The Economy

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Biden makes peace with "Bidenomics"

President Biden has finally stopped worrying and learned to love "Bidenomics," less than two weeks after joking to an audience of union workers: "I don't know what the hell that is."

Why it matters: Biden's embrace of a term he's expressed some ambivalence about will fully align him with a White House communications shop that wants to run on the president's economic record and legislative accomplishments in 2024, Axios' Hans Nichols writes.

• Biden's top advisers have made a strategic decision to own the economy, calculating that Republicans will try to blame them for a slowdown regardless if it’s real or imaginary.
• With the debt ceiling raised and the Fed’s rate-hiking plans out of Biden’s control, the battle over the economy in the next 16 months will be about perceptions.

What they're saying: "Bidenomics is working,” the president declared in a speech today in Chicago, where he's expected to accept the Democratic nomination in a little over a year. "The trickle-down approach failed the middle class.”

Driving the news: Biden began a day that was supposed to be dedicated to owning his economic achievements by quibbling with reporters on the origins of the term "Bidenomics."

• "You guys branded it. I didn't,” he said over the whine of Marine One’s engines. "I never called it Bidenomics.”
• "Let's get it straight: The first time it was used was in the Wall Street Journal. OK? I don’t go around beating my chest, 'Bidenomics,'" Biden said, repeating his case for the word’s etymology.

The intrigue: The Wall Street Journal’s Greg Ip used the term in a neutral way on April 7, 2021, writing that "while the successor to neoliberalism lacks a label, Bidenomics will do for now."

• But the White House thinks the term came into the public domain via C-SPAN, courtesy of an insult from then-House Minority Leader Kevin McCarthy (R-Calif.) in May 2021.
• Republicans are determined not to let the term be redefined, with McCarthy tweeting a ripoff of a White House graphic today that reads: "Bidenomics is about blind faith in government spending and regulations."

The big picture: There are two undeniable — and contradictory — realities about the U.S. economy in 2023: The numbers are impressive, but Americans aren’t feeling it.

• The so-called "misery index" — a mix of unemployment rate and inflation — has dropped significantly over the last year.
• And yet only 1 in 4 Americans report that the country’s economic conditions are in good shape, according to a May poll from AP-NORC.

What we’re watching: Those two dynamics will make the battle for the economy in 2024 largely a communication fight, in which both sides won't be shy about cherry-picking data.

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Is it a ‘richcession’? Or a ‘rolling recession’? Or maybe no recession at all?

WASHINGTON (AP) — The warnings have been sounded for more than a year: A recession is going to hit the United States. If not this quarter, then by next quarter. Or the quarter after that. Or maybe next year.

https://apnews.com/article/recession-economy-inflation-jobs-unemployment-2ad91e65f4c0c79ebd2518e351934605?

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Still hiring: Big Tech layoffs give other sectors an opening

For the thousands of workers who’d never experienced upheaval in the tech sector, the recent mass layoffs at companies like Google, Microsoft, Amazon and Meta came as a shock.

https://apnews.com/article/big-tech-workers-layoffs-government-jobs-b0185388732b0aa4a92d26f4f24eba5d?

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Feeling bad in a good economy

Data: BLS via FRED; Chart: Axios Visuals A new paper helps solve a polling puzzle that has big implications for the 2024 election: Why has consumer sentiment stayed dismal even as the economy roared and unemployment hit record lows? It comes down to your personal paycheck, Emily Peck writes for Axios Markets. It's the economic version of: All politics is local. If your wages are outpacing inflation, things look rosy — if not, well, that's quite dispiriting, writes economist Darren Grant of Sam Houston University in Huntsville, Texas. 🔭 Zoom out: In a "Bidenomics" speech in Chicago yesterday, President Biden talked up his economic record — historic job growth, the low unemployment rate (especially for women and Black people) and his infrastructure package. Biden touted record wage growth for low-wage workers, too. 🔎 Between the lines: The thing is, the overall picture for wage growth is a less positive story. Until recently, real wage growth — that is, factoring in the impact of inflation — was negative for Americans on average. Now, finally, as inflation eases, real wage growth is turning positive — you can see the recent reversal in the chart above. And consumer sentiment is picking up, too, as Axios' Neil Irwin reports. The backstory: Back in 2014, Grant published a paper looking at decades of consumer sentiment polling and economic data, and found Americans' views of the economy were deeply connected to the unemployment rate: When the jobless rate was low, people's moods brightened. When he updated the research last year he found that was no longer true. But he couldn't quite understand why. Grant wasn't alone: Economists and journalists attributed the shift to partisanship, or media coverage or COVID or inflation. Still wondering, Grant spent the past year looking at wage growth data from the Atlanta Fed to see how it correlated with his data on sentiment. Turns out there was a strong connection — particularly among workers in their 30s and 40s, who are most strongly attached to the workforce.

