Biden preaches patience to voters spooked by economic tumult

WASHINGTON (AP) — When it comes to reassuring Americans about an economy that poses an election-year challenge for his party, President Joe Biden is urging the country to hold on.

It’s a message of patience as voters are rocked by persistent inflation, recession fears and the prospect of rising energy prices in the closing weeks of the campaign season as they decide the fate of vulnerable Democrats and control of Congress.

The $25+ trillion economy is moving in two radically different directions.

Growth has fallen for two consecutive quarters, raising the specter of a recession. But job gains have picked up, including 263k more in September in a sign of economic health. Nonetheless, the latest jobs report on Friday sent stocks plummeting on renewed fears that the Federal Reserve will have to continue aggressively raising interest rates to curb rising consumer prices.

Biden argued that the latest numbers are solid and have slowed in recent months in a way that suggests inflation is weakening. Big oil-producing countries, led by Saudi Arabia and Russia, “disappointed” him last week with their decision to cut production, but the US government forecast domestic production will rise by an average of about 840,000 barrels a day over the next year becomes.

Speaking at a Volvo powertrain factory in Hagerstown, Maryland, Biden again tried to argue that there were many more factory jobs on the horizon.

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“That’s the progress we need to see,” the president said. “In the short term, the transition to more stable growth that continues to benefit workers and families while lowering inflation. In the long term, the economy is on firmer footing. We still have a lot to do. We are building a different economy than before, a better one, a stronger one.”

However, polls show that Biden consistently gets low marks for his handling of the economy, and people in the United States generally see the country as on the wrong track.

A September poll by the Associated Press-NORC Center for Public Affairs Research found that just 38% of respondents approved of Biden’s economic leadership. 29% of US adults say the economy is in good shape, while 71% say it’s bad. That was better than June, when 20% said conditions were good and 79% bad.

While Biden does not stand for election on Nov. 8, Democratic candidates face relentless criticism from Republicans who want to make the election a referendum on the president’s performance. With GOP ads citing inflation and high gas prices, pressure is mounting for the White House to address public concerns about the economy ahead of Election Day.

Jason Furman, who headed the White House economic adviser under President Barack Obama, said the jobs numbers were a political win for Biden but also a warning of the economic troubles to come as the Fed comes under pressure to hike rates to fight inflation.

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“Price levels are still high and headline inflation is likely to have picked up every month from July through October due to gas price momentum,” Furman said. Limiting this, he said, “unfortunately will take a lot of time and potentially a lot of pain before they’re successful.”

Nowhere is Biden’s messaging challenge more pronounced than on gas prices.

For 99 days, the White House has highlighted falling prices after peaking in June. But they started rising last month, and they’ve continued to soar since OPEC and its partners announced severe production cuts on Wednesday.

According to AAA, the US national average is now $3.91 per gallon. That’s below the June high of $5.02, but higher than a month ago ($3.74) and a year ago ($3.27).

In late March, Biden ordered the release of 1 million barrels of oil per day from the US Strategic Reserve for six months to help lower prices. The White House now says the government is considering further releases to offset OPEC cuts. It has also tried to get oil companies to increase production and cut their profit margins.

Meanwhile, the Fed expects inflation to come closer to the central bank’s target of no more than 2% a year — it was 8.3% higher in September than a year earlier — will require a contraction in the job market that brings in at least a million could people without work.

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Fed officials said last month that the unemployment rate would rise to 4.4% next year – almost a full percentage point – if inflation falls below 3%. Biden’s attitude, cheered on Friday, could soon give way to losses.

OPEC’s production cut could mean it will become even harder to bring down inflation as more expensive gas forces the Fed to take more drastic action to cut prices, costing even more jobs.

Investment bank Goldman Sachs hinted on Thursday that oil prices will reach $110 a barrel later this year, compared to its previous forecast of $100 a barrel. That would result in higher prices at the pump and has given Republicans more evidence that he has put the economy at risk.

“The President denies that America is experiencing a dangerous wage-price spiral that will result in high inflation for years to come, that we are in stagflation, and that we are either in or about to enter a harsh recession — all of it created by botching the reclamation,” said Texas Rep. Kevin Brady, the top Republican on the House Treasury Committee’s Pathways and Appropriations Committee.

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