Tag: biden economy
Joe Biden

Wake Up And Look At What's Really Happening In The Biden Economy

You may have noticed in recent weeks that alarming headlines about inflation – specifically, those ubiquitous stories about the cost of gasoline, or eggs, or other household goods – have vanished. Media outlets no longer feature those fearsome charts with arrows zooming skyward, or video loops displaying the latest eye-popping gas station signage.

Much as the mainstream media seemed to enjoy scourging President Joe Biden with the bad news about raging hikes in the price of everything, that depressing theme has disappeared because inflation is falling.

In October, what economists describe as “core inflation,” meaning the price of goods and services other than food and energy, declined to 2.0 percent – the target set by the Federal Reserve. And what they understandably call “headline inflation,” the more volatile measure of prices that include all consumer purchases, including groceries and gas, dropped on a monthly level to zero.

Got that? Zero. Year over year, the rise in personal consumption expenditures has plummeted to three percent.

So encouraging were those numbers to the financial sector – and presumably the central bankers at the Federal Reserve – that some now forecast a cut in interest rates. Dropping rates would likely prevent the recession that has been forecast (with glee) by many Republicans – and bring America in for a “soft landing” from the pandemic recovery.

Will Biden get any credit for this improvement? Not from most media organizations, nor from pundits who wrongly blamed him for the inflation spurt in the first place, when they knew that other countries were suffering much worse price increases in the pandemic’s wake. Indeed, too many outlets are barely even noting that inflation has collapsed.

At the same time, the president’s “Bidenomics” program has brought continued steady growth and strong employment, with the annualized gross domestic product topping 5.2 percent in October – and unemployment steady at 3.9 percent. Economists have long tended to view a four percent jobless rate as “full employment,” essentially the best that can be achieved in a capitalist system without spurring inflation. Our current unemployment level is among the lowest in the G-20 industrialized countries.

The reason is so simple that even a wingnut can understand: Under this president, the United States has seen an unsurpassed record of job creation, with 14 million new positions since he took office, far more than the last three Republican presidents combined. The social impact of high employment is profound, which is why traditional Democrats like Biden consistently promote infrastructure, education, environmental, and income support policies that boost jobs. As California Democratic Gov. Gavin Newsom explained during this week’s Fox News debate with Republican Gov. Ron DeSantis (whom he crushed), the nation is now seeing the lowest rate of poverty in our history, as employment among Blacks, Hispanics, and women have reached new peaks.

Are you starting to see a fuller picture here? Let’s add a few more features: Personal income rose over five percent in the first quarter of this year and contined to go up into the second and third quarters. Consumer spending rose 3.6 percent, while housing investment increased to 6.2 percent, almost half again what had been predicted.

You may well retort that polling consistently shows – and the media persistently emphasize – that most Americans say they are unhappy with the economy and blame the president, resulting in poor approval ratings and endangering Biden’s reelection prospects. And that’s undeniably true, as far as it goes. But more than one expert now wonders why, if so many of our neighbors feel pessimistic and even angry, they keep buying stuff as if everything is working out just fine.

Economist Dean Baker suspects the influence of slanted news coverage and can imagine a very different political scenario. “If we had the exact same economy, and Donald Trump was in the White House,” Baker says,”Trump would be endlessly saying ‘greatest economy ever.’ Every Republican politician in the country would be amplifying the claim and all the political pundits would be writing that the strong economy will make Trump almost a sure bet for re-election.”

Sooner or later, the majority of Americans will wake up and realize that Joe Biden has not only protected us from recession but has created the conditions for a generation of prosperity. Let’s hope they figure that out before it is too late – and vote to defend the future from Trump’s madness.

Why Are Americans Feeling So Bad About A Good Economy?

Why Are Americans Feeling So Bad About A Good Economy?

The U.S. economy is doing its best impression of a Formula One car, racing at high speed while negotiating a series of twists and turns. Last year, real gross domestic product grew faster than any year since 1984, when President Ronald Reagan was running for reelection on the theme, "It's morning in America."

