June 23, 2024

The Catholic Transcript

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US: Biden's economic agenda threatened by continued rise in inflation

US: Biden’s economic agenda threatened by continued rise in inflation

US President Joe Biden has been inaugurated with a series of economic plans to better position the country to compete on the world stage and boost the job market devastated by the epidemic. Ten months later, the Democrats face a new economic challenge.

Number of Americans seeking unemployment insurance Has dropped to a level not seen in 52 years Over the past week, available jobs have been approaching record levels and consumer spending is on the rise. But these positive economic developments are compounded by disruptions in the supply chain and three decades of high inflation.

Now Biden is racing to show the public that he is working to address price rises and hurdles, amid growing concerns among some of his advisers about the political downturn ahead of next year’s midterm elections.

The president has instructed his senior economic advisers to focus on issues, White House officials say, and set up an internal task force to monitor granular data such as how many containers are parked in the country’s ports and how long they have been there.

According to economists and external analysts, Biden Management has limited options to reduce inflation and ensure that products are delivered on time. Many economists are skeptical that the White House’s continued efforts, including to free up oil reserves and encourage ports to operate longer, could significantly change the course of short-term inflation.

Josh Beavens, director of research at the left-wing Economic Policy Institute, said “they do not have any fantastic policy tools at their disposal to deal with the drivers of high inflation.”

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There are many reasons for the rise in inflation. The delta variant of the corona virus has long-standing imbalances that the White House and many economists hope to alleviate. Factories and ports abroad were closed, restricting the supply of goods when Americans had money to spend. Meanwhile, many Americans are reluctant to return to work, while others face constant restrictions on childcare, leading to labor shortages.

Very low interest rates reflect the policy of the Federal Reserve (Fed) and contribute to the widening demand for multi-round government incentives. Strong demand and limited supply is a recipe for inflation.