The latest issue of the Fed’s Beige Book shows an economy stagnant with growing downside risks. The Fed’s analysis of the economy shows that Bidenomics is a failure.
The Fed’s own summary of economic activity says it all.
- Growth has stalled: “Economic activity was about flat on balance, but performance was quite mixed both across and within sectors.”
- Consumers are increasingly pinched: “Several reports mentioned weakness in discretionary spending, as consumers’ price sensitivity remained elevated.”
- Job growth is negligible and losses rising: “Employment was unchanged overall, and wages increased at a slow-to-moderate pace. Labor demand weakened somewhat, as job openings fell slightly, and layoffs picked up a bit.”
- Downside risks are increasing: “The outlook was cautiously optimistic on average, but selected contacts expressed either greater uncertainty or an uptick in downside risks.”
In short, economic growth has stalled and the risk of a recession is increasing.
The Fed’s own data shows that Biden’s economic agenda isn’t working for the average American. Employment isn’t growing and the Fed’s interest rate policies haven’t brought inflation down to the Fed’s target range.
The combination of economic stagnation and inflation harkens back to the stagflation of 1970s.
Indeed, Economist Larry Summers, who was Bill Clinton’s Treasury Secretary, see the economy headed into a period of prolonged stagflation.