In a 58-page report hailing himself for the “strongest economic recovery in modern history,” Joe Biden has made an odd lap of honour.
The President claimed that during the last two years, his “bold and decisive” actions had been the driving force behind “substantial development.”
In his economic strategy, he makes claims that the nation as a whole has seen increases in employment and wages.
However, given that Americans are struggling with crushing inflation, a cost of living crisis, and a failing economy, the statements have raised some eyebrows.
The report highlights employment and income growth as the country recovers from epidemic losses, but it makes no mention of record inflation, which touched 9.1% in June and 8.5 in July and has been a primary worry for both Americans and Biden and senior economic officials.
“Democrat Tim Ryan’s focus, apart from rubber-stamping Biden’s failing programme, is prohibiting gasoline-powered cars,” RNC chairwoman Ronn McDaniel said of Biden’s trip when the report was released.
“Biden’s agenda has destroyed Ohio families and small companies.” Ohio is prepared to elect a leader like J.D. Vance in November, and voters will make sure that Tim Ryan, a Biden-Democrat, is nowhere near the Senate.
In a section on immigration, new initiatives to simplify work visas are mentioned, but the surge in illegal immigration that has become a key Biden weakness is glossed over. As an alternative, it highlights the need for “comprehensive immigration reform.”
The strategy, which starts off budget season in Congress, states that “President Biden’s economic programme created the basis for the greatest and most equitable economic recovery in modern history—with over 9.7 million jobs and the fastest decrease in unemployment rate on record, to 3.7 percent.”
Charts indicating a sharp decline in unemployment are interspersed throughout the paper with platitudes about economic success.
But it adds that “President Biden’s economic policy” aims to “guarantee an economy that works for working people” by bringing about both a historic rebound and “deeper, permanent change.”
Looking forward, bringing down inflation without sacrificing the significant success we’ve achieved for American workers is the President’s near-term focus in terms of the job market.
The statement states that “lower inflation and a healthy job market will provide the conditions for sustained growth in real earnings across the income distribution.”
Numerous fathers of the inflation crunch are mentioned in the paper.
According to the report, “the unprecedented global economic shutdown and restart caused by the pandemic led to supply and demand mismatches that, together with higher energy and food prices brought on by the war in Ukraine, have driven significant global inflation, including here in the United States.”
In order to assist our economy go from a historically strong rebound to sustained, steady growth, President Biden’s top economic objective today is cutting inflation and family expenses.
‘My first two years in office fostered the biggest economic rebound in recent history,’ Biden said in a tweet.
Today, I’m publishing my Economic Blueprint, which examines how our victories are reviving an economy that benefits working people.
In a speech delivered on Thursday in Michigan, Yellen said, “Our plan has succeeded.”
By any conventional criterion, she said, “We have had one of the fastest economic recoveries in recent history.”
She also mentioned the fact that inflation is at 40-year highs.
The most pressing problem, according to her, is to restore a climate of stable pricing without compromising the economic achievements made over the last two years.
“We must maintain healthy public finances to safeguard our long-term economic stability,” she stated. Estimates of the expenses associated with Biden’s new student loan debt relief proposal range substantially, despite the fact that the Inflation Reduction Act is expected to cut the deficit.
The document’s upbeat tone coincides with the administration’s efforts to tout its successes as it prepares for the November elections, without erasing the worries Americans have expressed about a recession and high inflation in opinion surveys.
It notes that after Biden took a number of steps, gas prices fell by more than $1.20.
No group of people, regardless of race or ethnicity, should be left behind. Everyone gains from economic progress when it is driven from the centre out and from the bottom up, the report claims.
Despite edging down from record highs in July, median house prices are still up 10.8% from a year earlier due to a lack of available homes, according to the NAR.
Compared to a year ago, purchasing a house is now significantly less affordable due to rising prices and rapidly rising borrowing rates.
According to Evangelou, who was responding to the most recent rate statistics, “buyers presently need to spend 10% more of their budget for their mortgage payment if they want to purchase the median-priced property” compared to last year. However, borrowing costs have climbed faster than people’s incomes.
According to her, “These higher mortgage rates have already had an effect on activity in the housing market,” pushing house sales activity in July by 14 percentage points rather than the typical 6 percent decline from June to July.
