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Biden Says Economy ‘in strong shape’ Ahead of Holidays

Biden Says Economy ‘in strong shape’ Ahead of Holidays
Source: The Guardian

The US economy is in good shape, according to President Joe Biden, owing to government efforts to clear supply chain bottlenecks and combat rising living costs.

He projected that prices, which had been rapidly climbing, would begin to level out.

The president said that programs aimed at reducing port bottlenecks and lowering gasoline prices were succeeding.

“We’re in great shape coming into the holiday season,” he remarked. “It wasn’t by chance,” says the narrator.

When asked how the new coronavirus variety would affect supply chains, President Biden stated he was a “optimist,” but it was too early to say what the impact would be.

A average American family is now better off than it was before the epidemic, according to the president, who called a 40% drop in child poverty “a moral success.”

“Even after accounting for inflation, Americans have roughly $100 (£75.33) more in their pockets each month than they had last year [and] about $350 more each month than they did before the outbreak,” the president added.

The Biden administration has pushed billions of dollars into the US economy since entering office, including direct checks to homeowners and tax benefits.

As the effects of the pandemic faded, economic growth resumed, and after contracting by 30% in the first half of 2020, the economy is now restored to its pre-pandemic level.

However, rising demand for products, combined with ongoing delays in supply and delivery, has pushed inflation to 6.2 percent, the highest level in 31 years.

President Biden stated, “I’ve tried every option possible to combat the price hikes.”

He noted that releasing a portion of the US’s oil reserves last month in a concerted effort with several other countries to lower fuel prices was “making a difference.”

He emphasized that an independent economic analysis suggested that his Build Back Better measure would lessen inflationary pressures.

The plan was fully funded, and it would help to reduce the deficit by “having the largest businesses and the wealthiest Americans pay a bit more in taxes.”

The US Senate has yet to vote on the $1.9 trillion (£1.4 billion) Build Back Better plan, which contains social and climate investment.

“This is the first time I’ve seen labor and industry so willing to work,” the president remarked when asked why he felt he would be able to lower inflation while prior governments in the 1970s and 1980s failed.

“People are in a different mindset than they were during the Carter and Nixon administrations.”

President Biden welcomed the CEOs of many of the country’s major manufacturers and retailers earlier this week, including Walmart, CVS Health, Mattel, and Best Buy.

He claimed the CEOs stated that their stocks were up and their stores were well-stocked, ready to meet holiday customer demand.

Biden said that the Obama administration had “ripped up log jams” in the supply chain by pushing port operators to work longer hours, among other things.

He also mentioned the loosening of hours-of-service regulations for truck drivers. He claimed that the restrictions were effective, claiming that the amount of containers stranded on ports for more than eight days had decreased by 40%.

According to Michael Pearce, a US economist at Capital Economics, the president was correct in implying that some of the economy’s stressors were beginning to alleviate, but that all of the difficulties would not go away overnight.

“Despite this, there are still significant supply issues. Even if they’re starting to fade, it’ll take some time for that to happen, especially now that inventories for many commodities is so low “He told reporters about it.

He predicted that any remaining inflation will last long into next year, due in part to the trillions of dollars pushed into the economy by the epidemic.

Mr Pearce noted that the Omicron variation, and fears that it would harm economic development, were likely having a bigger influence on gasoline prices than the decision to unleash oil reserves.

Mr. Biden’s Build Back Better measure, according to Diane Swonk, chief economist at Grant Thornton, might have a pro-inflationary impact in the short run unless politicians adjust it more.

Omicron, the resolution of supply chain issues, and a reduction in government stimulus in the coming months, she believed, would “take the steam out of inflation, but not chill it down sufficiently.”

“The danger is that we’ll continue to experience interruption until we can actually bring the virus to its knees,” Ms Swonk added.

“We’re starting to see more broad-based inflation, which will almost certainly last longer.”