It’s the inflation, stupid: Why a ‘vibecession’ is hurting Biden – despite an economy which is the envy of Europe
In the circumstances, the numbers could hardly look much better.
A year or two ago, the conventional wisdom was that America was facing a terrific recession.
Instead, according to the latest data from the International Monetary Fund, the US has outperformed pretty much every other major economy in the world (including China).
In its latest World Economic Outlook report – the most closely-watched set of international forecasts – it upgraded the US more than nearly every other major economy.
From a European perspective, there is much to be jealous of about America’s recent performance (most European nations, including the UK, saw the IMF downgrade their growth forecasts).
Yet here’s the puzzle. Despite this comparatively strong economy, despite having seen a lower peak in inflation than most European nations (especially the UK), American consumer confidence remains in the doldrums.
It’s not just Europeans who find this perplexing. So too does the White House.
The White House worries it’s not getting credit for the strength of the economy with voters. Pic: Reuters
They pumped cash into the manufacturing sector at the very moment it needed it, via a series of expensive programmes including the CHIPS Act (to bring semiconductor manufacturing back home) and the Inflation Reduction Act (to encourage green technology firms to set up factories in the US).
The idea was that from the depths of the pandemic, America would “build back better” – that Biden would emulate Franklin D Roosevelt and his New Deal of the 1930s.
And most conventional statistics suggest that strategy is bearing fruit. Manufacturing employment is rising; factories are being constructed at the fastest rate in modern history. And gross domestic product – the most comprehensive measure of output – is rising. Unlike in the UK or Germany, there was no recession.
So why, then, is consumer confidence so weak? Why are Biden’s approval ratings – the key polling benchmark for the US leader – lower than pretty much any of his predecessors at this stage in their terms?
Travel around Pennsylvania, as we have done over the past few days, and you encounter all sorts of explanations.
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It’s the inflation, stupid
Food banks are getting busier; and while some businesses are beginning to see that federal money trickling down, many of the programmes are still at the approval stage. The money hasn’t arrived yet.
But, above all else, you hear one recurrent answer: it’s the cost of living. It’s food prices, it’s gas prices, it’s rents.
And there’s also a big gap here between life through an economic prism and the life lived on Main Street in places like Bethlehem PA – an old steel town trying to reinvigorate its economy.
Talk to an economist and they’ll remind you that inflation – the rate at which prices are changing over the past year – is finally beginning to drop. But while this is statistically true, it misses a couple of pragmatic realities.
First, prices aren’t going down; they’re just rising a bit less quickly than they were before. The squeeze hasn’t gone away.
Second, while economists often fixate on the change in the consumer price index over the past year (3.5% in March), what the rest of the population notices is the change in prices over a longer period.
Over the past two years prices are up around 9%. Over three years, they’re up 18%.
In other words, the explanation for the “vibecesssion”, as economists have christened it (there’s no formal recession but the vibes feel bad), might actually be exceptionally simple: It’s the inflation, stupid.
Summing up what voters care about, an adviser to Bill Clinton once said ‘it’s the economy, stupid’ during a 1990s US election race. Pic: Reuters
In Pennsylvania, perhaps the most critical of all the swing states in the US, the question is whether Donald Trump can capitalise on this disaffection to win over the citizens who abandoned him last time around.
In the meantime, the Biden White House is biding its time, hoping that those New Deal economic textbooks they followed when pumping cash into the economy are really to be trusted.
Former US president Joe Biden has prostate cancer, his office has said.
The statement said Mr Biden, who left the White House in January, is reviewing options for treatment with his physicians.
It read: “Last week, President Joe Biden was seen for a new finding of a prostate nodule after experiencing increasing urinary symptoms.
“On Friday, he was diagnosed with prostate cancer, characterised by a Gleason score of 9 (Grade Group 5) with metastasis to the bone.
“While this represents a more aggressive form of the disease, the cancer appears to be hormone-sensitive which allows for effective management.
