ICYMI: Biden vows to ‘bring inflation down’ in new op-ed
President Joe Biden Monday published a Wall Street Journal op-ed outlining a plan to both lower costs for American consumers and tackle looming inflation concerns. Citing a multitude of challenges including the ongoing war between Ukraine and Russia and the still recovering supply chain constraints, Biden urged readers to have confidence in the U.S.’s ability to overcome economic challenges.
“I ran for president because I was tired of the so-called trickle-down economy. We now have a chance to build on a historic recovery with an economy that works for working families,” wrote Biden. “The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down.
Biden, who also pointed out the administration’s latest initiatives to counter economic challenges, met with Federal Reserve Chairman Jerome Powell yesterday. In anticipation of the May Jobs Report set for release this Friday, Biden also pointed out that growth during this transition period will look different, stating that there will likely be “fewer record job-creation numbers, but this won’t be cause for concern.”
Of note, the Federal Reserve is also set to release its Beige Book report – a Fed publication on current economic conditions across 12 districts – this week. In the last Beige Book report, the Fed revealed that economic activity expanded at a moderate pace since the middle of February; however, consumer spending accelerated in retail and non-financial service firms as COVID-19 cases tapered across the country.
NAFCU has been monitoring key economic indicators, from auto sales to the latest from the Federal Open Markets Committee (FOMC), to keep credit unions and their members informed on the shifting economic landscape. Here are some of the latest updates:
- FOMC minutes reveal likelihood of a 50-basis point rate hike: The FOMC released minutes from its May meeting which revealed that although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Participants also indicated the 50 basis point increases in the target range would likely be appropriate in the next couple of meetings.
- CPI climbs in April: In the latest consumer price index (CPI) Macro Data Flash report, NAFCU Chief Economist and Vice President of Research Curt long cited that inflation slowed year-over-year price growth to 8.2 percent, largely due to energy prices which fell 2.7 during April.
- Household debt increases as consumer sentiment dips: NAFCU reviewed the Federal Reserve Bank of New York’s Center for Microeconomic Data’s newly issued Quarterly Report on Household Debt and Credit, which showed that balances now stand $1.7 trillion higher than at the end of 2019, prior to the pandemic. The report attributes this steep upshot primarily due to mortgage and auto balance increases. Conversely, as mortgage balances increased, consumer sentiment toward housing dropped 4.7 percentage points to 68.5 in April, its lowest level since May 2020.
- The Commerce Department shows GDP contracted in Q1 of 2022: The Commerce Department Thursday released its first estimate of economic activity for the first quarter of 2022, which showed that the U.S. economy contracted by 1.4 percent, the first contraction since Q2 2020 – the figure was later revised to s/b -1.2 percent. Long mainly attributed this quarter’s contraction, which fell below even the lowest expectations of forecasters, to inventory build and trade.
Stay tuned to NAFCU Today for the latest on inflation and the economy.
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