Superior (Wisconsin): US President Joe Biden and Treasury Secretary on Thursday (January 25) touted the country’s strong economic performance in 2023, emphasizing that stronger-than-expected growth will help Democratic incumbents ramp up their re-election efforts.
“Ever since I was elected, the experts have been saying that a recession is on the horizon,” Biden said in a speech in Wisconsin. “Well, we’re experiencing very strong growth.”
He was referring to data released earlier Thursday showing the U.S. economy grew at an annualized rate of 3.3% in the October-December period, supported by a resilient job market and consumer spending.
Gross domestic product (GDP) in the fourth quarter increased by 3.1% compared to the same period last year.
Meanwhile, the full-year economic growth rate accelerated from 1.9% in 2022 to 2.5%.
Biden contrasted the numbers with recent comments by former President Donald Trump, who said he wants the world’s largest economy to collapse.
“We clearly have work to do, but we’re making real progress by building our economy from the middle out and the bottom up, not the top down,” Biden said.
The Dow Jones Industrial Average and S&P 500 closed at new record highs following the GDP report.
“Wages, wealth and employment are higher now than they were before the pandemic,” Biden said in a statement Thursday.
As Mr. Biden’s re-election bid gathers pace, his team is trying to show that he has done more for the country than Mr. Trump.
In Chicago, Treasury Secretary Janet Yellen highlighted economic gains under the Biden administration, including investments made through the bipartisan infrastructure and anti-inflation legislation.
“None of these policies are designed to recreate a previous era. This country and the world have changed and we can’t go back,” Yellen told the Chicago Economic Club. He clearly criticized President Trump’s policies.
He argued that the Biden administration is building the foundations of America’s future around the middle class through infrastructure development and a modern tax system.
The latest GDP figures add to optimism that the U.S. is on the verge of achieving a “soft landing” in which rising interest rates quell inflation without triggering a recession.
The Commerce Department said the sharp increase in growth in the fourth quarter “reflected increases in consumer spending, exports, and state and local spending.”
Analysts had expected consumption to lose momentum in early 2023 as the coronavirus pandemic wiped out household savings and kept borrowing costs high.
However, the country avoided recession last year.
“Economic growth has been more resilient than we expected,” Kathy Bojancic, chief economist at Nationwide, told AFP.
A strong labor market drove employment and wage growth, he said. Increases in personal income supported consumption.
“Economic growth is still expected in 2024, but at a slower pace,” said Bernard Jarosz of Oxford Economics.
“As long as the labor market stabilizes and unemployment rates rise gradually, consumers will continue to be the driving force behind this economic expansion,” he added.
Jarosz said the Federal Reserve is expected to lower interest rates, home builders plan to take advantage of lower mortgage rates and a frozen existing home market, and housing investment could also become a bigger driver of growth. said that it was high.
Ian Shepherdson of Pantheon Macroeconomics said the outlook for first-quarter gross domestic product (GDP) data is now expected to “decelerate moderately” from the fourth quarter.
Analysts expect the Fed could cut rates as early as May or June, depending on inflation.
Robert Frick, business economist at Navy Federal Credit Union, said the current data “clears the path for the Fed to deliver at least the three expected rate cuts this year.” –AFP
