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There has been a whole lot of positive economic news for President Joe Biden in recent months, but the latest figures on the slowing growth of the gross domestic product (GDP) must have him and his campaign worried.
Preliminary figures for the first quarter of this year from the Bureau of Economic Analysis showed that the GDP increased by 1.6 percent, which is the slowest rate in almost two years and well below expectations.
It is also less than half of the 3.4 percent increase from the fourth quarter of last year.
At the same time, inflation is on the rise again.
Both are troubling signs for Biden. One of the pillars of his presidential campaign is that “Bidenomics” works. That is already a challenge because Americans are still feeling the very real effects of a surge in inflation.
At this point, it is worth noting that presidents and their policies often have little influence over how the economy performs. For example, you can only somewhat blame former president Donald Trump for COVID-related job losses under his watch, or Biden for serving during a global surge in inflation that is also linked to the pandemic.
However, these nuances are often lost on talking heads and, especially, voters.
They care mostly about the prices they pay at the pump or at the grocery store, whether their paycheck is increasing, and how the stock market performs. With regard to the latter, the Dow Jones was down almost 700 points in morning trading.
Republicans quickly seized on the news to make the argument that Biden’s economic policies aren’t working.
“Today, GDP growth for the first quarter came in at a shockingly low 1.6 percent, well below the forecast,” said House Budget Committee Chairman Jodey Arrington (R-TX). “This comes on the heels of inflation rising to 3.5 percent for March, the highest rate in 6 months. The economy continues to slow, and costs continue to rise.”
The GOP lawmaker blamed the “Democrats’ reckless spending and President Biden’s failed economic policies” for the economic slowdown. Of course, with Republicans in control of the House, any new government spending must have at least some GOP support.
“Today’s report confirms a timeless and simple economic principle: when you overstimulate demand with massive federal spending and — at the same time — constrain supply with increased taxes and regulations, you get inflation, interest rate hikes, and a weak and receding economy,” Arrington added.
Obviously, the data from the next two quarters will be made public before the election, but expect to hear a lot in the coming days about the weakening economy.
In the meantime, the Biden administration and its allies may point out that even the slow GDP growth far outpaces the increase of the European Union’s economy, which is expected to rise by less than 1 percent this year.
However, that is probably not an argument that is going to convince voters that the US is on the right path.
