“Economic growth and inflation” are two factors, the newspaper reported.Washington Post“They may cause harm to US President Joe Biden during the presidential election race.
The newspaper highlighted that the economy may exacerbate Biden’s main weakness as the peak campaign season approaches, as inflation and interest rates could remain high until the final weeks of the presidential election.
According to the newspaper, new data this week show that inflation rose again in March, in the latest sign that the economy is overheating, as unexpectedly strong growth in jobs, wages and consumer spending is positive for most Americans but bad for inflation.
The newspaper explained that the rise in inflation makes it likely that the Federal Reserve will keep interest rates and mortgage rates high until late this year, and perhaps even days after the elections, which will overshadow many of Biden’s political gains.
The newspaper tried to clarify the relationship between economic growth and inflation, and pointed out that a thriving economy could fuel inflation if spending was strong to the extent that consumers were willing to pay high prices for goods and services.
Consumer spending represents two-thirds of the American economy, and so far Americans have been happy to spend on services such as eating out, travel, and hotel stays, despite inflation. This has forced companies to increase hiring and raise wages, which in turn leads to higher prices.
Gasoline prices, in particular, have always played a big role in how Americans feel about the economy, according to the newspaper, which explained that the average gallon of gas rose in the past two months to $3.63 per gallon, Friday.
According to the newspaper, inflation has declined significantly since it peaked at 9.1% in June 2022, with significant declines in almost every category of goods and services. In some cases, expensive goods such as cars, furniture and household appliances have become cheaper in the past year.
But this progress has diminished in recent months, according to the newspaper, which explained that the inflation rate rose in March, and prices increased by 3.5% compared to the previous year, compared to an increase of 3.2% in the previous month.
The cost of a range of essential goods and services, including car insurance, women’s coats, meat and vet visits, was 3 percent higher than in February.
The newspaper believes that fears of rising prices may have already affected Americans again, as consumer morale unexpectedly declined in April, according to a survey conducted by the University of Michigan and published on Friday.
The newspaper quoted Harvard University professor and former chief economist at the Treasury Department, Karen Dinan, as saying, “It is truly a case of bad luck. The Biden administration has made some big strides but is facing one of the most turbulent economies in decades. Lowering interest rates will be welcome to many.” “People, but that’s really changed given what’s happening with inflation.”
During most of his presidency, the Washington Post reported that Biden sought to deliver his message related to the economy, and when inflation began to hit the country for the first time in the months following the Corona epidemic, the president and his team settled on describing the matter as “temporary,” in an attempt to signal to voters that the rise Temporary and will subside. When Russia invaded Ukraine, the White House began using the phrase “Putin prices,” blaming the war for high gas prices.
The president and his aides are frustrated, as the newspaper explained, at not getting enough credit for their attempts to avoid a recession and pass massive legislation, especially the Infrastructure Act and the CHIPES Act, which will transform roads and bridges in the United States and stimulate the domestic semiconductor industry. Aides are divided on how to tout Biden’s legislative accomplishments while many Americans say they are having difficulty buying groceries and other household items.
The newspaper believes that with inflation returning to the rise, the White House is now under renewed pressure to calm Americans’ economic fears. Stock markets fell this week, as investors realized that an interest rate cut was no longer imminent.
But the newspaper pointed out that the US President took an unusual stance this week by commenting on the next step of the Federal Reserve, saying that he adhered to his expectations that the central bank would lower interest rates by the end of the year.
The Washington Post reported that the election itself may delay the Federal Reserve’s plans to cut rates. Investors generally expect the central bank to shy away from policy changes in the run-up to the presidential race, out of concern that it may be seen as favoring one candidate over another.
Job creation in the United States, last March, achieved growth that far exceeded expectations, according to government data published on Friday, which enhances the possibility of the Federal Reserve (the US central bank) keeping the borrowing interest the same for a longer period, according to what was stated in a previous report by Al Hurra, on 6 April.
The world’s largest economy created 303,000 jobs in March, an increase of more than 50,000 jobs compared to 270,000 jobs created the previous month, according to what the Ministry of Labor announced.
The increase, which comes seven months before an election in which Biden and former Republican President Donald Trump will face off in November, is much higher than market expectations for an increase of 200,000 jobs, according to the Briefing website.
The unemployment rate fell to 3.8 percent from 3.9 percent in February, in line with expectations, continuing the streak of unemployment rate below 4 percent, the longest in decades.
A statement by the US President said, “The report issued today represents a milestone in the return (recovery) of the United States.”
Biden added, “Three years ago, I inherited an economy on the brink of the abyss. With the report issued today stating that 303,000 jobs were created in March, we have crossed the threshold of 15 million jobs created since I took office.”
In addition, the wage growth rate increased by 0.3 percent on a monthly basis, while average hourly earnings increased by 4.1 percent from the previous year, according to figures from the Ministry of Labor.
The labor force participation rate remained almost stable at 62.7 percent.
The largest share of jobs created was in the healthcare and government sectors, and to a lesser extent in the leisure and hospitality sectors.
The numbers reflect a slight decline in the unemployment rate in general, despite its increase among black Americans, noting that this increase was offset by a decrease among those of Asian and Latin origins.
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