CNN
—
President Joe Biden arrived on the White Home in 2021 at a time of heightened chaos and uncertainty throughout a rustic reeling from the pandemic. Biden used his inauguration tackle to advertise unity, in hopes of delivering a nation that’s “stronger, more prosperous, more ready for the future.”
However, as Biden has acknowledged all through his time in workplace, there’s extra work to be achieved. That job might now fall to Vice President Kamala Harris, who inherits Biden’s marketing campaign guarantees to rebuild the center class, put money into infrastructure, increase home manufacturing and decrease well being care prices.
Since Harris kicked off her presidential marketing campaign, there’s been a string of excellent information for the US economic system.
Sturdy GDP numbers on Thursday — and the chance that the US is pulling off the uncommon feat of bringing down inflation with out throwing the economic system into reverse — give Harris one other level to convey out on the marketing campaign path in her effort to steer Individuals to provide her the White Home in November. And on Friday, the Federal Reserve’s most well-liked inflation gauge fell nearer to the central financial institution’s 2% goal — all however cementing a charge reduce in September.
Harris may have Biden’s principally sturdy economic system to run on. Nonetheless, one among her greatest challenges is lifting the detrimental emotions many Individuals have in regards to the economic system, stemming from sharply greater costs for every part from groceries to hire over the previous 4 years. It stays to be seen whether or not these perceptions will enhance now that Biden is out of the race.
Right here’s the place the economic system stands because the presidential race heads into its remaining 100 days.
Inflation, rates of interest and a resilient economic system
When Biden took workplace, inflation was barely noticeable, with client costs rising 1.4% yearly. That shortly took a flip for the more severe.
By June 2021, Biden’s sixth month in workplace, the nation’s inflation charge jumped to greater than 5%. A yr later, after Russia’s invasion of Ukraine despatched power costs hovering, inflation hit 9.1%, the very best stage in over 40 years. However a lot of that inflation was additionally the product of hefty spending below each Trump and Biden administrations within the wake of the pandemic.
Inflation has since cooled down rather a lot, and for the primary time because the begin of the pandemic, costs fell final month. However, on the entire, Individuals are paying 20% extra for items and providers in comparison with January 2021, in line with Shopper Value Index information.
After the Federal Reserve hiked rate of interest hikes to a 23-year excessive to stamp out inflation, the economic system — ultimately — began to run at a slower tempo. Nonetheless, it hasn’t slipped right into a recession, which is without doubt one of the dangers that comes with the Fed lifting charges so quickly. Gross home product, a measure of all the products and providers produced within the economic system, was strong within the first half of the yr. GDP rose at a strong 2.8% annualized charge from April via June, after adjusting for inflation and seasonal swings, in line with Commerce Division figures launched Thursday.
In April 2020, because the US economic system got here to a screeching halt as a result of pandemic, the nation’s unemployment charge soared to just about 15%, its highest stage because the Bureau of Labor Statistics started monitoring it in 1948.
By the beginning of Biden’s time period, the unemployment charge had already fallen to six.4%. However for a lot of his presidency, the continuing energy of the labor market defied expectations. The unemployment charge stayed beneath 4% for greater than two years, the longest such stretch of time because the Nineteen Sixties. Nevertheless it’s since gone above 4% as cracks within the labor market are beginning to kind.
The Biden-spearheaded bipartisan Infrastructure Funding and Jobs Act and the Inflation Discount Act put greater than $1.6 trillion towards rebuilding and modernizing infrastructure, fueling clear power investments and bolstering America’s manufacturing business.
Whereas it should take years, if not a long time, to comprehend the complete results of the sweeping laws — the funding, development and implementation processes take time — the US economic system has already seen a few of the near-term results, together with booms in industrial services, electrical automobiles and manufacturing jobs and the beginning of long-awaited municipal tasks to exchange bridges and lead pipes.
A clear power and oil manufacturing increase
Biden’s power legacy has usually been tied to wash power, not fossil fuels. His 2022 Inflation Discount Act included greater than $350 billion in assist for electrical automobiles, charging stations and related objects.
He was typically seen as anti-oil, attacking oil firms for report gasoline costs after Russia’s invasion of Ukraine.
However home oil manufacturing hit a report in 2023, with a day by day common of 12.9 million barrels of oil produced. That’s greater than any nation has ever produced. Thus far 2024 manufacturing is up one other 3%.
