Joe Biden during a speech in Superior, Wisconsin, January 25, 2024. (AFP/SAUL LOEB)
The United States once again experienced solid growth in 2023, defying predictions of recession, an opportunity for the Biden administration to praise its economic policy and contrast it with that of Donald Trump, the likely Republican candidate in the race for the White House.
The expansion of the American gross domestic product (GDP) accelerated in 2023, to 2.5% against 1.9% the previous year, according to the first estimate from the Commerce Department, published Thursday.
American growth (AFP/STAFF)
“Experts, since I was elected, have continued to predict an imminent recession…” President Joe Biden joked during a speech in Superior, Wisconsin.
Growth in the fourth quarter alone also warded off fate, at 3.3% annualized – which compares GDP to the previous quarter then projects the development over the year.
“The fourth quarter GDP exceeded all forecasts” (…) and capped a resilient year,” commented Kathy Bostjancic, chief economist at the Nationwide insurance company.
The Biden administration has constantly touted the effects of its economic policy, “Bidenomics”.
Especially since Donald Trump regularly highlights the good health of the economy when he was in charge, but also that of household finances, before the surge in prices.
– “Bygone era” –
“Economic growth is stronger than what we had under the Trump administration,” greeted Joe Biden.
“Thanks to the American people, the United States today has the strongest growth and the lowest inflation rate of all the major economies in the world,” he said, recognizing however that he “rest of work”.
Customers in a supermarket in Rosemead, January 19, 2024 in California (AFP/Frederic J. BROWN)
Consumption, the main driver of the American economy, remained solid in 2023, despite purchasing power being eroded on the one hand by inflation and on the other by rising interest rates.
Because wages have also increased and, since mid-2023, their increase has been stronger than that of prices.
American GDP had been on a roller coaster ride in 2020 and 2021, first recording the largest decline in GDP since 1946 (-3.5%) and two months of recession due to Covid-19, then the strongest growth since 1984 (+5.9%).
“None” of Joe Biden’s policies “are intended to recreate a bygone era. This country and the world have changed and we cannot go back,” Treasury Secretary Janet Yellen also said on Thursday.
Joe Biden’s Minister of Economy and Finance spoke about the various plans adopted by the Democratic administration, which are boosting investments, among others, in infrastructure or green industries.
A strong nod to Donald Trump, who regularly accuses his Democratic rival of killing the American dream, the “American Dream”, and promises, as in 2016, to “restore” the country “to its greatness”.
– Recession still possible –
“What we need is a new future (…) powered by 21st century industries, and at the heart of which is the middle class,” insisted Janet Yellen, during this speech in Chicago (Illinois) .
“The (Biden) administration is building the foundations of this future,” she assured, praising “the most equitable economic recovery in the history of the United States.”
Joe Biden also won a welcome victory on Wednesday, winning the support of the influential American automobile union UAW, which called for a vote for him in November.
But the game is far from won.
Passers-by on a street in New York, December 28, 2023 (AFP/Archives/Kena Betancur)
The situation has certainly greatly improved on the inflation front, and the job market remains very dynamic.
But the president is not yet safe from an economic slowdown, or even a recession, in the middle of the electoral campaign.
Lydia Boussour, economist for EY Parthenon, is counting on “a soft landing”, however “with a probability of recession of around 35%”.
The American central bank (Fed), however, is expected to lower its rates in 2024, which will make credit more affordable for households and restore their purchasing power.
But not immediately: a maintenance of the current level is expected on Wednesday, after the next monetary meeting.
© 2024 AFP
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