Morning Consult released the results of a survey this week, which showed nearly half of U.S. adults believe the national economy is currently in a recession. The evidence to the contrary is simply overwhelming.
Not only is the country seeing robust job growth — the unemployment rate recently fell to a 50-year low — but the economy continues to grow at a solid pace, even as it exceeds expectations. CNBC reported this morning:
The U.S. economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead. Fourth-quarter gross domestic product, the sum of all goods and services produced for the October-to-December period, rose at a 2.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had expected a reading of 2.8%.
For the entirety of 2022 calendar year, the economy grew at a 2.1% pace, which is roughly in line with the GDP data we saw during much of Donald Trump’s presidency, when the Republican repeatedly told the public that Americans were experiencing the greatest economic conditions in the history of humanity.
This is also a welcome turnaround: In the first six months of 2022, the economy contracted slightly, fueling talk of a possible recession. We now know the GDP rate bounced back in the latter half of the year.
To be sure, economic growth in President Joe Biden’s first year in office reached a 37-year high, and last year’s growth wasn’t nearly as strong. But all of this was entirely predictable: GDP data in 2021 reflected the bounce back from the Covid-fueled recession in 2020. No one seriously expected the economy to maintain that kind of pace, especially as the Federal Reserve hit the brakes with a series of interest-rate hikes.
As for the larger political picture, Politico’s report on the new data added:
[GDP growth is] good for [Biden]. At least for now. The Fed raised interest rates seven times last year to above 4 percent from near-zero levels during the pandemic. Inflation cooled but remains elevated. And the economy still managed to stay afloat. “This economy is resilient,” said Joseph Brusuelas, chief economist at consulting firm RSM US. “And the White House can reasonably take some credit here and run a nice big victory lap.”
The Washington Post’s Heather Long added that economic problems persist, including inflation and poverty rates, the latter of which grew after federal aid lapsed. “But to recover all jobs and output in basically two years is remarkable,” Long concluded.