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Biden puts all his chips on the table with a push on ‘Bidenomics’

The push to own the economy, by literally branding it with the president’s name, is not without risk.

https://www.politico.com/news/2023/06/27/biden-puts-all-his-chips-on-the-table-with-a-push-on-bidenomics-00103861?

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💰 Biden market gains trail Trump, Obama

Data: Yahoo! Finance. Chart: Jared Whalen and Thomas Oide/Axios All three major U.S. stock indices have increased during President Biden's time in office. But the gains are smaller than those of his last two predecessors, Axios' Dan Primack and Thomas Oide report. Why it matters: Biden this week signaled plans to run for re-election on his economic record, embracing the term "Bidenomics." 🧮 By the numbers: The S&P 500 has climbed 15.7% since Biden's inauguration. That trails Trump's 40% and Obama's 53.8%, at the same point in their presidencies. The Dow Jones Industrial Average grew 10.3% for Biden, 34.8% for Trump and 48.06% for Obama. The tech-heavy Nasdaq is where Trump came out on top, at a whopping 161.7%. Obama hit 70.2%. Biden oversaw a tech sector correction that put his Nasdaq performance at just 3%. 🥊 Reality check: Stock market performance isn't necessarily a gauge of economic health. More meaningful metrics include GDP, employment and real wages. That said, the market partially reflects how investors view the economy. And most American adults have money in the market, directly or indirectly. Share this story.

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🔮 First look: Yellen's sunny forecast

Treasury Secretary Janet Yellen will say today that the country’s top business leaders are telling her they're confident that the U.S. economy is resilient and can outrun a recession, Axios' Hans Nichols has learned.

• Why it matters: The West Wing is convinced the economy is healthier than some Wall Street analysts have suggested. But Biden officials know they need to convince the public.

Context: This week, the West Wing deployed multiple powers of the presidency — including a "Bidenomics" speech in Chicago — to double down on the economy before next year's election.

Driving the news: Yellen will use a speech today at PosiGen, a solar energy company in New Orleans, to say: "I continue to believe that there is a path to reducing inflation while maintaining a healthy labor market."

• "This sentiment is echoed by business executives I’ve met with, who have increasingly voiced confidence in our economy," she adds in prepared remarks.

The big picture: As Biden officials crisscross the country to talk up the economy, they're bolstered by solid data from Washington.

• Gross domestic product grew at a 2% annualized rate in the first quarter, a notable upward revision from the most recent estimate of 1.3%, Axios Macro reported yesterday.
• Earlier this week, a new survey showed that consumer confidence is surging, and reached its highest level since early '22.
• New orders for durable goods jumped 1.7% last month. May's employment report showed an addition of 339,000 jobs.

🥊 Reality check: Core inflation, which excludes volatile energy costs, is still north of 5%. While the Fed paused its rate-hiking, there are strong hints Fed Chair Jay Powell isn't finished.

• Share this story.

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Key Fed inflation measure shows prices rose just 0.3% in May

Inflation pressures eased slightly in May as consumer spending slowed considerably, according to a Commerce Department report released Friday.

https://www.cnbc.com/2023/06/30/pce-inflation-may-2023-.html

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📈 Consumers, markets get more optimistic

Data: University of Michigan. Chart: Axios Visuals There are signs June was a turning point in Americans' largely gloomy views of the economic situation. New consumer sentiment data out yesterday from the University of Michigan shows Americans are getting more optimistic, and helps fill in the details about why, Axios' Neil Irwin writes. A key driver is receding inflation worries. Consumer expectations for inflation over the next year dropped remarkably abruptly to 3.3% in June, from 4.2% in May and 5.3% this time a year ago. 🥊 Reality check: The improvement was sharpest among Democrats. Republicans are still quite pessimistic. Data: FactSet. Chart: Thomas Oide/Axios Stocks are up 16% at the midway point of 2023, which some argue is the early stage of a new bull market. The rally is powered by relief that inflation has eased without a recession — plus a dash of AI hype for a bit of speculative spice, Axios Markets' Matt Phillips writes.

