President Biden's top advisers are launching a new aggressive push this week to tout the strength of the economy as the presidential campaign heats up, hoping to turn what has long been seen as one of the president's biggest policy vulnerabilities into an advantage to convert.
The messaging effort reflects Biden's economists' renewed confidence in the resilience of the U.S. economy and the president's leadership after more than two years of relentless teasing of the administration over high inflation and widespread predictions of an impending recession. On Thursday, the Bureau of Economic Analysis reported that the country's economy grew 2.5 percent over the last year, including a robust annual rate of 3.3 percent in the last quarter.
Capitalizing on the good data, Treasury Secretary Janet L. Yellen will give a groundbreaking speech in Chicago on Thursday in which she will both defend the administration's economic record and begin outlining her plans for a second-term agenda. With these remarks, Yellen will rebuke forecasters who “thought last year that a recession was inevitable.” The government was eager to predict low gas prices, a rise in consumer sentiment, rising prosperity compared to pre-pandemic levels, a narrowing of the gap between rural and urban unemployment, caps on some drug prices and some other signs of economic improvement.
“Although some forecasters thought a recession was inevitable last year, President Biden and I did not. Instead of contracting, the economy has continued to grow, powered by American workers and President Biden's economic strategy,” Yellen is expected to say, according to excerpts of her remarks released by the Treasury Department.
Biden also released a statement following Thursday's report on rising gross domestic product that said, “Wages, wealth and employment are now higher than before the pandemic. That's good news for American families and American workers.”
The administration's stance comes amid a broader rethinking of the U.S. economy's policies, once seen as former President Donald Trump's most effective weapon in the 2024 presidential campaign. Although Republicans remain optimistic that the economy is still a strong winning proposition – especially given the administration's initial attempts to downplay price increases in 2021 and 2022 – Republicans' economic argument has certainly become more difficult as inflation has fallen from around 9 percent to almost 3 percent.
Some analysts stress that risks to the economy remain and there is still a chance that inflation will rise again.
“There is no doubt that the data at the end of the morning was fantastic. “The economy has embarrassed people who have called for recessions, and it has embarrassed people who have called for an end to inflation too soon,” said Stephen Miran, who served as an economic analyst at the Treasury Department in the Trump administration. “But it is still too early to celebrate – inflation risks are real and recession risks are still real. It is hard to imagine the economy having tight labor and housing markets and not being able to identify real inflation risks.”
Nevertheless, the White House is also becoming increasingly confident in its messages about the economy. On Thursday, the White House Council of Economic Advisers released a report showing that the “blue chip” index of leading economic forecasters had completely misjudged the direction of the economy, predicting much higher inflation and unemployment than turned out to be the case.
“The data tell a compelling story of an economy that has significantly outperformed expectations and where continued tight labor markets and easing price pressures are supporting macroeconomic growth,” the report said.
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