The resiliency of the US economy is defying expectations — and the odds of a “soft landing” are improving, said Lael Brainard, President Joe Biden’s top economic adviser, on Wednesday afternoon.
New data from the Labor Department released earlier in the day showed that inflation rose last month by 3%, its slowest pace since March 2021. The news pushed markets higher, and Biden touted it as “Bidenomics in action.”
“The US is defying expectations that inflation wouldn’t fall absent significant job destruction,” said Brainard, head of the National Economic Council, in a speech at the Economic Club of New York. “Just today, we saw new and encouraging evidence that the US economy is on the path to moderate inflation accompanied by a resilient job market.”
The strength of the US job market has been “a surprise to so many forecasters who really didn’t see that [there would be a] rebound in participation,” she said.
The latest jobs report showed that 209,000 jobs were added in June, and the unemployment rate ticked down to 3.6%, a historic low.
“We’ve seen these repeated predictions that recession is right around the corner — and the data have instead delivered continued resilience in the economy,” said Brainard, formerly No. 2 at the Federal Reserve.
Brainard said that much of this economic strength is due to Bidenomics. That’s the president’s economic theory that rejects the idea of “trickle-down” policies in favor of focusing on the middle class. Bidenomics will be a centerpiece of Biden’s 2024 reelection campaign.
“This economy is delivering strong results for America’s middle class — creating good jobs and yielding real income gains, especially for workers whose earnings have too often not kept up. These economic gains did not happen by chance, and they will not be sustained absent a deliberate strategy,” she said. “President Biden’s economic strategy aims to grow the economy from the middle out and bottom up — not the top down.”