Ways and Means Republican Leader Kevin Brady (R-TX) issued the following statement on the Bureau of Economic Analysis’s (BEA) report that U.S. economic growth fell far short of expert forecasts:
“For the second straight quarter, President Biden’s economy has failed to meet expectations and growth is downhill from here.
“Added to rising prices on families, sagging economic optimism, and a nearly 700,000 jobs deficit from the President’s own projections, this is another troubling sign the Biden Administration is off track.”
Experts had forecast the annual rate of gross domestic product (GDP) could go higher than 9 percent. The report instead showed that the rate was 6.4 percent.
GDP is falling short on Biden’s watch
- Biden fell short of his own favored economic forecast, Moody’s, which predicted 6.4 percent growth and 9.6 percent growth for the first and second quarters of 2021—in reality, actual GDP growth for these quarters was 6.3 percent and 6.5 percent. We only reached the target for the first quarter three months later.
- From the Wall Street Journal: “Second-quarter growth fell short of economists’ forecasts. Economists surveyed by The Wall Street Journal estimated that gross domestic product, the broadest measure of goods and services made in the U.S., grew at an 8.4 percent annual rate in the April-to-June period.” It only grew at a 6.5 percent annual rate.
Biden has broken his jobs promises
- President Biden fell nearly 700,000 jobs short of his jobs promise for the second quarter.
- Federal Reserve Chairman Jerome Powell admitted that the unemployment bonus (extended in President Biden’s $1.9 trillion stimulus) that pays more Americans to stay at home than go to work has contributed to a lackluster jobs recovery.
- Appearing before Ways and Means, Treasury Secretary Janet Yellen also admitted that the unemployment bonus is likely discouraging work, saying that “it’s a significant issue.”
Inflation is growing and could go even higher
- Major measures of inflation increased at rates unseen since the early 1980’s. Inflation increased 6.4 percent according to the PCE Price index, and the less volatile Core PCE Price index (which excludes volatile energy and food prices) is up 6.1 percent.
- Working American families are likely to see even higher prices as pent up demand depleted many goods from the inventories of businesses–without more supply, higher prices are likely to follow.
Incomes are dropping
- Real disposable personal income decreased more than 30 percent.
- The personal saving rate dropped to 10.9 percent, close to pre-pandemic levels.
- With less excess savings (and lower income), consumers are less likely to spend—and with 70 percent of GDP being consumer spending, that means slower growth.
President Biden’s economic agenda spends more to get even less
- According to Moody’s, President Biden’s $6 trillion plan spends $2.3 million per new job created over 10 years.