Where America’s recent record looks exceptionally good is growth. Sadly for the president, though, this has little to do with him
, however, another part of his record tells a less flattering story. High inflation continues to imperil the economy and vex voters. And placing his record in a global context reveals that he is more responsible for surging prices than he is for abundant jobs.
Mr Biden is right that America’s post-covid jobs recovery has been exceptional by historical standards. After the global financial crisis it took 13 years, by some measures, for the labour market to regain its health. This time it has taken little more than three years. The White House attributes surging employment to the $1.9trn “rescue plan” Mr Biden unleashed shortly after taking office in 2021.
That employment bounced back in most places suggests that America’s jobs recovery had more to do with the unusual nature of the pandemic recession, brought about by lockdowns and social distancing, than with Mr Biden’s gargantuan stimulus. The extra public spending surely boosted demand for workers, but what followed was a historic surge in job vacancies and worker shortages as the economy overheated. Actual employment would almost certainly have shot up anyway.
Mr Biden’s stimulus did, however, put a rocket under inflation. In April “core” consumer prices, which exclude energy and food, were 13.4% higher than when he came to office. They have risen more than in other7 countries, and their acceleration coincided with the introduction of Mr Biden’s stimulus. Research suggests that, even by September 2022, the largesse was pushing up core inflation by about four percentage points.
Voters seem to sense that the main effect of the president’s economic policies to date has been to worsen inflation. Polls show that far more Americans think Donald Trump, Mr Biden’s predecessor and probable opponent in 2024, did a better job than Mr Biden of handling the economy, than the reverse. The longer inflation persists, the more likely it becomes that the Fed keeps rates high enough to tip America into recession—perhaps around the time of the election.
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