Guest post by Antonio Graceffo
The economy is booming, and “Bidenomics is working,” the White House claimed, but most Americans are struggling as if it were the 1970s again.
Here is how they are intentionally misrepresenting the numbers to make the economy look better than you know it is.
In 2021, when the U.S. loosened up the lockdowns, the economy shot up, reaching a GDP growth of 5.9%. So technically, yes, under Biden, the economy soared, but it was only because the economy went negative when Fauci locked it down.
It had nowhere to go but up, and both the crash and the alleged growth were artificially caused by government policies. Despite experiencing just one exceptional year of stellar growth, and subsequent normalization of GDP, the four-year average remains exceptionally high due to that one remarkable year.
Moreover, with only three years of available data, including 2021’s 5.9% growth, 2022’s 1.9%, and 2023’s 2.5%, the average growth rate stands at 3.43%, and Biden gets to claim 71% better growth than the usual average of 2%.
Inflation statistics are another area where the White House is playing games. U.S. inflation has been the worst under Biden than it has been in the past 40 years. However, the White House is claiming that inflation is down, and it is.
It peaked in June 2022 at 9.1% and was down to 3.4% in 2023. Normally, the Fed targets inflation of about 2%, so 3.4% is still too high. However, Biden can claim to have reduced inflation by 62%, which is amazing! What other president can make that claim? Meanwhile, the inflation rate is still about 70% higher than normal.
Another important point, which the White House is ignoring, is that reducing inflation is not the same thing as reducing prices. When Biden claims to have reduced inflation, all he actually reduced was the rate at which prices are rising.
Prices are still going up, just more slowly. Inflation works like compound interest, which was once said to be the most powerful force in the universe. Since Biden took office, cumulative inflation is about 18%. That means most products you buy cost 18% more now than they did under Trump.
To make matters worse, many daily necessities have their own inflation rate, which is a lot higher than the average inflation. Gasoline went up by 38.8% from 2021 to 2023. New car prices increased by 13.5%. Median home sale prices increased by 25.4%. Overall, food prices rose by 10.6%.
While product prices have surged, wages haven’t kept pace. According to the Bureau of Labor Statistics, cumulative wage growth from 2021 to 2023 has been 14.5%. However, factoring in inflation turns your wage growth negative.
Your salary increased by 14.5%, while product prices increased by 18%. As a result, your purchasing power has diminished. If you rely on credit for purchases, they become even more expensive.
The Federal Reserve’s interest rate, at zero in 2021, has now risen to 4.75%. The average home loan rate increased from 3.1% to 6.54%. Similarly, the interest rate on new car loans rose from 5.07% to 7.03%. Worst of all, the interest rate on loans for used cars skyrocketed, jumping from 6.71% to 11.35%.
Anyone seeking a job or endeavoring to maintain employment and support a family recognizes the tight job market, with layoffs occurring extensively. However, the official unemployment figure of 3.7% appears questionable.
First off, the Bureau of Labor Statistics deems you employed even if you work only one hour per week, without benefits. Consequently, many companies are avoiding layoffs by reducing benefits and hours. While this strategy prevents a shift in statistics, it leaves individuals financially worse off.
Official unemployment dropped from 5.3% in 2021 to 3.7% in 2023, enabling Biden to claim a 30% reduction in unemployment. However, unemployment only includes individuals actively seeking a job. Those who left the workforce, simply giving up, are not considered.
Under Biden, the number of individuals in this category has increased. The Labor Force Participation rate was 61.7% in 2020 but dwindled to 60.8% in 2023. With the U.S. labor force comprising about 167 million people, approximately 1.5 million people have given up under Biden and stopped trying.
If Bidenomics is working, as the White House claims, then his intent must have been to raise prices, drive people out of the labor market, and decrease the standard of living, because that has been the experience of most Americans.
Dr. Antonio Graceffo, PhD, China MBA, is an economist and national security analyst with a focus on China and Russia. He is a graduate of American Military University.
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