Elections in the United States: in the midst of Trump’s overwhelming advance, Biden receives good news

Good news for Americans, but especially for re-election campaign Joe Biden what a fight this year to beat Donald Trump: US economy grew 3.1% in 2023 –more than expected– and avoided recession fears by painting an optimistic picture of consumers and businesses in a crucial election year.

Biden’s hope, which everything indicates He will repeat the duel with the Republican tycoon on November 5is that these numbers break the strange paradox occurring in the country: the post-pandemic United States economy going wellmuch better than in the rest of the global powers, except the Americans They still don’t perceive it that way and they blame the president for poor performance in that key area.

According to the Bureau of Economic Analysis this Thursday, US GDP grew in the final three months of the year faster than many experts had predictedat an annual rate of 3.3%, to close the year at 3.1 in total.

This is a sign that the government, together with the Federal Reserve’s rate policy, succeeded in reducing inflation and ensuring a “soft landing” without major repercussions either for the economy or for workers, given that unemployment still remains at low levels, at 3.7%.

Inflation it fell rapidly from a peak of 9.1% per year in June 2022 at 3.4% annualized last month and there are signs it continues to fall: prices increased at an annual rate of 1.7% in the final three months of 2023, even under the lens Fed long-term policy of 2%.

“It’s hard to imagine how things could get better in the event of a soft landing,” Brian Rose, a senior economist at UBS, told the New York Times. “Looking back at the past year, the combination of growth and inflation that we had was not within the realm of what is possible for most people.n growth this strong, unemployment this low and inflation falling so rapidly“Even the optimists weren’t so optimistic,” he added.

Consumer spending, key

It was crucial to the recovery of the economy consumer spending. The job market has remained solid and these data, together with rising wages, have allowed many citizens to continue spending their dollars especially on services such as entertainment, travel and meals, even in a time of high inflation.

Consumption accounted for most of the economy’s growth in the fourth quarter. According to the official report, increased government spending, at the state, local and federal levels, as well as increased exports and private and residential investment, also supported year-end growth.

The information comes to Biden at a key moment. The growth data represents a political boost for the president, as every year of his administration the country has seen GDP growth, despite some difficult quarters. Last year’s 3.3% expansion exceeds GDP growth in every year of President Donald Trump’s tenure, including 2019, when the economy grew 2.95%.

United States of America grows more than Europe and Great Britain, which are on the verge of recession, while China, the world’s second largest economy, is still slowly recovering at 5.2% with an uncertain outlook. Overall, economic growth in advanced economies is expected to slow to 1.4% this year, according to the International Monetary Fund.

Biden’s policies helped the economic recovery last year, especially by funding clean energy and infrastructure projects created new jobs and stimulated private investments for 640,000 million dollars.

Biden’s problems

However, the president has difficulty convincing voters that the economy is improving because Americans still appear to be doing so They don’t have the feeling of progress in their pocket. In fact, according to an average of RealClearPolitics polls, 58% of citizens disapprove of Biden’s economic management, compared to 37% who support it. As regards the management of inflation, 64.6% are against it, while only 32.3% approve it.

Rising prices, especially of essential goods like food, housing and utilities, cloud Americans’ views of the economy, and inflation routinely tops voters’ list of top concerns.

The key to this paradox was the Federal Reserve raising interest rates. The Fed increased them aggressively since last year in an effort to slow the economy enough to reduce inflation.

While their efforts are working (prices are up 3.4% from a year ago, down from a high of 9.1% in June 2022), many Americans believe the prices are high (they are actually higher than before the pandemic) even if salaries have remained constant.

But, despite the Fed in the latest revisions interest rate increases stopped, has not yet downloaded them. In a country where you buy everything in installments (houses, cars, furniture, etc.), citizens They are trapped in loans that are difficult to pay. The Fed has given signs that it will start lowering the rate this year and this would help improve citizens’ prospects, experts say.

However, there are signs that Americans are starting to feel better about the economy as inflation eases. The level of consumer confidence resumed in the months of November and December. However, it is unclear whether this will translate into votes for Biden.

The president searches Enjoy the moment and as soon as the numbers came out, the White House released a statement signed by the president-candidate: “Today we learned that the American economy grew 3.1% last year, and also added another 2.7 % of millions of jobs, and core inflation fell. return towards pre-pandemic reference values. As a result, wages, wealth and employment are now higher than before the pandemic. This is good news for American families and workers. During my tenure there are three consecutive years of growth of the economy from the center out and from the bottom up. But our work is not finished.”

And, in an electoral message addressed to his rival Donald Trump, he added: “I will not allow it extremist republicans distribute massive donations to the rich and large corporations, increasing costs and cutting health and social spending.”