Press Release - President Biden's Economic Plan is Working

America is on the move, and we see the signs of that across our economy. There has been historic job growth since President Biden took office – more than 2 million jobs created, and a monthly average of 540,000 new jobs – the most in any President's first four months. The average number of new unemployment claims has been cut in half since President Biden took office. And, independent projections from the Federal Reserve, the World Bank, the OECD, and many others all forecast America this year reaching the highest levels of growth in nearly four decades.

Over the past week, we have seen continued evidence that President Biden's economic plan is working.

• The Federal Reserve revised up its 2021 projection for growth to 7 percent compared to 5 percent last year at this time and revised down its 2021 projection for the unemployment rate to 4.5 percent compared to 6.5 percent this time last year—a full 2 percentage point reduction.
• The four-week average for unemployment claims continues to decline and is now below 400,000 for the first time since March 2020.
• Retail sales in May were up 18 percent above the pre-pandemic February 2020 levels.
• Leading economists agree that inflation is transitory and that lawmakers should seize this once in a generation opportunity to invest in the nation's future.

The Federal Reserve's revised projections reaffirm that the President's economic plan is working and that the economy is back on track.

• The Fed revised its GDP growth projections for 2021 to 7 percent from 5 percent this time last year. This would be the fastest economic expansion since 1984 when Ronald Reagan was President.
• The Fed now projects that the unemployment will be 4.5 percent by the end of 2021. This is a full two percentage point drop from the Fed's projections a year ago, which anticipated a 6.5 percent unemployment rate in 2021.

Data released this week shows an economy that continues to strengthen.

• The four-week average of initial unemployment claims has declined yet again to 395,000. When President Biden took office, over 800,000 new unemployment claims were being filed every week on average. Data from this week shows that the four-week average is now below 400,000 for the first time since March 2020.
• Retail sales remain significantly higher than pre-pandemic levels. Total nominal retail sales in May were 18 percent above the pre-pandemic February 2020 levels. Restaurants and bar sales in May passed pre-pandemic spending levels for the first time – a significant milestone as that industry continues to recover from the public health emergency. Retail sales for clothing and clothing accessories stores were up 3 percent relative to April and up double from May 2020 levels.
• Leading Economic Indicators (LEI) have increased for the third straight month, and now exceed all-time pre-pandemic peak. The Leading Economic Index increased by 1.3 percent in May to 114.5. This marks the third consecutive month of increases, and follows a 1.3 percent increase in April and a 1.4 percent increase in March. The coincident economic index – a measure of current economic activity – also improved by 2 percent in May. The LEI is now above its previous peak reached in January 2020, showing that President Biden's economic recovery is working and suggesting economic growth will continue. The Conference Board is now forecasting that Q2 GDP growth could reach 9 percent, with year over year growth reaching 6.6 percent for 2021.

New data shows that rising price expectations are concentrated in pandemic-hit sectors and price pressures remain relatively moderate across much of the economy.

• A Morning Consult article released this week reported "While inflation expectations for the next 12 months rose in May, increases were heavily concentrated in COVID-impacted sectors, signaling an awareness of the current price environment by consumers. (…) Price spikes were most severe in areas where supply bottlenecks have also arisen (…) when you strip away these outliers, the Federal Reserve Bank of Cleveland's 'trimmed-mean' CPI shows a calmer 2.6% reading in May." In addition, Morning Consult's survey data found that "U.S. consumers still anticipate relatively stable prices over the next 12 months. (…) Even after all the media coverage of price increases over the past few months, between 42% and 58% of respondents still expect prices to stay the same or decline."

• The Associated Press reports the market appears to be backing the expectations that inflation will pass. The Associated Press reported that "financial markets appear to be backing Biden's case that any price increases are the fleeting result of the United States restarting after the lockdowns caused by the coronavirus pandemic." In addition, the article noted that "a measure of expected inflation known as 5y5y, which looks forward five years to investors' five-year inflation expectations" has been trading at a level "close to the Federal Reserve's 2% target." The article notes that, "inflation expectations – despite the recent bump in prices – are within the realm of expectations over the past 15 years."

All of this data reveals one main thing:

President Biden's economic plan is working -- plain and simple.