US growth shatters expectations, boosting Biden's economic pitch - POLITICO
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US growth shatters expectations, boosting Biden's economic pitch
The Commerce Department reported Thursday that GDP expanded 3.1 percent in 2023, a year that began with heavy odds of a recession and closed out with fourth-quarter growth that blew away projections.
This story of the middle class is not separate from the state of the economy. It's at the heart of it," Treasury Secretary Janet Yellen will say in remarks in Chicago Thursday afternoon. | Kevin Dietsch/Getty Images
The U.S. economy is growing faster than expected as inflation falls, and the Biden administration is seizing the moment in a bidto counter one of the fiercest lines of attack by former President Donald Trump.
The Commerce Department reported Thursday that GDP expanded 3.1 percent in 2023, a year that began with heavy odds of a recession and closed out with fourth-quarter growth that blew away projections. The news comes during a week bookended by sales pitches from two top officials, White House economic adviser Lael Brainard and Treasury Secretary Janet Yellen. At the heart of their message: President Joe Biden's strategy to help the middle class is working.
"This story of the middle class is not separate from the state of the economy. It's at the heart of it," Yellen said in remarks in Chicago Thursday afternoon. "By middle class, I don't mean a narrow or fixed group. I mean workers across industries and occupations— from firefighters to nurses to factory workers."
Biden's surrogates have a long road ahead in convincing the country, however, as Trump consistently trounces the sitting president in polling about the economy and has focused much of his campaign pitch on how historically strong he says growth was during his own administration. There are also risks that inflation could see a resurgence, either because growth has remained so robust or because of an unexpected shock like a further escalation of the conflict in the Middle East, which could push up global oil prices.
But Biden world is seeing signs of hope. Last week, a closely watched measure of consumer sentiment on the economy released by the University of Michigan surged to its highest level since 2021 as inflation has cooled to roughly 3 percent and stock prices have jumped.
"The sustainability of this trend is one of the biggest questions about the macro context for this year's elections, and we think it has implications not just for partisan control but for the policy proposals that investors can expect to see from the Trump and Biden campaigns this year," Tobin Marcus, a former economic adviser to Bidenwho now heads U.S. policy and politics at Wolfe Research, wrote in a research note.
In a roundtable with reporters Wednesday, Yellen drew a sharp contrast between Biden and Trump, who also oversaw an economy with unemployment that fell below 4 percent.
"Cutting taxes for the rich and hoping that the benefits trickle down, broadly, is not the right strategy," she said.
The positive GDP numbers, which measure growth in the fourth quarter of 2023 from the same three-month period the previous year, were driven by strong consumer spending, suggesting that households are not hunkering down — with average growth over all four quarters of the year coming in at 2.5 percent. Biden will also speak Thursday afternoon on his administration's infrastructure investments.
Yellen, in her speech, said household median wealth rose by 37 percent between 2019 and 2022, according to the Treasury chief's prepared remarks, which she called "the largest three-year increase on record." She also touted the fact that wages are now growing faster than prices, pointing to a new Treasury analysis showing that a worker earning a median wage would have $1,400 left over after buying the same goods and services that they did in 2019.
Still, even though costs aren't rising nearly as quickly as they were in the aftermath of the Covid epidemic, the price of household staples like food and housing are dramatically higher than they were three years ago. That could continue to weigh on Americans' perceptions of the economy.
There is also a risk that the influx of good economic news could be coming too soon. Though economists generally are more optimistic that the Federal Reserve's punishingly high rates won't drive the U.S. into recession, growth is projected to be slower in 2024. Consumer spending, which represents about two-thirds of the economy, has gradually slowed, and higher debt costs could nudge up unemployment, which has stayed below 4 percent for two years.
Gregory Daco, chief economist at EY-Parthenon, also warned about putting too much stock into monthly consumer sentiment numbers that can move around a lot.
But Thursday's data could buoy the trend.
"The 3.3 percent GDP increase in [the fourth quarter] of 2023 caps off a year of exceptional growth for our economy," Rep. Brendan Boyle (D-Pa.) said in a statement shortly after the data release. "With last year's numbers, average annual GDP growth for the first three years of the Biden administration comes in at 3.4 percent, far outpacing the 2.6 percent during the first three years of the Trump administration."
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Who all wants to hear the MAGA's spin in this?
where's the stock market collapse trump predicted?
where's the world war trump predicted?
where's the crippling economic recession the rwnj's predicted?
does eating survivalist food cause brain damage?
Same place they were when dems predicted the same things when Trump took office...........and we are a hell of a lot closer to a world war than anyone wants to think.
[deleted]
Dude, it sucked when Trump was POTUS
luckily I won't need to travel far at all to defend the constitution and country...
Everybody i know who has lost their father wishes they were back, even for a little while
Sorry your life was so bad, mine was just fine, much like it was under Obama and every president before him. Maybe you should try to find happiness elsewhere besides in who holds political office.
How did it suck for you?
Was it the lower than now gas prices?
Was it the lower than now interest which made everything less expensive?
Was it the ease in purchasing a home with a 3-4 percent interest rate?
What was it that sucked for you?
Mean tweets?
So nothing to address my post.
Just yet another useless meme
I think you meant a fact that can't be disputed, so it must be deflected...
The top five presidents who recorded the largest percentage increase to national debt during their time in office.
Two term Presents would accumulate more debt than one term losers like Trump, though Trump racked up his trillions...
Finally we agree on something.
On Biden’s term it will have grown by another $9T.
Did he autograph a version for you? How much did you have to pay?
You do realize that GDP includes GovCo spending right? And who has been spending like sailors on shore leave?
And pay particular attention to this in the link...............
.
Today the US is leading the world economically!
I know the US has the lowest unemployment, highest growth and the lowest inflation, that wages are growing and corporations are making record profits and our retirement accounts are the best they have ever been now under BIDEN!
Exactly, it all the great economic management, executive orders and policies. American business is like a puppet and only requires a talented puppet master to perform well.
As of last year we were the 2nd country in national debt per capita: $92,104. Only Singapore beat us for the top spot. Maybe in a few more years we can be number 1 in national debt.
There has been plenty of "good news" on the economy, but I think it's clear that - so far - regular people aren't actually feeling it. That's what's going to matter when they go to vote next November.
Too bad the Bidenistas and Traitor Joe don't quite understand that.
I'm not feeling it in the grocery store or when I grab something to eat
Especially that
I haven't bought potato chips in years, but I noticed Wal-Mart promoting a bag that cost $2.19 not so long ago that is currently on sale for $4.97. WTH?
When I quit working outside the home, I started cooking everything from scratch for health reasons and taste reasons.
The only fast food I buy is an occasional ice cream cone at Braums.
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