The US economy Kamala Harris inherits and how she may run on it
President Joe Biden aimed to bring unity and prosperity as he took office amidst a chaotic and uncertain time. Vice President Kamala Harris now inherits Biden’s promises to rebuild the middle class, invest in infrastructure, boost manufacturing, and lower healthcare costs. The US economy has seen positive developments, including strong GDP numbers and falling inflation rates. However, one of Harris’ challenges is addressing negative public sentiment towards the economy, particularly regarding rising prices. As the presidential race enters its final 100 days, here is an overview of the current economic landscape.
Inflation, Interest Rates, and a Resilient Economy
Since Biden’s term began, inflation surged to its highest level in over 40 years, but it has since cooled down. Despite this, consumer prices are still 20% higher compared to January 2021. The Federal Reserve’s interest rate hikes have slowed down the economy, but it has not fallen into a recession. Gross domestic product (GDP) figures indicate a solid performance in the first half of the year.
A White-Hot Job Market That Begins Cooling
After reaching its highest level since 1948 during the pandemic, the unemployment rate had already fallen at the start of Biden’s presidency, but it has risen above 4% recently. Cracks in the labor market have started to appear.
An Infrastructure Bill Finally Becomes Law
The bipartisan Infrastructure Investment and Jobs Act and the Inflation Reduction Act dedicate over $1.6 trillion to rebuild and modernize infrastructure. Although it will take time for the full effects to be realized, the economy has already experienced near-term impacts, such as growth in industrial facilities, electric vehicles, manufacturing jobs, and municipal projects.
A Boost for Clean Energy and Oil Production
Biden’s focus on clean energy includes substantial support for electric vehicles and charging stations. However, domestic oil production has reached record levels.
A Friend to Organized Labor
Biden’s support for organized labor has been notable, with the National Labor Relations Board frequently siding with unions and workers. Union membership and organizing have increased, resulting in significant pay hikes for union members. Nonetheless, concerns have been raised regarding unpopular contracts imposed on freight railroad unions.
Relief for Consumers, Families, and Seniors
The Biden administration has implemented measures to save consumers money, such as eliminating hidden fees and providing economic relief for families. The American Rescue Plan Act has temporarily reduced child poverty rates and capped insulin costs for Medicare enrollees. Additionally, student loan debt has been reduced for millions of Americans.
A Strong Agenda on Antitrust
The Biden administration has taken a regulatory crackdown approach on corporate giants, particularly in the tech industry, with a focus on curbing corporate dominance and addressing rising prices. However, some of the regulatory efforts have faced challenges and legal battles.
Mixed Record on the Tech Sector
Biden has taken a protectionist stance towards the tech industry, including signing a bill to ban a Chinese-owned app. Additionally, the administration has scrutinized mergers in the tech sector, leading to new guidelines aimed at blocking deals believed to be anticompetitive.
Record Highs for Stock Holders
Stock markets experienced various trends during Biden’s term, with fluctuations influenced by factors such as the pandemic, inflation, and monetary policies. The current year has seen repeated record highs, supported by strong corporate earnings and hopes for rate cuts.