U.S. President Joe Biden gives a thumbs up as he walks with first lady Jill Biden to Marine One on the South Lawn of the White House July 14, 2023 in Washington, DC.
Drew Angerer | Getty Images
WASHINGTON — Morgan Stanley is crediting President Joe Biden’s economic policies with driving an unexpected surge within the U.S. economy that’s so significant that the bank was forced to make a “sizable upward revision” to its estimates for U.S. gross domestic product.
Biden’s Infrastructure Investment and Jobs Act is “driving a boom in large-scale infrastructure,” wrote Ellen Zentner, chief U.S. economist for Morgan Stanley, in a research note released Thursday. Along with infrastructure, “manufacturing construction has shown broad strength,” she wrote.
Consequently of those unexpected swells, Morgan Stanley now projects 1.9% GDP growth for the primary half of this yr. That is nearly 4 times higher than the bank’s previous forecast of 0.5%.
“The economy in the primary half of the yr is growing much stronger than we had anticipated, putting a more comfortable cushion under our long-held soft landing view,” Zentner wrote.
The analysts also doubled their original estimate for GDP growth within the fourth quarter, to 1.3% from 0.6%. Looking into next yr, they raised their forecast for real GDP in 2024 by a tenth of a percent, to 1.4%.
“The narrative behind the numbers tells the story of commercial strength within the U.S,” Zentner wrote.
Morgan Stanley’s revision got here at a pivotal time for the Biden White House. The president has spent the summer crisscrossing the country, touting his economic achievements. “Together we’re transforming the country, not only through jobs, not only through manufacturing, but additionally by rebuilding our infrastructure,” Biden said Thursday during a visit to a Philadelphia shipyard.
The White House has dubbed this brick-and-mortar economic growth formula “Bidenomics,” a phrase originally utilized by Republicans to jab the president, who co-opted the term as a badge of honor.
Along with his legacy, Biden has also staked his 2024 reelection bid on Bidenomics, betting that strong economic growth and a campaign built around kitchen table issues will ultimately drown out Republicans’ culture war outrage.
This might be a dangerous wager, nonetheless. The newest CNBC All-America Economic Survey, released Thursday, found that just 37% of respondents approved of Biden’s handling of the economy, while 58% disapproved. Only 20% of Americans agreed that the economy was excellent or good, while a whopping 79% said it was just fair or poor, CNBC’s poll found.
Republicans have seized on voters’ economic pessimism to argue that Biden is ignoring on a regular basis Americans’ ongoing challenges with high rates of interest and inflation that has fallen some, but still sits above pre-pandemic levels.
“Bidenomics is about blind faith in government spending and regulation,” GOP House Speaker Kevin McCarthy said in a press release Friday. “It’s an economic disaster where government causes decades-high inflation, high gas prices, lower paychecks and crippling uncertainty that leaves America worse off.”
With 16 months to go before Americans solid their ballots for president, Biden’s political fortunes, for the moment, seem like improving together with the economy.
“This report confirms what we have long said: Our strong and resilient economy is Bidenomics in motion,” White House assistant press secretary Mike Kikukawa said in an email to CNBC.
“The president’s economic agenda is spurring investments in manufacturing and infrastructure which are creating jobs and supporting staff.”