Mortgage rates closely resemble yields on the 10-year US Treasury, which this week reached their highest level since June as solid economic data suggested that the Fed, which is attempting to control inflation without causing the economy to implode, will continue to raise jumbo rates.
At its meeting in late September, the Fed is predicted to increase rates by an additional 75 basis points, bringing the fed funds rate from near zero in March to 3.25 percent.
The quantity of house sales has been significantly reduced by increased mortgage rates, but the national inventory is still very low by historical standards, and prices have not yet fallen much across the board.
The national median sales price for July was $403,800, which was down slightly from the record-high set a month earlier but still a rise of 10.8% from a year ago, according to the NAR.
However, there are more and more indications that certain regions, particularly those on the West Coast, where housing values have increased the greatest, may be in for a more severe correction.
In its most recent monthly mortgage report, released this week, mortgage analytics company Black Knight noted a statewide decline in median house prices of 0.77 percent between June and July, the worst month-over-month decline since January 2011.
More than 85% of the largest housing markets in America are at least marginally off their peaks, and more than 10% — largely along the West Coast — are seeing price declines of at least 4%.
According to the company’s president Ben Graboske, the 31 straight months of price increases ended in July. He issued a warning that the real estate industry was known for its “volatility and quick change.”
San Jose, a centre for technology in California, has seen the largest drop in values, with properties there losing 10% of their value from three months ago when they peaked.
Over the same time period, Seattle (7.7%), San Francisco (7.4%), San Diego (5.6%), Los Angeles (4.3%), and Denver (4.2%) also saw sharp drops in prices from their peaks.
Researchers found that a further 5% decline in national house values would cause 275,000 borrowers and 0.9 percent of homeowners to go into negative equity, or when the amount owed exceeds the property’s fair market worth.
The survey found that national median house prices are 14.5 percent more than they were a year ago, which is three times greater than the historical norm, despite the monthly reductions.
During the same time span, Seattle (7.7%), San Francisco (7.4%), San Diego (5.6%), Los Angeles (4.3%), and Denver (4.2%) also had severe drops.
People are reportedly leaving West Coast urban regions owing to a variety of reasons, including high crime rates, taxation, and environmental problems like drought and wildfires. As a result, there are a lot of homes on the market, which is causing property values to decline.
As the epidemic subsides, technology companies with headquarters along the western shore are also leading the way in allowing staff to continue working from home, relieving many of those people of the requirement to reside nearby their workplace.
For the thousands of buyers who made their purchases at the market’s apex in the first half of 2022 and are now seeing price declines due to rising mortgage rates, the research had bleak predictions.
Despite a recent rise in mortgage rates, prices have decreased. According to the federal government’s lending firm, Freddie Mac, the interest rate on a 30-year fixed-rate mortgage presently stands at 5.66 percent, an increase of over three percentage points from the same time last year.
In an effort to control inflation, the Federal Reserve plans to increase interest rates this month by an additional 0.75 percentage point.
Researchers found that a further 5 percent decrease in house values would cause 275,000 borrowers and 0.9 percent of homeowners to go into negative equity, or when the amount owed exceeds the property’s fair market worth.
However, the housing market was coming off long-term highs and was “in a great position to sustain such price falls,” according to academics.
The report noted that such price reductions “wouldn’t be felt uniformly throughout the nation, as we’ve already seen, and would be concentrated in select regions – notably the western coast of the U.S.”
Even so, concerned property owners have expressed their worries about sinking on social media. Interest rate increases, according to one user, are “devastating to young families” who have just lately been able to climb the housing ladder.
Another asked how many borrowers would “be underwater soon” as a result of declining home values and increasing interest rates, while another expressed concern that things would “be like 2008 all over again” with a market crash, defaults, and evictions.
Goldman Sachs economists recently issued a warning that weakening demand and an abundance of available homes were projected to cause a house price rise in the United States to totally stop next year.
The head economist for Moody’s Analytics, Mark Zandi, issued a warning last month, stating that certain areas of the country’s values were up to 72 percent overpriced and that if there is a recession, home prices may fall by as much as 20 percent the next year.