Joe Biden wants the public to think the country is falling apart under President Donald Trump. COVID-19 is running rampant. The economy is in shambles. It’s all Trump’s fault.
“They’ve done nothing to help small businesses. Nothing. They’re closing,” Joe Biden said in the presidential debate on Tuesday. “He ought to get on the job and take care of the needs of the American people,” he said, referring to Trump.
But Biden will have to confront two major economic reports that both will provide very good news about the economic recovery from the pandemic shutdowns, which has been growing faster than economists had projected.
Both will come as surprises to a public that has been fed a steady diet of Democratic doom-and-gloom talking points.
On Friday, the Labor Department will release its September jobs report. The consensus among economists is that the economy created 850,000 jobs and that unemployment will drop to 8.2% from August’s 8.4%.
If that forecast holds up, it will mean the economy has created 11.5 million jobs in just five months – regaining more than half of the jobs lost during the shutdown.
Given that the jobs numbers have consistently come in better than economist projects, it won’t be surprising if unemployment falls below 8.2%.
Let’s compare. During the last recession, the economy shed had 8.7 million jobs when the job market bottomed out in February 2010 (even though the recession ended in June 2009).
It took more than two years for the economy to regain half those jobs, and more than four years before the job market reached its previous peak. And who was running things then? Barack Obama and Joe Biden.
Another way to look at it: An unemployment rate of 8.2% would be where it stood just before Obama won reelection.
It’s also way better than economists had forecast. Many were expecting the unemployment rate to remain in double digits through the end of the year.
The next October surprise will come on Oct. 29, when the Commerce Department reports growth for the third quarter of the year, which ended Wednesday.
That figure could be an eye-popping 32%.
That’s based on the last estimate from the Atlanta Federal Reserve Bank’s GDPNow, a running estimate of growth based on economic data available throughout the quarter.
The GDPNow data show that the economy gained strength as more data came in. The initial estimate made at the end of July was for GDP growth of 11%.
A 32% growth for Q3 would be far higher than the Blue Chip consensus forecast, which was below 20% in June, then steadily climbed to around 25%.
How likely is the GDPNow estimate to hold up? Its final forecast has historically been very close to the Commerce Department’s initial GDP estimate.
During Tuesday’s debate, moderator Chris Wallace admitted that “the economy is, I think it’s fair to say, recovering faster than expected from the shutdown.”
Why is this economic recovery exceeding expectations where the Obama-Biden recovery consistently fell below forecasts?
The Economist magazine managed to credit Trump (without saying as much, of course). It said that a big reason why the American economy is beating forecasts is the stimulus championed by Trump, which “has been potent.” And indeed, the stimulus was more targeted, faster, and smarter than past efforts to goose the economy – especially so when compared with the Obama-Biden “stimulus.”
Disposable income, for example, has risen since the pandemic began, and in early September those getting unemployment insurance were spending more than they did before the pandemic hit, the Economist reports.
The Obama-Biden stimulus, in contrast, slowly ploughed the money through government programs and its impact on jobs was so negligible that a new measure of success had to be created: counting jobs “created or saved.”
Biden’s $4 trillion economic plan is more of the same: direct all the money through government programs that will serve only to permanently expand the size and scope of government.
Will any of this good economic news get to voters trying to decide who should manage the economy for the next four years?
We can only hope so. But it won’t be through the mainstream press.
— Written by the I&I Editorial Board