REHOBOTH BEACH, Del. (June 3, 2022)– President Joe Biden spoke before the American people via a television cameras Friday to celebrate yet another month of healthy job growth and low unemployment and the fastest pace of hiring in four decades under his watch.
“The job market,” the president declared, “is the strongest it’s been since just after World War II.” But most people are quitting their jobs and most job vacancies created are left unfilled.
Yet just as it often does, the subject soon turned to the rampant inflation that has emerged as the economic issue most on Americans’ minds and a leading reason for Biden’s sunken public approval ratings. The Biden’s administration is also facing a soaring baby formula matter. Even Biden’s Democratic Party questioned his position about his lack of knowledge about the baby formula.
“I almost couldn’t believe what I was hearing,” said one Democratic strategist. “He has to show that he’s on top of these situations. The last thing they want is to be the subject of another Republican talking point.” According to Biden, he wasn’t “aware of the gravity of the situation until April,” said the White House Press Secretary.
“Almost everything since the Afghanistan withdrawal foul-up has been Biden and the White House playing catch up,” the strategist said.
A second strategist added, “This looks so bad. It raises questions about competency and the more that comes out, the worse it looks,” wrote the Hill.
Biden, said “at an event with formula manufacturers on Wednesday, that he “became aware of this problem sometime in early April, about how intense it was. We did everything in our power from that point on.”
“I don’t think anyone anticipated the impact of the shutdown of one facility,” Biden added.
Voters have made clear in surveys that their attention is focused much more on soaring gasoline and food prices than on the plentiful availability of jobs. A year-long acceleration of prices in the aftermath of the pandemic recession — to the highest levels in four decades — has left many Americans struggling with the cost of necessities and dissatisfied with the overall economy.
On Friday, that dynamic left Biden promising to fix the economy to try to shore up public confidence and his flagging poll numbers.
Mom’s across the Nation are scrambling to make ends meet. Heads of households can’t afford to feed their families because of high gas and food prices.
Jean-Pierre would not answer a question on Wednesday about whether Biden was frustrated or disappointed that he was not aware of the crisis until April. Instead, she repeatedly pointed to an FDA review of the handling of the Abbott facility closure and resulting shortages.
“FDA did their part here. But [the FDA commissioner] also admitted that they moved too slowly,” she said. “And once we saw that the supplies were not meeting the demand, we acted. We took urgent action.
“So, that is the way that it happened,” Jean-Pierre added. “That is the way the timeline was laid out. You may not like my answer, but that is the way we see it.”
“There’s no denying prices, particularly around gasoline and food, are real problems,” the president said in Rehoboth Beach, Delaware, where he is spending the weekend. “I understand that families who are struggling probably don’t care why prices rose. They just want to bring them down.”
It was a stark illustration of the shifting political and economic landscape Biden and Democrats in Congress face as midterm elections loom. For decades, as inflation remained tame, job growth and unemployment tended to be the top economic metrics by which voters judged presidents. But now, Biden faces a new era in which, for most Americans, chronically high inflation has eclipsed a consistently strong job market.
The shift shows how the seemingly timeless truths of American politics can become reshaped by the lived-in realities of voters in which old priorities fade and new fears emerge.
At just 3.6%, the unemployment rate is near a half-century low, and on Friday the government reported that employers added 390,000 more jobs in May — roughly double the pre-pandemic pace. Businesses advertised more than 11 million open jobs in April, down only slightly from a record high in March.
Yet Americans are gloomy about the economic outlook and Biden’s record. Two-thirds of Americans disapprove of his handling of the economy, according to a poll from the Associated Press-NORC Center for Public Research conducted in mid-May.
One reason for the disconnect is that people perceive inflation and job gains in very different ways, Felicia Wong, president of the liberal Roosevelt Institute, said during a webinar this week.
“People attribute better jobs and higher wages to their own individualized actions,” said Wong, who served on the Biden-Harris transition team. “ ‘I did a good job. I got a raise.’ I don’t think that most people think about a strong labor market enabled by and driven by policy choices. In contrast, people definitely blame someone else when gas prices go up, when food prices go up.”
Higher inflation, partly stemming from supply chain snarls and Russia’s invasion of Ukraine, is causing hardships for millions of Americans, particularly lower-income and Black and Hispanic households, which spend a disproportionate share of their income on gas, rent and food.
Wages have been rising, but not as fast as prices, thereby eroding most Americans’ spending power. As a result, more people say they’re struggling to pay their weekly bills, according to the Census Bureau’s most recent Household Pulse Survey.
Even with a solid job market, 16 million more households over the past year said they found it “somewhat” or “very” difficult to pay their expenses, the survey found in early May. More households say they’re getting by with credit cards, spending down their savings or borrowing from others.
The financial strain has grown even as the survey showed a 78% decline in households relying on unemployment benefits — a sign that job growth has been insufficient to offset the problems caused by inflation.
Fear of inflation began to build more than a year ago, according to surveys of the likely electorate by the Republican polling firm Echelon Insights. Biden and White House aides initially downplayed the risk that their $1.9 trillion coronavirus relief package could spark higher inflation. They focused instead on the muscular job growth that followed the government spending.
Patrick Ruffini, a partner at Echelon Insights, said that high inflation has caused more voters to favor reductions in government spending and greater oil and gas production — policies favored by Republican lawmakers. Even if inflation falls from current levels, Biden would still likely face the same kind of hostile midterm environment his predecessors endured in 2014 and 2018. At the same time, his past claims that inflation would fade have hurt his credibility.
“For a long time, the Biden administration was not even seeming to acknowledge the problem,” Ruffini said.
The president has repeatedly called inflation a “top priority.” Yet he’s also said that the responsibility for reducing it rests first and foremost with the Federal Reserve. That messaging may work with economists, Ruffini suggested, but voters want to see “political leadership.”
It’s very different from what Biden and his economic team expected when they took office in January 2021. Back then, vaccines weren’t yet being rolled out. And the main worry among Biden and economic officials, such as Treasury Secretary Janet Yellen, was that the economy would grind through another slow jobs recovery, similar to what occurred after the 2008 Great Recession. It took more than six years from the start of that downturn to recover all the lost jobs.
“We want to get something economists call ‘full employment,’ ” Biden said at a Cleveland community college in May 2021. “Instead of workers competing with each other for jobs that are scarce, we want employees to compete with each other to attract work.”
The administration achieved that goal. After 22 million jobs were shed in just early 2020, the height of the pandemic, the economy has recovered all but 800,000. It took two years — rather than six — for employment to essentially rebound.
Biden’s pandemic relief package contributed to that outcome, economists say. It sharply boosted demand through a round of $1,400 stimulus checks, enhanced unemployment benefits and $300-a-month child tax credit payments for most parents.
But that level of spending also fueled inflation, as even some economists who have served in Democratic administrations — including former Treasury Secretary Lawrence Summers and President Barack Obama’s top adviser, Jason Furman — warned that it might.
Consumer prices jumped 8.3% in April compared with a year earlier, down slightly from March but still near the worst in 40 years. Gas prices have skyrocketed 44% in the past year and are still rising. Groceries are 11% more expensive.
Ben Harris, the assistant Treasury secretary for economic policy, said Thursday on the Roosevelt Institute webinar that it is “frustrating” for the Biden administration because the alternative, without their financial aid package, would likely have been much worse: Slower job growth and more economic pain for families.
“We can’t observe the counterfactual, but the counterfactual is really ugly,” Harris said.
Source: KSAT and The Hill contributed.