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Biden's economic speech omits jobless rate jump, which Fed predicted due to its interest rate hikes

Biden painted a rosy picture of the U.S. economy, saying inflation is going down after the Fed raised interest rates to their highest level in over 22 years. That picture leaves out some key facts, some even brought up by his own administration.

Published: September 2, 2023 11:07pm

Heading into the Labor Day holiday, President Joe Biden's August jobs speech on Friday omitted that the unemployment rate increased in August, which the Federal Reserve had  predicted would occur because of consistent hikes in interest rates.

The unemployment rate rose from 3.5% in July to 3.8% in August, which is the largest single month jump since May. 

Biden painted a rosy picture of the overall U.S. economy during his speech, saying inflation is going down, while the latest data indicates that prices are still high at 3.2%. CBS News reported that July's 3.2% inflation rate represents the "first increase after 12 consecutive months of cooling prices."

Biden's speech comes after the Fed raised interest rates on July 26 for the 7th consecutive time to their highest level in more than 22 years, CNBC reported.

Ignoring gloomy economic indicators stated by his own administration, Biden said "Today we have the strongest economy in the world." 

According to a PBS report in June, the Fed "projected that its rate hikes will weaken the economy and raise unemployment, as well as lower inflation."

A Time magazine report from February also laid out in detail why the Fed has been intentionally trying to slow job growth to get inflation under control. Biden obliquely referenced the Fed's actions during his speech.

"Remember, some experts said to get inflation under control we needed higher unemployment and lower wages.  But I’ve never thought that was the problem: too many people having a job or that working people were making too much money," he said.

"And now, months — after months and months of bringing inflation down, while at the same time adding jobs and growing wages, it matters.  And it’s no accident," he added.

Biden didn't take questions from reporters after the speech. Some reporters shouted, "Why are so many people living paycheck to paycheck, sir?" In July of this year, Vice President Kamala Harris said that "Most Americans are a $400 unexpected expense away from bankruptcy.” 

The White House later had to correct one of Biden's unemployment rate statistics in its official transcript of the speech by crossing out 14 and replacing it with 4 in the excerpt below:

"What’s more, when I took office, the unemployment rate was 6.3 percent.  The nonpartisan Congressional Budget Office predicted that it would not get below 4 percent until the end of 2025," Biden said. "Now, unemployment — the unemployment rate has been below 14 [4] percent for the last 19 months, the longest stretch in over 50 years," he added, according to the published transcript.

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