The United States economy is finally showing signs of significant improvement, much to the relief of President Joe Biden, but one area has challenged a total economic victory for his administration.
Last week, the Commerce Department announced surprisingly strong numbers for the second quarter of 2023. Gross domestic product (GDP), adjusted for inflation, grew beyond expectations and there was a boost in consumer spending and business investment. Unemployment continues to tick downward and average hourly earnings saw the largest 12-month percent gain since March 2021.
“If I were a Biden economist today, I’d be smiling,” Arthur Laffer, an economic adviser to former President Ronald Reagan, told Newsweek on Thursday. “Inflation numbers are coming way down, employment numbers appear to be strong, real wages for the first time appear to be increasing, the GDP number is 2.4 percent—that at least in recent historical context is pretty damn good—the stock markets had 11 straight days of positive.”
But while American paychecks are finally outpacing skyrocketing inflation, they have not been growing anywhere near as fast as prices have the last two and a half years, former president of the Federal Reserve Bank of Minneapolis, Narayana Kocherlakota told Newsweek. So, the two extra dollars that workers are taking home is buying them considerably less than it would have two and a half years ago.
Read more at Newsweek.com
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