JPMorgan Chase CEO Jamie Dimon stated that an economic hurricane is inevitable in the U.S. With companies downgrading their earnings forecasts and the country being in the middle of inflation and energy crises, things are looking grim. Even the stock markets have not been spared.
While many Americans do not have a positive outlook on the economy, 23% think the economic conditions are at least decent, according to an SSRS Poll for CNN.
With a looming economic disaster, President Biden wants to spread a positive message to citizens. He warns Americans that the economy will slow down but says they should not worry as the change is beneficial.
The president’s message may not be wrong, according to Wall Street investors and economists. Slow wages and job growth are considered great ways to ease fast inflation. The slowdown will also lessen the pressure on the Federal Reserve to increase interest rates even more rapidly.
Biden’s administration is taking a tall order to make the argument sound convincing to Americans struggling with higher prices and uncertain about their future. Initially, the White House agreed with Jerome Powell, the Fed Chair, that the current inflation run, a four-decade high of over 8%, was only a passing wind that would fade. However, the administration may have been wrong.
A Decrease in Job Growth
In May, more jobs were added than Wall Street expected, for a gain of 390,000. Anything exceptionally higher or lower in the next few months will likely cause restlessness among investors.
Things are tough for the White House as the administration tries to alleviate concerns looming around inflation and the economy. Biden is trying his best to convince his people, as evidenced by his Wall Street Journal op-ed. He wrote that signs of slowing job growth indicate that the U.S. economy is successfully moving into its next step of economic recovery. According to President Biden, that process requires slowing job creation, as opposed to when the economy started bouncing back from the COVID-19 pandemic, and creating new jobs was a priority. He stated that just as the post-pandemic slowdown was unique, the recovery will be, too. The White House is working with the Treasury Department to help Janet Yellen, the Treasury Secretary, make the case that a slow in the economic data could be a good thing.