domestic semiconductor industry to compete with Chinese and other foreign manufacturers. Both were long-sought priorities of Biden.
Biden received word on the latest passage of the chips bill while he organized a roundtable with business executives intended to capture the strong status of the American economy.
An aide gave Biden a note with the vote, which the president announced to applause.
However, even during a meeting with participants selected by the White House, Biden heard a mixed picture of the American economy.
Bank of America Corp CEO Brian Moynihan said US consumers are in a very strong position, with strong incomes, few delinquencies and a robust appetite to consume, but he said gas prices continued to bite.
“We are seeing a slowdown in the consumer,” Wendell Weeks, the CEO of Corning Inc, told Biden, referring to the sale of his manufacturing company to television and computer makers.
Administration officials have also worked to discourage people from declaring a recession too soon to avoid a self-fulfilling prophecy as businesses and consumers, worried that tougher times lie ahead, cut back on spending and investment plans.
Job growth averaged 456 700 per month in the first half of the year, while domestic demand has continued to grow.
Labor Department data on Thursday showed initial claims for state unemployment benefits eased slightly.
However, the number has been higher over the past month, suggesting that the labor market may also be slowing.
‘Doesn’t sound like a recession’: Biden optimistic despite economic contraction – SABC News
Source link ‘Doesn’t sound like a recession’: Biden optimistic despite economic contraction – SABC News