President Joe Biden addressed the nation in his State of the Union speech on Feb. 7, and he said himself, “Two years ago our economy was reeling. As I stand here tonight, we have created a record 12 million new jobs — more jobs created in two years than any president has ever created in four years.”
On Wednesday, Biden went to Wisconsin in order to advocate for his plans concerning employment and the economy. This visit followed his State of the Union address, in which he touted his economic policies as the cause for the 12 million new jobs created in the last two years. However, economists point out that job growth was a natural result of the pandemic lockdowns ending and the massive stimulus spending. While Biden's policies may have helped, it is unlikely that he is solely responsible for the 12 million jobs added to the economy.
Inflation has been an issue for the economy, with the rate peaking in mid-2022. However, it has since been slowing month after month, and consumers may see their living costs drop before the end of the year. A recent ABC News/Washington Post poll found that 41% of Americans said that their finances were worse now than when Biden came into office, the highest number in nearly three decades.
The Federal Reserve is continuing its aggressive campaign to bring down prices by hiking interest rates. Economists had estimated that the Labor Department’s jobs report for January would come in at around 185,000 new positions. Powell has also suggested that unemployment could rise a percentage point or more as the central bank continues to increase borrowing costs.
At the Brookings Institution, Powell set out the “economic conditions” that he and the U.S. central bank “need to see to bring inflation down to 2%.” Powell emphasized the labor market, noting that its significance for core services inflation (excluding housing) is particularly noteworthy. At the time, it had shown “only tentative signs of rebalancing, and wage growth remains well above levels that would be consistent with 2% inflation over time.”
It is clear that President Biden and the Federal Reserve have a delicate balance to strike between inflation, job creation, wages, and the overall health of the economy. While Biden’s policies may have helped create jobs, it is likely that the natural economic cycle and massive stimulus spending played a larger role.
0. “Stimulus Update: Biden Doubles Down on Economic Progress in State of the Union Speech” The Motley Fool, 9 Feb. 2023, https://www.fool.com/the-ascent/personal-finance/articles/stimulus-update-biden-doubles-down-on-economic-progress-in-state-of-the-union-speech/
1. “President Joe Biden speaks in DeForest about economic policy” PBS Wisconsin, 9 Feb. 2023, https://pbswisconsin.org/news-item/president-joe-biden-speaks-in-deforest-about-economic-policy/
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