WASHINGTON — When it comes to reassuring the American public about an economy that has become a challenge to his party in an election year, President Joe Biden is asking the country to hold on.
It is a message of patience at a time when voters are besieged by persistent inflation, fears of a recession and the prospect of rising energy prices in the final weeks of the election campaign, in the ones that will determine the fate of vulnerable Democrats and control of Congress.
The $25+ trillion economy is veering in two completely different directions.
Growth has fallen for two consecutive quarters, raising the possibility of a recession. But gains in the job market have persisted, including another 263,000 vacancies filled in September, a sign of the health of the economy. Still, the latest jobs report sent Wall Street tumbling on Friday on renewed fears that the Federal Reserve will have to continue aggressive interest rate hikes to curb rising consumer prices.
Biden argued that the latest numbers are strong and have slowed in recent months in a way that hints at a decline in inflation. Major oil-producing countries, led by Saudi Arabia and Russia, “disappointed” it with their decision last week to cut production, but the US government forecasts that domestic output should increase by an average of about 840,000 barrels a day next year. next year.
During a speech at a Volvo transmission factory in Hagerstown, Maryland, the president tried to restate his argument that many more manufacturing jobs are on the horizon.
“This is the progress we need to see,” the president declared. “In the short term, the transition to more stable growth that continues to provide for workers and families while reducing inflation. In the long term, an economy built on stronger foundations. We still have a lot of work ahead of us. We are building a different economy than before, better, stronger.”
Yet polls consistently show Biden with low approval ratings for his handling of the economy, and the American public widely perceives that the country is headed in the wrong direction.
An Associated Press-NORC Center for Public Affairs Research poll conducted in September revealed that just 38% of those surveyed approve of Biden’s leadership on economic matters. 29% of American adults said that the economy is in good shape, while 71% said that its performance is poor. It was a better result than in June, when 20% of those interviewed viewed the state of the economy with good eyes and 79% did not.
Although Biden does not appear on the ballot for the November 8 election, Democratic candidates face relentless criticism from Republicans, who want to turn the election into a referendum on the president’s performance. With GOP ads mentioning inflation and high gas prices, there is mounting pressure on the White House to address public concerns about the state of the economy ahead of the election.
Jason Furman, who headed the White House Council of Economic Advisers under President Barack Obama, said the jobs numbers are a political win for Biden, but also a warning of future economic adversity at a time when the Fed faces pressure to raise interest rates to tame inflation.
“The price level remains elevated and headline inflation probably increased each month between July and October due to gasoline price dynamics,” Furman said. Stopping that, he added, “unfortunately will take a long time, and possibly mean inflicting a lot of pain, for them to succeed.”
The hardest part of Biden’s challenge to getting the public to accept his message is when it comes to gas prices.
For 99 days in a row, the White House highlighted the drop in prices after they peaked in June. But they started rising again last month, and have risen even higher since Wednesday, when OPEC and its allies announced severe output cuts.
The domestic price in the United States is $1.03 per liter ($3.91 per gallon), according to the American Automobile Association (AAA). Last month the average was 98 cents per liter ($3.74 per gallon) and a year ago it was 86 cents per liter ($3.27 per gallon).
Gasoline prices reached their highest point in June, at $1.36 per liter ($5.02 per gallon).
In late March, Biden ordered the country’s strategic reserve to release a million barrels of crude a day for six months to help reduce prices. The White House now assures that its government is weighing new releases to compensate for OPEC cuts. He has also tried to goad oil companies into increasing production and cutting their profit margins.
“The president is in a state of denial that the United States is experiencing a dangerous wage-price spiral that will drive inflation for years, that we are in stagflation, and that we are already in, or are on the verge of, a severe recession, all of which he created by bungling the recovery,” said Rep. Kevin Brady, the ranking Republican on the House Ways and Means Committee.