August 07, 2024
CNN’s coverage of the economy under President Biden has been unrelentingly negative, even as we have seen the longest stretch of below 4.0 percent unemployment in more than 70 years, the fastest pace of real wage growth for low-paid workers in decades, the highest measure of job satisfaction ever, and a huge surge in new business openings. Today it pontificated on who should get blamed for an economic slump that has not happened.
It ran a piece headlined “Here’s who to blame — and who not to blame — for the slumping U.S. economy.” On the blame side, it tells us overspending by politicians (no names) is responsible. On the who not to blame side, we’re told it is the Fed, because it has to do clean-up duty.
The division of blame can be questioned. As many of us have argued, the Fed could have started lowering rates earlier this year or even last year and still seen inflation moving towards its 2.0 percent target.
More importantly, we are not currently seeing a slump. The second quarter’s growth was considerably higher than what most economists view as the sustainable pace for the US economy. Early projections for the third quarter show growth coming in strong again, a 2.9 percent rate as of August 7th.
CNN has for some reason chosen to highlight a slump that does not exist. It is of course possible that the US economy could go into recession. The July jobs report was weaker than most of us expected, but the economy still added 114,000 jobs and the employment to population ratio for prime-age workers (ages 25 to 54) hit its highest level in more than two decades. These are not typical features of a recession.
It is a bit strange that a major news outlet is devoting space to allocate blame for a slump that does not yet exist.
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