One indicator after another suggests an economy enjoying robust health. Last week, economists were pleasantly surprised when the Bureau of Labor Statistics reported that in January, the economy added 467,000 jobs — despite omicron, which spread across the country with alarming rapidity.

Unemployment remained low at four percent, compared with 6.4% a year before. A record number of people quit their jobs in November, reflecting their confidence that in today's labor market, they can find better ones.

The stock market is up more than 12 percent over the past 12 months. Corporate profits reached a 70-year high in 2021. Federal tax revenues soared by 18 percent in the 2021 fiscal year, as more people made more money.

But ... there's always a "but." As the columnist George Will postulated years ago, all news is economic news, and economic news is always bad. The dominant news in recent months has been inflation, once thought to be permanently vanquished but now making a comeback.

Prices climbed by seven percent last year, the biggest increase since 1982. A recent CNN poll found that 80 percent of Americans regard rising prices as a major problem, and 63 percent think the national economy is in poor shape.

That notion is at odds with reality. In April 2020, when the economy was suffering a pandemic-induced collapse, CNN found, 60% of Americans thought the economy was in bad shape. That the number is higher now than it was then is a testament to the power of negative thinking.

Where does the negative thinking come from? Maybe from the psychological phenomenon known as loss aversion. As Investopedia explains, some research suggests that "the pain of losing is psychologically about twice as powerful as the joy we experience when winning."

Since the pandemic crushed the economy, we have regained nearly 24 million jobs, and growth has rebounded strongly. But those gains get discounted because of what we have lost: stable prices. The joy of a boom doesn't compare to the misery of inflation.

Politics plays a role. Most of the people who voted for Donald Trump in 2020 are not inclined to cheer the state of the economy, because they don't want to think that Joe Biden has done well at managing it. They feel vindicated by every unfavorable development. They bring to mind country artist Patty Loveless, who sang, "You can feel bad if it makes you feel better."

Biden hardly deserves all or even most of the credit for our improving fortunes. The economy is an unpredictable beast over which Washington has only limited control. But he did push through a $1.9 trillion COVID-19 relief package last spring, despite warnings that it could overheat the economy and spark inflation.

Those warnings turned out to be valid. But if you're going to blame Biden's spending for the rise in inflation, you have to give credit to Biden's spending for the surge in economic growth. The outlays served to boost overall demand, which produced both results. Without the relief package, we'd have lower prices but slower growth and higher unemployment.

Much of the gloom about the economy stems from the disruptions caused by the pandemic. Some are economic: snarled supply chains, shortages of some goods, canceled airline flights and other events resulting from workers being infected. But the fear of COVID-19, the obligation to wear a mask and get any number of vaccine shots, and endless uncertainty may do more damage to the national psyche.

We all yearn for a normal life that we fear will never return. And whether we are in the pro-mask, pro-vaccine group or the opposing camp, we are confronted with reminders every time we go out that the other side is an obstacle to what we want. Bitter feelings fester.

In our yearning, we forget that in what we recall as the happy times, we were grumpy. In December 2019, before the first case of COVID-19 in the U.S., Gallup found that 62 percent of Americans were "dissatisfied with the way things are going in the United States at this time."

When you're smiling, the song says, the whole world smiles with you. These days, though, you'll get more company with a scowl.

Follow Steve Chapman on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

Wall Street Ends Tumultuous Year Near Record Highs

Wall Street Ends Tumultuous Year Near Record Highs

By Stephen Culp and Echo Wang

NEW YORK (Reuters) - Wall Street closed near record highs in light trading on Friday, the last trading day of 2021, marking the second year of recovery from a global pandemic.

All three major U.S. stock indexes scored monthly, quarterly and annual gains, notching their biggest three-year advance since 1999.

The S&P 500 gained 27 percent since the last trading day of 2020. Through Thursday, the benchmark index has registered 70 record-high closes, or the second-most ever. Using Refinitiv data back to 1928, the most record-high closes for the S&P 500 in a single year was 77 in 1995.

The Dow added 18.73 percent for the year, and the Nasdaq gained 21.4 percent.

