What’s happened to the economy under Biden?

Share on facebook
Share on linkedin
Share on twitter

Print

Image Source: The Hills Times

President Joe Biden and his Republican opponents have said he has done a lousy job running the US economy while in office.

Republicans have talked about Joe Biden’s recession because inflation is rising, and the stock market has been going down for most of this year.

Mr. Biden has said that the economy is “as strong as hell” and that there has been good job growth and low unemployment.

The US economy shrank by 1.6% in the first quarter of this year and by 0.6% in the second quarter (up to June).

But the most recent quarterly numbers show that growth is happening. Gross domestic product (GDP), a standard measure of a country’s economic activity, grew at an estimated annual rate of 2.6% from July to September.

During Trump’s presidency, the Covid pandemic significantly affected the economy. In 2020, economic growth dropped sharply because of the lockdowns, but it grew significantly after the restrictions were lifted.

From a longer-term point of view, the economy grew more during Mr. Biden’s first year in office (from January 2021) than it did under Trump and Obama.

Regarding economic growth, OECD predictions for 2023 show that the US will be behind China, Japan, and France, among other major economies.

Biden credits steady growth to his administration

Mr. Biden has repeatedly said that steady job growth is a significant accomplishment. In September, he said that nearly 10 million new jobs had been done since taking office.

Data for non-farm jobs in the US, which make up about 80% of the labor force, shows strong growth. Since Biden took office in January 2021, non-farm jobs have grown by about 10 million, more than created during any other presidency since 1939.

But since the country stopped working because of the pandemic, the economy has picked up quickly, which has helped Mr. Biden.

Mr. Biden has also talked about the low rate of unemployment.

In September of this year, unemployment was down to 3.5%, about the same level as in January 2020, right before the pandemic, when President Trump was in office.

Mr. Biden has also talked about how wages are going up in the US.

When price increases are considered, however, real wages have been decreasing.

The average hourly wage has decreased by 3% over the past year (to September 2022).

High gasoline prices

People have said that Mr. Biden is to blame for gas prices rising. When he walked into his office, the average price of a gallon of gas in the US was about $2.39. As of October 31, it was about $3.76.

He has said that inflation is “worldwide” and worse in other countries than in the US.

The US is not the only country dealing with the effects of the pandemic and the war in Ukraine. Many countries are also dealing with rising inflation and slow growth.

But the US has had higher inflation than some other developed economies.

According to the OECD, the US consumer price index (CPI) for the year until September was 8.2%. This is lower than the UK or some other European countries but higher than Japan, France, and Canada.

Interest rates in the US hit a new 14-year high

As it tries to stop prices from increasing quickly, the US central bank has agreed to another sharp rise in interest rates.

The Federal Reserve said it raised its key interest rate by 0.75 percentage points, making it the highest since early 2008.

The bank hopes that putting up the cost of borrowing will slow down the economy and stop prices from increasing too quickly.

Read Also: US interest rates hit 14-year-high amid the economic downturn 

But critics worry that the moves could lead to a bad economic downturn.

The benchmark lending rate is now between 3.75% and 4%, which is the highest range since January 2008.