“The President and his family are reviewing treatment options with his physicians.”
File pic: Reuters
According to Cancer Research UK, a Gleason score of 9 means the cancerous cells “look very abnormal” and the disease is “likely to grow quickly”.
A source familiar with Mr Biden and his family’s thinking has told Sky’s US partner network, NBC News, that the former president is considering “multiple treatment options” – including hormone treatment for the cancer.
They added he is at his home in Wilmington, Delaware, and that as of now, it is unclear where the former president will be treated.
Mr Biden, 82, was the oldest person to ever serve as president, with concerns about his health raised regularly during his campaign for re-election last year.
After a poor debate against Donald Trump in June, he withdrew from the 2024 election and endorsed his vice president Kamala Harris.
In February 2023, he had a skin lesion removed from his chest that was a basal cell carcinoma, a common form of skin cancer.
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A Mexican navy ship has hit the Brooklyn Bridge during a promotional tour in New York City.
The New York Fire Department said authorities were responding to injuries but had no details about how many people might have been hurt or whether they were on the vessel or on the bridge.
Sky’s US partner network NBC News reports that at least three people were seriously injured in the incident.
The Mexican navy said in a post on X that the Cuauhtemoc, an academy training vessel, was damaged in the accident, which has prevented it from continuing its voyage.
Eyewitness video of the collision posted online showed the mast of the ship, which was flying a large Mexican flag, scraping the underneath of the bridge.
Pic: AP
The vessel then drifted toward the edge of the river as onlookers scrambled away from shore.
The Mexican navy said the status of personnel and material was under review by naval and local authorities, which were providing assistance.
The Cuauhtemoc is about 297ft long and 40ft wide, according to the Mexican navy. It sailed for the first time in 1982.
Pic: AP
Each year, it sets out at the end of classes at the naval military school to finish cadets’ training.
It left the Mexican port of Acapulco, on the Pacific coast, on 6 April with 277 people onboard, the navy said at the time.
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One person has died in a bomb explosion near a reproductive health clinic in California, authorities have said.
The incident took place in Palm Springs, a city two hours east of Los Angeles, and is being investigated as a possible car explosion.
The city’s mayor Ron DeHarte said one person died in the blast, adding that the bomb was “either in or near” a vehicle. The deceased’s identity is not known, Palm Springs police said.
Dr Maher Abdallah, who runs the American Reproductive Centers clinic, told the Associated Press his facility was damaged but all staff were safe and accounted for.
The explosion damaged the office space where the practice conducts patient consultations, but the IVF lab and stored embryos were unharmed, he added.
“I really have no clue what happened,” he said. “Thank God today happened to be a day that we have no patients.”
Debris covers the ground after the explosion. Pic: ABC7 Los Angeles/AP
In a statement posted on Facebook the clinic said it was “heartbroken” to learn someone died in the explosion and added: “Our deepest condolences go out to the individuals and families affected.”
It continued: “Our mission has always been to help build families, and in times like these, we are reminded of just how fragile and precious life is.
“In the face of this tragedy, we remain committed to creating hope – because we believe that healing begins with community, compassion, and care.
The clinic will be fully operational on Monday, it added.
“This moment has shaken us – but it has not stopped us. We will continue to serve with strength, love, and the hope that brings new life into the world,” the statement concluded.
Pic: ABC7 Los Angeles/AP
The Palm Springs city government said in a post on Facebook that the explosion happened on North Indian Canyon Drive, near East Tachevah Drive, before 11am local time (6pm GMT).
A burned-out car can be seen in a parking lot behind the building in aerial footage.
The blast caved in the clinic’s roof and blew debris across four lanes of the road.
Another person said he was inside a cannabis dispensary nearby when he felt a massive explosion.
Nima Tabrizi said: “The building just shook, and we go outside and there’s massive cloud smoke.”
Investigators from the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives are travelling to the scene to help assess what happened.
California governor Gavin Newsom has been briefed on the explosion, his press office said.
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