Here's What You Need to Remember: Not all the estimates were off, though; consumer spending increased by 0.5 percent, as predicted. Core personal consumption expenditures, excluding food and energy, rose 0.7 percent from March and 3.1 percent from April 2020 – roughly in line with the 0.6 percent and 2.9 percent that analysts had predicted.
The defining challenge of Joe Biden’s presidency, at least in his first term, will be in his ability to preside over and guide America’s recovery from the COVID-19 pandemic.
Discontent over the Trump administration’s seemingly inconsistent approach to safety precautions and health advice was a major theme of Biden’s campaign; implicit in the current president’s appeals was the notion that he would be able to better preside over the recovery than his predecessor.
So how is Biden doing?
On some measures, the new president is exceeding expectations. After a campaign promise to issue one hundred million vaccinations within the first one hundred days of his presidency, Biden managed to achieve double this goal. Pundits have debated how much credit goes to Biden and how much he owes to the Trump administration’s “Operation Warp Speed,” but it is clear that the achievement is one that Biden sees as a vindication of his early strategy.
On other metrics, however, Biden has less to be proud of. Recent economic news, in particular, is troubling. A jobs report from the Department of Labor gloomily noted that the U.S. had only added 266,000 new jobs in April – vastly below projections of up to one million from Dow Jones estimates. The unemployment rate also rose to 6.1 percent, higher than the projected 5.8 percent.
More recently, the U.S. Bureau of Economic Analysis reported that personal income decreased by $3.2 trillion in April, a decrease of 13.1 from March. This was down from an increase of 20.9 percent from February to March.
Not all the estimates were off, though; consumer spending increased by 0.5 percent, as predicted. Core personal consumption expenditures, excluding food and energy, rose 0.7 percent from March and 3.1 percent from April 2020 – roughly in line with the 0.6 percent and 2.9 percent that analysts had predicted.
Why did this happen? The single most obvious answer, it seems, has been from the influence of stimulus checks. All Americans making less than $75,000 per year qualified for one of these checks, and the majority were sent out by the end of March – while some arrived significantly earlier, due to the IRS’s encouragement of direct deposit. The checks fueled a spending boom which helped to stimulate the economy; however, it also led to inflation, reducing real income.
What happens next? The dire April report suggests that the economic recovery has a long way to continue. The uptick in unemployment represents a new challenge for the Biden administration, and a moral vindication for Republican state governors who oppose federal unemployment insurance on the basis that it de-incentivizes employment. But, as more Americans are vaccinated and return to work, the recovery will continue.
Trevor Filseth is a news reporter and writer for the National Interest. This article first appeared earlier this year.