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Biden touts success as U.S. economy growth exceeds expectations

By Jake Beardslee · January 26, 2024

In brief…

  • The U.S. economy grew faster than expected in 2023 as inflation fell, prompting Biden promotion of economic policies.
  • Treasury Secretary Yellen touted Biden's middle class support strategy and contrasted with Trump's tax cuts for the rich approach.
  • Strong consumer spending drove GDP growth, though risks remain like potential oil price shocks.
  • Yellen said data shows no troubling inflation signs that would threaten Fed balancing inflation control and recession avoidance.
Despite risks, unexpectedly strong 2023 U.S. economic data has prompted the Biden administration to highlight its economic policies as more beneficial for the middle class than those under Trump.  President Joe Biden/Wikimedia

The U.S. economy exceeded expectations in 2023 with higher than projected growth and declining inflation, prompting the Biden administration to promote its economic policies as effective countermeasures to criticisms by Donald Trump, according to the Commerce Department and top officials.

Commerce reported 3.1% GDP growth for 2023, despite most forecasts predicting recession, according to Politico. This news comes as White House adviser Lael Brainard and Treasury Secretary Janet Yellen this week touted President Biden’s strategy of aiding the middle class as fueling expansion.

“This story of the middle class is not separate from the state of the economy. It’s at the heart of it,” Yellen said this week in Chicago. “By middle class, I don’t mean a narrow or fixed group. I mean workers across industries and occupations - from firefighters to nurses to factory workers.”

However, Trump still leads Biden significantly in polls on economic issues and has focused his campaign on the economy’s purported strength during his administration. Inflation could also resurge from robust growth or shocks like increased Middle East conflict affecting oil prices.

But the Biden administration sees positive signs like last week’s University of Michigan consumer sentiment survey hitting a 2021 high amid cooling inflation and rising stocks.

Yellen contrasted Biden and Trump, stating: “Cutting taxes for the rich and hoping that the benefits trickle down, broadly, is not the right strategy.”

Strong consumer spending drove the positive Q4 GDP numbers suggesting households are not hunkering down, with 2023’s average quarterly growth at 2.5%.

Though warning growth may slow in 2024, Yellen told reporters she sees no inflationary threat in the data that would hinder the Federal Reserve balancing inflation control and recession avoidance.