Congressional Democrats got some good economic news Thursday amid 40-year high inflation, but it likely comes too late to benefit the party ahead of the November midterm elections.
The Commerce Department reported that gross domestic product, the broadest measure of goods and services produced in the economy, grew by 2.6% over the last three months. The numbers show a rebound after the economy shrank in the first six months of this year.
Some Democrats are optimistic the new economic numbers will give them a boost at the polls, but political strategists don’t believe it will matter.
“The overwhelming majority of voters don’t know the difference between the GDP, the NFL’s AFC East and the rapper DOC,” said Colin Strother, a Democratic strategist who has run several high-profile campaigns. “Telling a single mother or retiree who sees prices going up every month that some macroeconomic indicator says everything is OK will not get you very far.”
US GDP GROWS 2.6% IN THE THIRD QUARTER, BUT RECESSION FEARS LINGER
Democrats are optimistic the new GDP numbers show voters their stewardship of the White House and Congress has been a success.
(Anna Moneymaker/Getty Images)
Others agreed that GDP is not something tangible Democrats can point to on the campaign trail to prove their policies are benefiting the economy.
“It’s good news for Biden and Democrats, but does it move the needle?” asked Mike Madrid, a consultant who advises candidates from both political parties and helped found the Never-Trump Lincoln Project. “It’s not like lower gas prices or tax cuts that put more money into your pocket.”
Strother said the news comes too late to properly educate voters given there are less than two weeks until Election Day.
“While there are a number of metrics that could sink an election, there are not a lot that can win an election … less than two weeks out,” he said. “This news is so nuanced and so late that it is unlikely to have much of an impact.”
Economists add that while the economy grew over the past three months, most of the uptick came from foreign trade and government spending. Consumer spending grew just 1.4% over the same period.
Republicans have claimed for months that President Biden’s policies are pushing the country into a recession.
(Andrew Spear/Getty Images)
Financial experts expect that spending to slow even more in the coming months as the Federal Reserve continues to hike interest rates to tame inflation. The hikes have already led to a plunge in the housing market by driving interest rates for a fixed 30-year mortgage above 7% for the first time in two decades.
“Excluding the more volatile categories, the trajectory for growth looks weak,” said Jeffrey Roach, chief economist at LPL Financial. “A deteriorating housing market, nagging inflation and an aggressive Federal Reserve put the economy on an unsure footing for 2023.”
Republicans contend that the economy under Biden and Democrats is by no means healthy. In making the argument, they cite the 8.2% inflation rate that has driven up the cost of living while shrinking the value of American paychecks.
“Working-class families, who are already in dire financial straits due to the president’s inflation crisis, are continuing to suffer under the economic policies of one-party Democrat rule,” said Rep. Jason Smith, R-Mo. “Inflation is 13.9% higher today than when Joe Biden took office.”
Republicans say the economy is not healthy, pointing to the 8.2% inflation rate that has driven up the cost of living.
(Nicholas Kamm/AFP via Getty Images)
Still, the GDP number gave Democrats a rare economic positive to grab onto as Election Day approaches.
“This data is direct evidence that Democrats are getting our economy back on track,” said Illinois Rep. Cheri Bustos, a member of Speaker Nancy Pelosi’s Democratic leadership team.
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“Republicans are desperately trying to convince you we’re in a recession,” said Rep. Gerry Connolly, D-Va. “But the truth is our economy is growing, with a 2.6% increase in GDP during the third quarter [of] this year. Republicans lie. The numbers don’t.”
Fox Businsess’ Megan Henney contributed to this report.