The Economy is on an Upswing. Should Biden Get Credit for It?
Aug 7, 2023
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White House correspondent Jim Tankersley discusses the positive economic data in the US under President Biden's tenure, exploring his policies, their impact on the economy, and the challenges of Bidenomics. The chapter also mentions the Department of Labor's report on job growth, approval of the first postpartum depression pill, and the retirement of Megan Rapinoe.
The US economy has shown signs of avoiding a recession, with strong growth and job creation exceeding expectations, attributed to government stimuli and targeted investments.
The improvement in people's standard of living, with rising wages outpacing prices, indicates a positive outlook for the economy, despite challenges like inflation and uncertain future growth.
Deep dives
Positive economic data suggests avoidance of recession
Recent economic data indicates that the US may have successfully avoided a recession, with strong growth and job creation exceeding expectations. The economy expanded at a 2.4% annual rate in the second quarter, and despite expectations of job growth slowing down, hundreds of thousands of jobs continue to be added. Furthermore, inflation is decreasing, with a current rate of 3%, down from 7% a year ago. This positive economic performance is attributed to a combination of government stimuli, including the American Rescue Plan and targeted investment in infrastructure and clean energy. While caution remains regarding future economic fluctuations, the current data suggests a potential soft landing for the US economy.
Improved standard of living and rising wages offer positive signs
One of the most encouraging aspects of the current economic landscape is the improvement in people's standard of living, which had been stagnant during the early years of the Biden presidency. Hourly wages have risen faster than prices for the first time in two years, providing individuals with more disposable income. This increase in income, along with the overall economic growth and job creation, contributes to a positive outlook for the economy. While the persistence of inflation and the uncertainty of future growth rate remain as potential challenges, the recent improvement in standard of living is a positive sign of progress.
Biden's economic strategies and their impact on the economy
President Biden's economic strategies and policies have played a significant role in the current economic performance. The American Rescue Plan, a $1.9 trillion stimulus package, provided financial support to individuals, businesses, and local governments, stimulating consumer spending, hiring, and a rapid return to low unemployment. Additionally, investment in infrastructure, semiconductor chips, and clean energy through various bills signed by Biden contributed to job creation and economic growth. However, it is important to note that these efforts also contributed to inflation. To counter inflation, the Federal Reserve raised interest rates, reducing economic activity and tightening credit. Other factors, such as oil price fluctuations and supply chain improvements, also influenced inflation rates. While it is challenging to establish a direct line between a president's policies and economic performance, Biden's strategy of prioritizing economic growth and taking decisive action appears to be yielding positive outcomes.
The latest economic figures are some of the best of President Biden’s tenure so far. It appears increasingly likely that the United States has managed to tame high inflation without causing a recession.
Jim Tankersley, who covers economic policy for The Times, discusses the encouraging outlook and speculates about why the positive data hasn’t translated into a bump in President Biden’s popularity.
Guest: Jim Tankersley, a White House correspondent for The New York Times.
Background reading:
For President Biden, many of the numbers that define an administration — on the economy, crime, immigration — are finally heading in the right direction. Except one: his approval rating.
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