White House officials are mum on the prospects of a recession, even as talk of an economic downturn increasingly dominates the political conversation in Washington and on Wall Street.
“What our economic team feels and what the U.S. government economic team feels is that the economy has a very strong basis,” said Jen Psaki, White House press secretary. “Our recovery has been incredibly strong on most measures. We created more jobs last year than any year in American history.”
Although Ms. Psaki admitted that soaring inflation was a concern, she said the White House is confident it can reduce costs without any undue impact on the economy.
“There are steps the president is taking from fixing the family glitch to make sure people have lower cost of health care, to even extending the student loan pause to make sure that even as our economy is continuing to recover, we’re reducing costs,” she said. “So we’re going to continue to address that, but we feel our economy has strong faces right now.”
The positive rhetoric from the White House is the polar opposite of what economists are saying.
Many say that the Federal Reserve System’s efforts to lower inflation by raising interest rates are likely to trigger a recession in the coming months. They note that the economy, wracked by supply chain issues and an overly generous COVID-19 relief package, appears primed to enter a tailspin as interest rates jump.
“Most signs that count are pointing to a recession,” said Carl Schramm, an economics professor at Syracuse University.
Some of the world’s leading financial institutions are issuing a similar warning. Deutsche Bank economists issued a report Tuesday forecasting a recession starting next year that will see U.S. unemployment rise to at least 5%, up from 3.6% in March.
The warnings do not bode well for President Biden and Democrats, who retain narrow control of Congress. Democrats were already expected to lose seats, as the incumbent president’s party historically has done poorly in the first midterm elections.
“People are always going to look for someone to blame for these kinds of economic issues,” said J. Miles Coleman, an elections analyst at the University of Virginia’s Center for Politics. “That happens to be the Democrats because they are in power now.”
Complicating matters for Democrats is that Mr. Biden’s approval rating is at one of the lowest points of his White House tenure.
A new CBS/YouGov poll released Sunday found that just 42% of U.S. adults approve of the job Mr. Biden is doing in the presidency. Meanwhile, 58% of adults said they disapproved of Mr. Biden’s job performance.
“Rising gas prices, skyrocketing costs, an open border, and violent crime — Biden’s agenda is woefully out of touch with American workers and families,” said Will O’Grady, a spokesman for the Republican National Committee. “These numbers reflect just how much of a burden Joe Biden is to his party.”
The results indicate a steady across-the-boards decline in Mr. Biden’s popularity. The president’s job approval was initially as high as 62%, according to a CBS/YouGov poll conducted in March 2021. Since then Mr. Biden has lost ground among all political groups, accounting for the 20% decline in job approval over the past year.
Much of the frustration with Mr. Biden among those polled comes from the president’s perceived mishandling of the economic and foreign crises.
Among those polled, 69% of U.S. adults say that Mr. Biden has poorly handled inflation, while 63% say the same for his management of the economy.
“Every Democrat is tied to Biden, and every Democrat up for reelection this November will need to answer for Biden’s failure,” Mr. O’Grady said.
Mr. Biden’s approval rating is particularly troubling for Democrats given that 51% of those polled say that U.S. jobs have increased over the past year. A further 56% of Americans said that their local job market was good.
Correction: White House press secretary Jen Psaki‘s first name and title were omitted in a previous version of this story due to an editing error.