Why Biden says the US economy has ‘entered a new phase’: White House’s Bernstein

After President Joe Biden said the Federal Reserve’s rate cut marks “a new phase of our economy,” White House Council of Economic Advisers chair Jared Bernstein joined Market Domination anchors Julie Hyman and Josh Lipton to discuss how the administration is viewing the US economy during the rate-cutting cycle. Bernstein echoes Fed chair Jerome Powell’s language, saying the job market remains “solid,” noting, “We have an unemployment rate that’s historically still quite low, 4.2%, and the pace of job gains, while it’s definitely slowed, is still at a rate that’s associated with, maybe the lower end, of what we think of as the break-even rate, meaning the number of jobs you need to keep the unemployment rate pretty stable.” He adds, “We see healthy developments in those critically important sectors. GDP growth has come in above trend. Consumer spending remains strong. Real wages and incomes are growing. And that’s a real wind in the sails of the American consumer, as well as some breathing room for households.” When asked about the negative perception of the economy during the Biden administration, Bernstein says it reflects “an interesting dynamic” where the “majority of people say that their financial condition is pretty good, even that of their town or their state is pretty good, but that of the overall economy is less good, and I think that speaks to some of the general nervousness about where things are headed politically.” Bernstein says “The key point here is that under this administration, and certainly the Fed has played a role, we’ve seen not just lower inflation, not just disinflation, but we’ve seen disinflation in the context of a much stronger economy than almost anyone expected.”
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