President Biden, whose re-election prospects could hinge on whether inflation moderates without the economy tipping into a recession, quickly took credit for the latest data showing a June slowdown in price increases.
“Good jobs and lower costs: That’s Bidenomics in action,” Mr. Biden said in a statement on Wednesday.
The White House has branded its economic agenda as “Bidenomics” in recent weeks and the president has been making the case that his policies have kept the economy on a steady path and maintained a healthy labor market.
While controlling inflation is the job of the Federal Reserve, it is Mr. Biden whose political fate rests on whether the central bank can cool the economy enough to achieve what’s known as a “soft landing” by wrestling price increases under control without causing a recession.
“Today’s report brings new and encouraging evidence that inflation is falling while our economy remains strong,” Mr. Biden said in the statement. “Our progress creating jobs while lowering costs for families is no accident, and I will continue to fight for lower costs for families every day.”
In a speech at the Economic Club of New York on Wednesday, Lael Brainard, the director of the National Economic Council, said that the United States economy was outperforming other advanced nations. She said that inflation in the U.S. was now the lowest among the Group of 7 countries while its recovery from the pandemic has been the strongest.
“The economy is defying predictions that inflation would not fall absent significant job destruction,” Ms. Brainard said, according to her prepared remarks.
While the latest data showed that Mr. Biden may be able to get that gentle slowdown, the economy still faces headwinds. The Fed, which has raised interest rates above 5 percent to try and cool the economy, is expected to lift them again later this month.
Treasury Secretary Janet L. Yellen said in an interview with CBS this week that a recession is “not completely off the table.” Still, she expressed optimism that while the labor market would likely soften, the United States would not experience such a downturn.
“It’s my hope that, and belief, that there is a path to bring inflation down in the context of a healthy labor market and the data that I’ve seen suggests we’re on that path,” Ms. Yellen said.
Republicans argued on Wednesday that inflation remained too high and that real wages were lower than when Mr. Biden took office.
“It will take American families a long time to recover from ‘Bidenomics,’” said Tommy Pigott, rapid response director for the Republican National Committee. “The main way to make sure they do is to make Biden a one-term president.”
Source: New York Times