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First-quarter economic growth was actually 2%, up from 1.3% first reported in major GDP revision

The U.S. economy showed much stronger-than-expected growth in the first quarter than previously thought, according to a big upward revision Thursday from the Commerce Department.

https://www.cnbc.com/2023/06/29/first-quarter-economic-growth-was-actually-2percent-up-from-1point3percent-first-reported-in-major-gdp-revision.html

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Biden maps big spending plans

Data: Interior Department. Map: Axios Visuals The Biden administration is beginning to map out billions of dollars in infrastructure, green technology and chips money it muscled through Congress. Why it matters: President Biden is trying to convince a skeptical public that Bidenomics is working for them, Axios' Hans Nichols reports. What's happening: In the second leg of his "Investing in America" tour, Biden and his Cabinet are buzzing across the country this week. They're carrying an upbeat message about the economy — topped with a jab at Republicans. They're trying to draw a direct link between a booming jobs market and the trillions of dollars in new government spending Biden signed into law. At the same time, they'll highlight Republican votes against many of those stimulus bills. 🗺️ Maps showing the reach of Biden's programs — including one the Interior Department is releasing today — are central to both efforts. It shows how the $7.3 billion in interior grants are spread across the country in more than 1,300 projects. Big winners include the West and swing state Pennsylvania, where Biden was born. Biden heads to West Columbia, S.C., today to tout a new investment from Enphase Energy, a solar technology company, to partner with Flex LTD, a global manufacturer, to create 600 jobs in one of the country's reddest states. He also will mark a milestone the White House is eager to promote: By the administration's count, private companies have announced more than $500 billion in investment in U.S. manufacturing and infrastructure projects that are directly related to Biden's new federal spending. 🔎 Between the lines: The Interior Department is the first agency to release its own interactive map of projects — joining the White House, which has diligently updated its database of public and private investments in manufacturing. Other departments — including Commerce and Transportation, which have much bigger shares of the spending pie — are expected to follow suit. 💭 "You aren't done hearing about Bidenomics," White House communications director Ben LaBolt said. "Following his major address in Chicago [last week], the president, vice president, Cabinet members and senior administration officials will continue to make a full-court press on Bidenomics this week." Explore Interior's map ... White House database ... South Carolina fact sheet ... Share this story.

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US job openings dropped below 10 million in May

The number of available jobs in the United States dropped in May after an uptick the month before, the Bureau of Labor Statistics reported Thursday.

https://www.cnn.com/2023/07/06/economy/jolts-job-openings-may/index.html?

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Cooler hiring in June could help the Fed achieve an elusive ‘soft landing’ for US economy

WASHINGTON (AP) — Another month, another solid gain for America’s job market.

https://apnews.com/article/jobs-hiring-unemployment-inflation-economy-federal-reserve-e49ffbccbbd841c838ead1601dd8825b?

U.S. job openings dip to 9.8 million but remain high, showing resilience in labor market

WASHINGTON (AP) — U.S. job openings slipped in May but remained at levels high enough to illustrate that the American labor market remains resilient in the face of sharply higher interest rates.

https://apnews.com/article/job-openings-unemployment-economy-recession-f6811dfae03fcb14249a8937425a2838?

US economic growth last quarter is revised up sharply to a 2% annual rate

WASHINGTON (AP) — Showing surprising resilience in the face of higher interest rates, the U.S. economy grew at a 2% annual pace from January through March as consumers spent at the fastest pace in nearly two years.

https://apnews.com/article/economy-growth-gdp-inflation-consumers-federal-reserve-14560ad6bbb6b5322f9bccffc918ac04?

