Economists rip White House for economic 'spin': 'Actively making the problem worse'
White House can't 'talk-point' their way out of economic rut, Manhattan Institute expert tells FOX Business
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FIRST ON FOX: Economic policy experts criticized the White House on Monday for attempting to spin the latest economic indicators despite rising inflation and widespread consumer angst.
On Monday, Ron Klain, the White House chief of staff, tweeted that there was a lot of "noise" about the economy, but that the reality was much different. His tweet came in response to a report from Goldman Sachs pegging the likelihood of a recession occurring in the next 12 months at 35%, lower than the consensus 63% odds.
Klain also retweeted a post Sunday from Dean Baker, the co-founder of the left-wing think tank Center for Economic and Policy Research, suggesting that the economy was strong because of the low unemployment rate.
"The broader point is, again, prices are up 13% since President Biden was inaugurated in January 2021 and wages have gone up by just half of that," said Brian Riedl, an economist and senior fellow at the Manhattan Institute. "You can't spin your way out of rising prices, falling real wages and declining stock values."
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"There's no set of talking points, rhetoric, speeches or retweets that's going to alter what Americans see they're paying every day at the pump and at the grocery store," he continued. "The White House just sees this as a communications problem while actively making the problem worse with policies that worsen inflation."
The Consumer Price Index, a key measure of inflation, surged 8.2% year-over-year in September, according to the Department of Labor, coming in hotter than expected. Energy prices ticked up 19.8% and food prices increased 11.2% on an annual basis last month.
While the U.S. added 263,000 jobs and the unemployment rate declined to 3.5% last month, the labor force participation rate, which measures the percentage of working-age adults working or looking for work, has remained low, according to Federal Reserve data. The labor force participation rate came in at 62.3% in September, compared to its pre-pandemic level of 63.4%.
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"The rhetoric coming out of the White House has become so Orwellian that you are — much like Orwell's Ministry of Truth — it is much more likely to be completely devoid of truth than to even have a kernel of truth in it," Heritage Foundation research fellow E.J. Antoni told FOX Business.
"If you want to look at just a single slice in time, things look pretty robust," Antoni said. "But when you take a step back, you look at it from 30,000 feet, you realize we're actually in trouble."
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Antoni argued that once economic growth begins slowing and impacting businesses, layoffs will follow.
"When it comes to things like inflation, people are earning more in their weekly paycheck, but in terms of what that money will actually buy, that has dropped about five and a half percent since Biden took office," he continued. "If you want to look at only certain numbers in a very isolated way, you can make a case that people are doing better and that the economy is doing better."
"But when you look at things holistically, the economy is more on shaky ground than solid ground."
Antoni calculated that the average American family has experienced a loss of roughly $6,000 in annual wages as a result of inflation.
President Biden speaks about inflation in Irvine, California, on Oct. 14. (AP Photo/Carolyn Kaster / AP Newsroom)
In addition, the National Association for Business Economics released a survey Monday showing that most business economists believe the U.S. has already entered a recession or will likely soon enter a recession.
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"It's great that at this point we still have a low unemployment rate," Riedl told FOX Business. "But as long as inflation remains stubborn, the Federal Reserve is going to hit the brake pedal harder. We're already seeing this in the housing market. We're entering a housing recession that can easily spread to other parts of the economy as interest rates rise."
"This is not something you can talk-point your way out of."
The White House didn't respond to a FOX Business request for comment.