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A Look Back at Biden’s Economic Legacy
The world has been on tenterhooks as America prepares for its next presidential election. When Joe Biden promised a "recovery for everybody" as he took over an economy ravished by the pandemic, few could have predicted the events that would unfold. Now, standing on the cusp of change, Kamala Harris or Donald Trump will step up to take the helm.
Inflation: A Rollercoaster Ride
The global economy was still reeling from the shockwaves of Covid-19 when Biden assumed office in January 2021. Such disturbances provided fertile ground for a dramatic ascent in inflation. By June 2022, the consumer price index had reached a lofty peak of 9.1%. Initially, both the White House and Federal Reserve considered the inflationary moves as fleeting. However, rising prices prompted the Fed to take decisive action. Interest rates, which were nearly zero, were increased over eleven meetings to their highest point in two decades.
Although this curbed the runaway inflation, it introduced new concerns. The ghost of recession loomed large over the American economy as the Fed sought to moderate activity and stabilize prices. Fortunately, a significant downturn was averted.
Explore more about the robust growth of the US economy here.
Employment in the Spotlight
Remarkably, the feared recession failed to manifest. Instead, the US labour market demonstrated resilience. With millions of new jobs, non-farm payrolls remained steady. Unemployment slumped to its lowest in fifty years. In 2022, approximately 399,000 jobs were added on average each month, decreasing slightly to 225,000 in 2023.
Job growth may have plateaued recently due to unforeseen challenges such as strikes and storms. Though, September’s data surprised many with its robustness. There’s a glimmer of hope for a "soft landing" where the economy stabilizes without plunging into recession.
The Challenge of Food Prices
Even with a buoyant economy, not every American has felt the prosperity. Inflation may have eased, but most household costs remained steep. In particular, food prices saw a noteworthy increase of 22% since Biden assumed office. Polls, like the one conducted by Harris, reveal that many Americans mistakenly believed the nation was in recession.
While falling inflation doesn’t equate to falling prices, many Americans still grapple with the elevated cost of living compared to four years ago.
Stock Markets: A Bullish Era
For Biden’s predecessor, the stock market was the epitome of economic success. Despite pre-pandemic assurances from Trump that the market was "very much under control," it reached further heights under Biden. The S&P 500 surged by over 51% during his term, with all major indices touching new peaks. The resilience shown by the markets appears to be a testament to Biden’s influence, regardless of the challenges faced by the wider economy.
As America awaits its next leader, these insights into the economic landscape provide a nuanced narrative. Although some challenges remain, the overarching stories of resilience and growth are undeniable.
To delve deeper into recent economic trends, you can catch a glimpse of US job market performance in October or expectations regarding imminent rate cuts. Each link offers a closer look at the intricacies shaping this crucial facet of Biden’s legacy.