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🔮 America's job nirvana

Data: Bureau of Labor Statistics. Chart: Axios Visuals Three reports yesterday show the labor market is in a remarkable sweet spot: The excess tightness of 2021 and 2022 is dissipating. But workers still see abundant opportunities, Neil Irwin writes for Axios Macro. 💬 "Rumors of the Great Resignation's demise were greatly exaggerated, at least for now," writes Nick Bunker, research director of the Indeed Hiring Lab. "For now, demand for new hires remains elevated and employers are still holding onto the workers they have," he added. "This should be enough to give job seekers, employers and policymakers some comfort as the summer wears on."

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Payrolls rose by 209,000 in June, less than expected, as jobs growth wobbles

Employment growth eased in June, taking some steam out of what had been a stunningly strong labor market.

https://www.cnbc.com/2023/07/07/jobs-report-june-2023-.html

Here’s where the jobs are for June 2023 — in one chart

The June jobs report showed signs that the U.S. labor market may be losing steam after surprisingly strong growth earlier this year, but some categories still saw big jumps in employment last month.

https://www.cnbc.com/2023/07/07/heres-where-the-jobs-are-for-june-2023-in-one-chart.html

Employment Situation Summary

THE EMPLOYMENT SITUATION -- JUNE 2023

https://www.bls.gov/news.release/empsit.nr0.htm

After brief pause, Federal Reserve looks poised to raise interest rates again

The Federal Reserve appears likely to raise its key interest rate next week, with minutes from the central bank's most recent meeting showing some officials wanted to raise rates last month.

https://www.cbsnews.com/news/federal-reserve-interest-rate-hike-imminent-fomc-minutes-2023-07-05/

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Coming economic shock

Illustration: Annelise Capossela/Axios

A big economic shock is coming in October for the U.S. economy and millions of households: the resumption of student loan payments. Why it matters: That will mean real and often painful cuts to the disposable income of millions of consumers, which could result in a slight slowing of the overall economy, Emily Peck writes for Axios Markets. What's happening: Americans with student-loan debt tend to be younger, with lower incomes. They're already spending a higher share of their income. So an additional monthly payment will hurt. The resumption of student loan payments will pull $70 billion a year out of the economy, Moody's Analytics estimates. If the Supreme Court had upheld President Biden's debt-forgiveness plan, the end of the COVID-era payment pause would have reduced 2023 real personal consumption expenditures by 0.2%, according to Moody's Analytics. After the court killed the plan last month, the reduction could be 0.4%. 🥊 Reality check: The U.S. economy is massive. So the impact of student loan payments on GDP will be real but marginal, says Bernard Yaros, a Moody's Analytics economist. 🖼️ The big picture: The coming student-loan cliff is the latest in a string of withdrawals of pandemic-era supports. Those include the end of both stimulus checks and child care tax credits, plus the pullback on SNAP benefits and Medicaid support. Go deeper: How the student-loan ruling affects consumers

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Used car prices tumble in largest drop since the pandemic

Monthly change in wholesale used vehicle prices

https://www.axios.com/2023/07/10/used-cars-prices-us-economy?

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📈 Small business perks up

Data: NFIB. Chart: Axios Visuals Small-business owners remain pretty pessimistic. But the NFIB Small Business Optimism Index ticked up in June to the highest level this year, Axios' Kate Marino reports. Why it matters: Small businesses often feel an economic slowdown more quickly or sharply than large corporations — they have less scale, less margin for error, less access to capital markets. 🕶️ The share of companies planning capital expenditures in the next 3-6 months went up to 25% in May — and held steady in June. The percentage of owners expecting better business conditions in the next six months improved by 10 points in June — to the best reading since February 2022. Still, more owners are negative than positive. Explore the data.

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Fever breaks

Illustration: Aïda Amer/Axios

Inflation has plunged from its peak, according to Consumer Price Index data out today. Why it matters: The worst of the inflation crisis looks to be firmly behind us, Axios' Courtenay Brown writes. ⚡ What's happening: Consumer prices rose 3% in the 12 months through June, the smallest increase since March 2021. That reflects milder price gains for a slew of goods, including meat, fish and dairy. Other items saw outright deflation. Airline fares fell 8%. Used cars ticked down 0.5%; new cars were flat. The bottom line: "After a punishing stretch of high inflation that eroded consumer's purchasing power, the fever is breaking," Bill Adams, chief economist at Comerica Bank, wrote in a note. With expected cooling in other areas — including housing, which makes up a big chunk of the index — there is reason to be hopeful this progress could be here to stay. Share this story.

