After making tackling inflation its “top priority,” the Biden administration says aspects of the economy are resilient, even if headlines don’t reflect it.
Senior administration officials boosted Biden’s economic record on a call with local reporters on Wednesday about positive economic indicators — mainly low unemployment and falling gas prices — ahead of a quarterly GDP report due on Thursday that could show the country entering a recession.
The White House has appeared frustrated in recent weeks that the fall in gas prices hasn’t received the same media coverage as the sharp rise earlier this year.
Almost half the states have unemployment rates below 3%, the economy has added 375,000 new jobs per month over the past three months, supply chain problems are resolving and the statewide average gas price is 70 cents below its peak six weeks ago. This was announced by administration officials on Wednesday.
But that news hasn’t caught on like the rise in record-high gas prices — which the government blamed on disrupting global markets from Russian President Vladimir Putin’s invasion of Ukraine — earlier this summer, the White House has complained.
“While last month’s rise in gas prices due to Putin’s hike was accompanied by widespread media coverage, the fall in gas prices has not received the same reception,” Kate Bedingfield, White House communications director, said in a memo this month.
Gasoline price goes up
A variety of factors led to the rise in gas prices, experts say.
Prices have risen steadily during Biden’s presidency, from a national average of $2.42 a gallon in January 2021, when Biden was inaugurated, to $3.41 a gallon a year later, a month before Russia launched its attack, the government said US Energy Information Administration.
An administration official said Wednesday Biden’s decision to release 125 million barrels of oil from the Strategic Petroleum Reserve — a complex of underground storage caverns along the Texas and Louisiana coasts — was partly responsible for the fall in gas prices.
According to the AAA, the average price of gasoline on Wednesday was $4.30 a gallon. The automaker posted its highest-ever average on June 14 at $5.02. The White House expects prices to fall further to about $4 a gallon, an official said.
The increase in gas prices has led to an overall increase in consumer prices, which rose by 9.1% in June compared to 2021 levels.
pandemic recovery
The economy is in a period of recovery from the pandemic, officials said, and the government is scrambling to go from “running in this sprint to recover from the pandemic, getting out of this deep hole” to “strong, stable, shared growth” that we want to see month by month, quarter by quarter, year by year.”
Officials contrasted Biden’s vision of economic growth with what they believe was the pre-pandemic norm of uneven and generally low wage growth. They said they are also working to lower prices across the economy.
The stay-at-home phase of the pandemic crippled much of the economy and disrupted the normal dynamics of supply and demand. The supply chain has been slow to recover, causing product shortages, but has “unraveled to some extent,” an official said Wednesday.
“We really need to focus on what will benefit American families, sustain this strong recovery — and at a steady pace that we can manage over time — and bring prices down,” a senior official said. “And we’re transitioning to that kind of economy.”
Biden is focused on bills now in Congress that could further reduce costs for consumers, officials said.
Biden issued a statement Wednesday night in support of a reconciliation bill, also endorsed by West Virginia Senator Joe Manchin III and Senate Democrat leadership, that would allow Medicare to negotiate with drug companies over the price of some prescriptions, reduce health insurance costs and reduce inflation, among other things.
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