Biden gets set to lean into economy in 2024

President Biden is expected to lean into an economic message as he and his campaign team conduct a soft launch of his reelection campaign in the coming weeks, sources familiar with his plans say.  

A strong report on the economy this week that showed the nation is adding jobs even as inflation cools is stoking confidence among Democrats that the economy can bolster Biden in 2024, after many feared it was a hindrance in the 2022 midterm message for the party.

With the State of the Union address on Feb. 7, Biden is likely to give an upbeat tone on the economy that will roll into a campaign message that Democrats expect will highlight strong job numbers and rising wages.

“The economy can and will be a winning issue for Biden,” said Gabriel Horowitz, senior vice president of the economic program at centrist think tank Third Way. “When you look at the top-line stats, they’re incredibly impressive. These are massive accomplishments.” 

If an expected message at the State of the Union is that this union is strong, the projected message Biden wants to tout in 2024 is that the nation is stronger under his leadership and is emerging in good shape after the coronavirus pandemic.

“Are we better off than we were two years ago? Yes,” said Robert Wolf, a prominent Democratic fundraiser and the former chairman and CEO of UBS Americas, said of Biden’s message. “We have a strong jobs market with wages going up. And inflation has peaked and is coming down.” 

Biden is eager to claim credit for a record-breaking recovery from the COVID-19 recession — powered in part by the stimulus he and Democrats deployed soon after he took office.

Under Biden, the U.S. economy gained 11.2 million jobs, and gross domestic product bounced back rapidly from the onset of the pandemic in 2020. The U.S. has replaced all of the jobs and GDP lost during the recession, all while a record-strong labor market lifted wages for millions of American workers. The December jobless rate of 3.5 percent is also even with the unemployment rate in February 2020, which was then the lowest in more than 50 years.

Inflation also appears to be firmly on its way down after several months of cooling price growth.

The annual inflation rate fell to 5 percent in December, according to personal consumption expenditures price index data released Friday, down from 5.5 percent in November and a peak of nearly 7 percent in June. That steady decline will likely let the Federal Reserve slow down its interest rate hikes, which may also give consumers relief.

“I don’t think it’s unfair to say that this is all evidence that the Biden economic plan, because of you all, is actually working,” Biden said Thursday in a speech to union workers in Springfield, Va.

“We’re moving in the right direction,” he said.

Republicans have criticized Biden for claiming economic victories and are prepping their own arguments for why his policies are holding back growth. 

“American families are poorer because of Biden,” Tommy Pigott, the rapid response director for the Republican National Committee wrote to reporters this week, pointing to 20 months of high inflation that ran ahead of wage growth on the heels of Biden’s $1.9 trillion stimulus package. “That’s nothing to brag about.” 

Much of the recovery under Biden was also in the works well before he took office.

Economists say two years of low Fed interest rates, groundbreaking COVID-19 vaccines and bipartisan stimulus packages passed under former President Trump were also key forces behind the swift recovery under Biden. Many experts, however, still credit Biden’s March 2021 $1.9 trillion stimulus bill and efforts to staunch the energy shock driven by the war in Ukraine for some of the economy’s resilience.

“The Biden administration (and the Trump administration beforehand) did not make grievous errors macroeconomically. They got the Big Stuff right – keep household incomes fairly steady,” wrote Matthew Darling, employment policy fellow at the Niskanen Center, in an email to The Hill.

Wolf said the GDP numbers in particular “show that the consumer is still spending and the chances of a deep recession is not around the corner, as so many economists have predicted.” 

But other Democrats acknowledge it will be a challenge for Biden, with constant talk about a recession and companies like Microsoft and Google laying off thousands of employees.

There are still plenty of obstacles ahead that could throw the U.S. economy off course and hamper Biden’s message.

The Fed’s aggressive rate hikes and plans to leave borrowing costs high have slowed the economy, and economists warn the U.S. has not yet felt the full impact.

Retail sales and consumer spending fell in November and December, according to federal data, a sign that Americans are finally buckling under the weight of high prices and rising rates. And while new claims for unemployment insurance remain below pre-pandemic levels, the mounting numbers of corporate layoffs are rattling both job-seekers and hiring managers alike.

“A lot of folks who are pessimistic about the economy have been saying that the next data pull will show things are going badly. They’ve been wrong every time so far. But they will eventually be right,” Darling said.

Financial markets are also rattled by uncertainty over whether Biden and House Republicans can strike a deal to avoid a default on the national debt. While standoffs over the federal debt limit aren’t new, an unprecedented default on the debt would likely cause a financial crisis and deep recession.

And even if the White House and GOP find common ground on the debt ceiling, Biden may find it difficult to get Republicans on board with stimulus if the economy slips into recession anyway.

“President Biden and all Democrats are going to have to find a way to talk about how big the economic wins have been,” one Democratic strategist said. “Sometimes it feels like we’re letting Republicans drown them out with their talk of a poor economy and high inflation but even that’s improving dramatically, and they need to find ways of talking about it every single day.”

The strategist and other Democrats say they are aware it won’t be easy if public sentiment is an indicator. An Associated Press-NORC Center for Public Affairs Research poll out last month, showed that only 25 percent of those surveyed say the country is headed in the right direction or the economy is in good condition.

Horowitz said it isn’t surprising Americans feel that way, given the uncertainty felt by the supply chain shortage, record high inflation and the war in Ukraine throughout 2022. 

“There were a lot of things that felt outside of their control,” Horowitz said, adding that some of those factors “are getting better.” 

Horowitz said he’s expecting a shift in the public’s sentiment about the economy in the coming months. 

“There’s a feeling right now that there’s a wind at our back, not in our face, and I hope that keeps up,” he said.