Dubbed essentially the most “pro-union president in our lifetimes” by the AFL-CIO, Biden has typically been a superb buddy to organized labor.
His Nationwide Labor Relations Board has often sided with unions and staff. In the course of the 2023 United Auto Employees strike he grew to become the primary sitting president to affix a picket line. Union membership and organizing rose throughout his tenure, and unions gained double-digit pay hikes for shut to 1 million members final yr.
However he and Congress additionally imposed unpopular contracts on freight railroad unions, slightly than allow them to go on strike. And even some labor allies expressed considerations about his reelection bid.
Reduction for customers, households and seniors
From forgiving tens of millions of scholar loans to clamping down on junk charges, the Biden administration has targeted on methods to avoid wasting customers billions of {dollars} yearly.
That features a marketing campaign to eradicate or cap “hidden junk” charges and require companies to be clear about all charges up entrance. The Biden administration additionally finalized a rule to make it simpler for airline passengers to get immediate, automated money refunds when flights are canceled or considerably modified and to see upfront details about charges for baggage and altering flights.
His administration additionally supplied financial reduction for US households through the pandemic: Biden signed into legislation the American Rescue Plan Act in 2021, which represented one of many largest federal efforts to scale back poverty within the final half-century.
Amongst a bevy of financial reduction measures, ARPA briefly expanded the kid tax credit score, which reduce the US baby poverty charge almost in half. By the Inflation Discount Act, the Biden administration capped month-to-month insulin prices for Medicare enrollees at simply $35, amongst different drug-cost-lowering provisions.
His administration has additionally decreased scholar mortgage debt in order that, as Biden put it, greater schooling may be “a ticket to the middle class, not a barrier to opportunity.” Thus far, his administration has canceled $168 billion in scholar mortgage debt for 4.8 million Individuals.
The Biden administration led a regulatory crackdown on a few of the greatest names in company America, notably difficult the market dominance of tech giants Apple, Amazon, Meta and Google.
Collectively, the Federal Commerce Fee, led by Lina Khan, and the Division of Justice’s antitrust division, led by Jonathan Kanter, sued aggressively to dam company mergers, spearheading an try to meet Biden’s marketing campaign promise to curb what he framed as company greed driving costs greater.
The companies took large swings, throttling proposed offers amongst main grocery chains, airways and pharmaceutical firms. It wasn’t an ideal report — the FTC notched some notable losses, together with its effort to dam Microsoft’s $69 billion acquisition of online game maker Activision Blizzard. And lots of efforts, together with the DOJ’s landmark case towards Apple, may very well be tied up in litigation for years.
Biden has taken a largely protectionist stance towards the tech business, together with signing a high-profile invoice in April 2024 to ban Chinese language-owned video-sharing app TikTok until it finds a brand new proprietor, citing nationwide safety considerations.
He additionally gave an enormous increase to home chip manufacturing and analysis with the CHIPS and Science Act, which handed in 2022 and loved bipartisan assist, as a part of a bid to assist the US regain its place as a number one semiconductor chip producer.
However his reception in Silicon Valley was lower than pleasant as his administration gave extra scrutiny to Massive Tech mergers. In 2023, the Justice Division and FTC unveiled new pointers geared toward blocking offers regarded as anticompetitive.
Harris, against this, desires to develop into the primary president from Silicon Valley and has acquired a principally heat reception from the tech business.
Right here’s how the inventory market carried out throughout annually of President Biden’s time period.
2021: The S&P 500 jumped 27%. The inventory market prevailed as soon as once more regardless of the lethal Covid-19 pandemic. However buyers started bracing for the chance that the Fed might hike charges for the primary time since March 2018 and finish the period of “easy money.”
2022: The S&P 500 nosedived 19%. Shares fell because the Fed started shortly mountain climbing near-zero rates of interest to tame wayward inflation, stoking worries that prime borrowing prices might eat into company earnings.
2023: The S&P 500 popped 24%. Shares logged a strong yr regardless of the Fed’s continued rate-hiking marketing campaign. That was largely due to the substitute intelligence growth, which led to a surge in seven key tech shares, referred to as the Magnificent Seven, poised to be on the forefront of the revolution.
2024: The S&P 500 is up about 16% for the yr after notching repeated report highs. Sturdy company earnings this yr have helped push shares greater, in addition to the continued AI growth. Cooling inflation information in current months and hopes the Fed will quickly reduce charges have sparked extra euphoria, although shares have tumbled in current periods.