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US inflation hits its lowest point since early 2021 as prices ease for gas, groceries and used cars

WASHINGTON (AP) — Squeezed by painfully high prices for two years, Americans have gained some much-needed relief with inflation reaching its lowest point since early 2021 — 3% in June compared with a year earlier — thanks in part to easing prices for gasoline, airline fares, used cars and groceries.

https://apnews.com/article/inflation-prices-interest-rates-economy-federal-reserve-53d93610b5ccaacd097853593f29bc26?

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🕶️ Market rises as inflation eases

Data: FactSet. Chart: Axios Visuals Stocks posted their best day of the month after encouraging inflation data yesterday, Matt Phillips writes for Axios Markets. Why it matters: The slowdown raises the prospect that the interest rate surge — which hammered stocks last year — is nearly over. If so, the rally that started last fall may indeed be a new bull market. Data: Bureau of Labor Statistics. Chart: Axios Visuals The key U.S. gauge of consumer prices showed the lowest level of inflation (3%) since March 2021. Go deeper ...

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Inflation rose just 0.2% in June, less than expected as consumers get a break from price increases

Inflation fell to its lowest annual rate in more than two years during June, the product both of some deceleration in costs and easy comparisons against a time when price increases were running at a more than 40-year high.

https://www.cnbc.com/2023/07/12/inflation-rose-just-0point2percent-in-june-less-than-expected-as-consumers-get-a-break-from-price-increases.html

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State of the economy: Vibes vs. data

Illustration: Annelise Capossela/Axios

If you spend your life looking at economic data, these look like the best of times: Inflation is a mere 3%. Unemployment is hovering near 50-year lows. But that's not how the bulk of Americans see it, Axios chief economic correspondent Neil Irwin writes. Why it matters: Americans' views of the economy are colored by their politics as much as the actual state of the economy. A crucial question for the 2024 election cycle — not to mention the national state of mind — is whether the quite solid economic backdrop will start to translate into a broader sense of things-on-the-right-track, can-do optimism in the year ahead. 🧮 By the numbers: The economy is in a pretty great place if you follow only the stats. The misery index — a handy, if simplistic, measure of economic distress that is the sum of the jobless rate and inflation — stands at 6.7%. That's higher than just before the pandemic (5.8% in February 2020), but lower than what is remembered as the boom times of 2000. Yet most measures of how people feel about the economy remain quite soft, even after a June surge. The Gallup Economic Confidence Index has rebounded from recent lows last summer, but remains substantially lower than it ever was in the 2010s or during the 2001 recession. 🥊 Reality check: Polling about the economy is extremely polarized. A survey question along the lines of, "Do you think economic conditions are good or bad?" is answered more along the lines of: "Do you like the current president or not?" In October 2020, just before President Trump lost re-election, Republicans' economic sentiment was 26 points higher than Democrats' in the University of Michigan consumer sentiment survey. In February 2021, after Biden took office, Republicans rated the economy 28 points worse. A similar pattern occurred between the parties around the 2016 and 2008 elections, when partisan control shifted hands. We seem to be experiencing something similar right now. Attitudes about the economy and President Biden's approval ratings are both being driven by bad vibes and the scars of the pandemic. Share this story.

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You’ll Be Very Surprised Who’s Benefiting Most From Bidenomics

Red states, not blue ones, are seeing the biggest income gains. But it’s not for the reason Wall Street Journal editorialists think.

https://newrepublic.com/article/174252/bidenomics-benefits-red-states-more-blue-states?

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📉 Where inflation is falling

Data: Bureau of Labor Statistics. Map: Axios Visuals All regions of the U.S. saw sharp drops in inflation in June, Bloomberg notes from Bureau of Labor Statistics data. New England now has the lowest annual inflation rate for any region in the past two years — just under 2%. The South and Mountain states are holding onto some of the highest inflation rates — 3.8% and 3.7%, respectively.