Expect several key reports on US economic health and consumer prices this week to provide some insight into the seriousness of the situation. The Federal Reserve is also expected to raise interest rates again on Wednesday in a bid to tame inflation, although some experts believe the Fed’s aggressive new strategy has come too late and risks tipping the economy into a tailspin. recession.
“But perception doesn’t always match reality, and Federal Reserve economists are as sensitive to capricious economic changes as you and I are. There are no hard and fast rules to follow; they make monetary policy by trial and mistakes. , and there were mistakes,” she continues.
“The Fed, much like Madonna, is constantly changing. This institution that aims to project an aura of stability is not beyond surprising.”
Meanwhile, amid all the attention on inflation eroding the strength of American paychecks, Goodkind notes that this week marks a sobering milestone for struggling American families: It makes 13 years since the last time the US federal minimum wage was raised, to $7.25 an hour. , making it the longest period without a raise since the enactment of the federal minimum wage in 1938. (About 30 states and Washington, D.C. have a minimum wage above the federal standard.)
That can’t help Biden in the face of dismal economic poll numbers. Just 18% of Americans in this CNN survey described the national economy as being in good shape, while 82% said economic conditions were poor.
Reacting to news earlier this month that inflation hit a new pandemic-era high in June, with US consumer prices jumping 9.1% year-on-year, the White House took advantage of a more recent drop in gasoline prices, while complaining that the price drop was not covered by the media with the same intensity that accompanied the price rise.
But public perceptions of the economy are not likely to change that quickly.
Even if this week’s data suggests the economy is not heading into a recession, it will still be a tough sell for the White House. Any president who says the economy isn’t really as bad as it seems to voters is in trouble.