President Biden on Thursday said the economy is “looking good” following the release of the Commerce Department’s better-than-expected report showing a rebound in economic growth after two straight quarters of contraction.
U.S. gross domestic product grew by an annual rate of 2.6% from July through September despite persistently high inflation and rising interest rates.
The figures gave Mr. Biden pep in his step as he departed the White House en route to upstate New York to tout private investments in domestic semiconductor manufacturing, spurred by the $280 billion Chips and Science Act, which the president signed into law last summer.
Emerging from the Oval Office, Mr. Biden at one point jogged toward awaiting journalists to laud the latest economic figures.
“Great economic report, GDP report,” Mr. Biden said. “Things are looking good.”
Thursday’s report, just weeks before voters head to the polls for next month’s midterm election, offers a glimmer of hope for the president who has been walloped in polls amid persistently high inflation and consistently gloomy economic forecasts.
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The third quarter’s economic growth was buoyed by government and consumer spending, strong exports, and a healthy job market.
Many economists refer to two consecutive quarters of economic contraction as a recession, though the White House has dismissed the commonly used definition.
Consumer spending expanded at a 1.4% annual pace over the third quarter, down from 2% the previous quarter. Government spending grew by 2.4% annually. Exports grew at an annual rate of 14.4%.
Despite the promising figures, the economy remains on a knife’s edge as Americans battle nearly 40-year high inflation.
Mr. Biden initially dismissed concerns over rising costs, predicting last year that inflation would be temporary.
“We also know that as our economy has come roaring back, we’ve seen some price increases,” Mr. Biden said in July 2021. “Some folks have raised worries that this could be a sign of persistent inflation. But that’s not our view. Our experts believe and the data shows that most of the price increases we’ve seen are — were expected and expected to be temporary.”
At the time, inflation was at 5.4%.
The Federal Reserve has raised interest rates five times this year in the hopes of gaining control of inflation. Fed Chairman Jerome Powell has warned that interest rate hikes could result in higher unemployment and a recession.
Earlier this month, Mr. Biden dismissed the Labor Department’s dismal inflation figures saying Americans have been battling rising costs “for years.”
The Consumer Price Index increased 0.4% in September after rising by 0.1% in August, exceeding expectations and showing that inflation remains a stubborn problem in the final monthly report before the midterm elections.
The annual inflation rate of 8.2% was down slightly from 8.3% in the previous month, though it remains a historic burden on consumers. Inflation reached a 41-year high of 9.1% in June.
Mr. Biden on Wednesday said he appreciates Americans’ frustrations with skyrocketing prices while he struggles to get inflation under control, and he warned that it will take time before families get back to breaking even.
Mr. Biden has pointed to the $740 billion tax-and-spending law he signed over the summer as the way out of choppy economic waters. Democrats say the law will eventually restrain inflationary pressures.
Critics pan the measure as more government spending that will add to inflation rather than reduce it. They also point to other forms of spending under the administration, such as Mr. Biden’s plan to write off billions in student loan debt, as compounding the problem.
“I’m optimistic,” Mr. Biden said Wednesday. “It’s going to take some time. I appreciate the frustration of the American people.”
• Joseph Clark can be reached at jclark@washingtontimes.com.
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