Categories: Economic News

Biden has good reason to tout the new data on economic growth

When there’s good economic news to share, the White House tends to waste no time, and this morning was no exception. “For months, the bullies have been arguing that the US economy is in recession and Republicans in Congress have been rooting for a recession,” President Biden said in a written statement. “But today we have more evidence that our economic recovery continues to advance.”

The Democrat’s positive attitude was understandable. Despite significant headwinds, the economy started growing again over the summer, and as NBC News reported, the new GDP data looked even better than expected.

The US economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing inflation fears, the Bureau of Economic Analysis reported on Thursday. GDP, the sum of all goods and services produced from July to September, rose at an annualized rate of 2.6% during the period, versus the Dow Jones estimate of 2.3%.

In the first and second quarters of the year, the economy contracted somewhat, prompting exaggerated political talk about whether the country had slipped into a “recession.” That hasn’t happened, at least not yet, and the data released this morning should close that conversation.

Indeed, while inflation clearly casts a long shadow over the economy, there is plenty of evidence pointing to an ongoing recovery. As Biden boasted, precisely, “Our economy has created 10 million jobs, unemployment is at a 50-year low, and American manufacturing is booming. Today’s data shows that in the third quarter, Americans’ incomes rose and price increases in the economy fell.”

Before looking at Republican reactions to the news, let’s note for context that three months ago, when the Bureau of Economic Analysis reported that gross domestic product fell 0.6% in the second quarter, it took the leader of House Minority Kevin McCarthy. only 22 minutes to announce that the United States was “in recession.” The California Republican took the same message on the waves about an hour later.

As we discussed, at the same time, Senate Minority Leader Mitch McConnell did the same, using the data he found politically convenient to denounce democratic governance.

The reasoning followed a trajectory meant to reflect common sense: there is a Democratic president and Democratic majorities in Congress; there is discouraging economic news; therefore, the public should blame the party in power.

But three months later, in the midst of election season, economic growth looks good and job growth is even better. GOP leaders had literally nothing to say a few weeks ago when the unemployment rate hit a 50-year low, and those looking to them to respond to today’s good news ran out.

As of this minute, more than four hours after the GDP numbers were released, the collective number of statements this morning on economic growth from McCarthy, McConnell and the Republican National Committee is zero.

Imagine this.

postscript: It’s worth clarifying that the current quarterly figure of 2.6% refers to growth at an annualized rate, which is the standard way of reporting the data. That is, if we saw 12 months of economic activity like what we saw in the fourth quarter, the economy would grow by approximately 2.6%.

You can also see some attention today in a different number: 0.6%, which reflects the change between the second quarter and the third quarter.


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