Companies, consumers and the broader economy largely thrived in 2021 as they felt their way forward amid a constantly shifting landscape including a tumultuous transfer of power marked by the Jan. 6 Capitol riot. Other factors included the "meme stock" phenomenon, new COVID-19 variants, a labor shortage, generous fiscal/monetary stimulus, hobbled supply chains, booming demand and the resulting price spikes.

"What stands out to us this year among all the negatives, is the resiliency of Corporate America," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "In a sea of uncertainty and higher prices, you have to be extremely impressed by how agile and adaptive Corporate America was to sport 45% earnings growth in a very difficult year."

Indeed, earnings results from S&P 500 companies blew past analyst estimates to deliver year-on-year growth in the first three quarters of the year of 52.8 percent, 96.3 percent, and 42.6 percent, respectively, according to Refinitiv, which currently sees fourth-quarter annual earnings growth of 22.3 percent.

Energy <.SPNY>, real estate <.SPLRCR> and microchips <.SOX>, sectors associated with economic recovery and booming demand, were among 2021's top performers, with growth stocks' <.IGX> 31% advance handily outperforming the 22% gain in value <.IVX> stocks.

Market-leading tech and tech-adjacent megacap stocks, which outperformed the broader market in the first year of the global health crisis, were laggards as the economy slowly reopened and vaccines were deployed.

The NYSE FANG+ index <.NYFANG>, an equal-weighted group of 10 such stocks, notched a nearly 20 percent advance on the year. Google parent Alphabet Inc <GOOGL.O> posted the biggest annual advance among NYSE FANG+ constituents, enjoying its best year since 2009. [nL4N2TG1PT]

Dow Transports <.DJT>, considered by many a barometer of economic health, registered a yearly gain of more than 31 percent.

Steadily rising Treasury yields - along with a recent hawkish shift from the Federal Reserve, which now foresees as many as three rate hikes in the coming year - have supported interest rate-sensitive financials <.SPSY> which gained nearly 33 percent.

The COVID-19 pandemic, which burst onto the scene in early 2020 and prompted the steepest, quickest economic contraction in history, continues to linger, pressuring travel-related stocks.

The S&P 1500 Airlines index <.SPCOMAIR> ended 2021 as one of the year's few losing sectors with an annual decline of nearly 2%.

But early data suggests the Omicron variant, which has caused an abrupt spike in global infections, is less virulent than its predecessors and economic data is increasingly suggesting a return to normal, two years after the first cases of COVID-19 were reported.

The Dow Jones Industrial Average <.DJI> fell 59.78 points, or 0.16 percent, to 36,338.3, the S&P 500 <.SPX> lost 12.55 points, or 0.26 percent, to 4,766.18 and the Nasdaq Composite <.IXIC> dropped 96.59 points, or 0.61 percent, to 15,644.97.

Volume on U.S. exchanges was 7.6 billion shares, compared with the 10.55 billion average for the full session over the last 20 trading days.

Of the 11 major sectors in the S&P 500, consumer staples sector <.SPLRCS> was up the most in Friday's session, with communications services <.SPLRCL> suffering the biggest percentage drop.

Advancing issues outnumbered declining ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored decliners.

The S&P 500 posted 47 new 52-week highs and no new lows; the Nasdaq Composite recorded 58 new highs and 143 new lows.

((Reporting by Stephen Culp in New York and Echo Wang in Taos, New Mexico; Additional reporting by Medha Singh in Bangalore; Editing by Matthew Lewis and Lisa Shumaker))

Wall Street Slips On New Year's Eve As Market Clocks Robust 2021 Gains

Wall Street Slips On New Year's Eve As Market Clocks Robust 2021 Gains

(Reuters) - Wall Street's main indexes were subdued at open on Friday, looking to clock a third straight annual gain in a year fueled by massive stimulus, COVID-19 vaccine rollouts, and a strong retail participation.

The Dow Jones Industrial Average fell 12.23 points, or 0.03 percent, at the open to 36,385.85.

The S&P 500 opened lower by 3.52 points, or 0.07 percent, at 4,775.21, while the Nasdaq Composite dropped 18.66 points, or 0.12 percent, to 15,722.91 at the opening bell.

(Reporting by Medha Singh in Bengaluru; editing by Uttaresh.V)

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