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Biden makes a case for his economic leadership: low unemployment, growing economy

STEVE INSKEEP, HOST:

Today, President Biden makes a case for his economic leadership. He speaks in Chicago. Unemployment is low. The economy is growing. But in surveys, voters disapprove of the president's economic management. He's now using a term to sum up his approach.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT JOE BIDEN: So we're changing it. We decided to replace this theory with what the press has now called Bidenomics. I don't know what the hell that is. But it's working.

INSKEEP: The White House now uses that label for its policies. We talked with Biden's top economic adviser, Jared Bernstein.

I was looking at this Pew Research survey, and they had a sentence. While Americans views of current economic conditions continue to be largely negative, their outlook for the future has worsened. There's a kind of double-negative quality to that. It's cold, but at least it's rainy. People have had negative views of the economy for a long time. Why are people so dissatisfied?

JARED BERNSTEIN: A lot of it depends on how you ask the question, Steve. I mean, if you ask broad questions, one of the problems you find these days is you immediately tap into a deep well of partisanship. Bidenomics is actually about getting things that are pretty granular done, building the economy from the bottom up and the middle out in a way that we know actually resonate strongly with people. You find numbers like 76% of voters say they support the bipartisan infrastructure initiative to invest in highways, to expand broadband internet. Seventy-two percent of voters say they support the CHIPS and Science Act, which strengthens supply chains and stands up domestic manufacturing of semiconductors. So I think you get a very different set of results when you actually ask about the specifics of Bidenomics.

INSKEEP: What are some of the long-term problems or distortions in the economy that you think are real and that you're trying to address?

BERNSTEIN: One is the sharp increase in inequality. Two is decades of disinvestment in communities and towns and public goods. And three is the absence of competition, a concentration in some of our most important industries, whether it's technology or health care - industries that drive up costs for American consumers, reversing each one of those long-term negative trends.

INSKEEP: You alluded to low unemployment, which is certainly true. There's another key figure here, which is labor force participation, which I'll explain for laymen. That's just the percentage of people who are out there in the country who are working or not. Labor force participation has been increasing during this administration, has been recovering from the depths of the pandemic, but it is also historically much lower than it was 15 or 20 years ago. Is that a problem?

BERNSTEIN: In fact, labor force participation of working-age people is back to where it was 15 years ago. And that's not a problem. That's a good thing. And, in fact, one of the things we see happening is that this persistently tight labor market is pulling people in off the sidelines. And that's very important.

INSKEEP: I don't want to argue with an economist about statistics because maybe you're looking at different chart than I am, but I'm looking at data from the Saint Louis Fed showing that 15 years ago, the labor force participation rate was over 66%, and now it's down around 62, a little more than 62. It hasn't recovered.

BERNSTEIN: Yeah, no. That's correct. So this is - I wanted to avoid going in the weeds, but you're forcing me to do so, which - it's fine. I appreciate it. One of the things we have in our labor market is older people, like me, aging out of the job market, so the boomers. So in order to take that, you want to take retirees kind of out of the mix when you judge your labor force progress. And to do that, we look at working-age people, 25- to 54-year-olds. That's just a nice way to control for the fact that we have an aging society. Take out some of the older workers, and you have the working-age labor force participation rate at a 15-year high. And if you're looking at women, it recently hit the highest it's been on record.

INSKEEP: Do you expect a recession in the next year?

BERNSTEIN: The way I assess that from here at the Council of Economic Advisers is that it's just very tough to look around corners. And forecasters have gotten this wrong consistently. I think that many people keep saying we're in a recession; we're going to be in a recession. If you look at the indicators of recession, they're just not there. And, you know, a recession is not a function of bad vibes or whatever entrails somebody happens to be looking at. It's a function of a set of variables that economists evaluate. And none of those variables is flashing recession. So the fact is we are not in a recession, and the economy, particularly the job market, I think it has solid momentum.

INSKEEP: Do you assume that inflation, which was quite high a year ago, is going to continue drifting down?

BERNSTEIN: Well, certainly the trend has been favorable. And when you have a variable like inflation year over year falling 11 months in a row, you know, that trend is your friend. And we expect that to continue, but we don't take it for granted.

INSKEEP: Jared Bernstein, it's a pleasure talking with you. Thank you so much.

BERNSTEIN: My pleasure, Steve. Take care. Transcript provided by NPR, Copyright NPR.

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