Treasury Secretary Janet Yellen, speaking at a Ford electric vehicle center in Michigan Thursday, said that despite high inflation, current economic conditions were much better than could have been predicted even prior to the pandemic.
Yellen claimed that “by any traditional metric,” the U.S. has undergone one of the quickest economic recoveries in modern history, according to a prepared transcript of her remarks.
However, since gross domestic product (GDP) has declined for the past two quarters, the country is currently experiencing a recession, according to a widely accepted “rule of thumb” amongst economists defining a recession as two consecutive quarters of declining GDP.
“Our plan has worked,” said Yellen, touting the American Rescue Plan and the administration’s vaccination campaign. “Household balance sheets are strong. Businesses continue to invest. Our broad and inclusive recovery has outpaced that of many other large economies.”
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On Thursday, the Federal Reserve announced that the outlook for future growth in the U.S. was “generally weak,” in its regular report on the nation’s economic health known as the Beige Book. Nearly half of the regional banks managed by the Federal Reserve reported contractions to their regional economies, with the same amount reporting slight to modest growth.
Yellen said that the Federal Reserve had the “primary role” in fighting inflation, but the administration was making “a meaningful difference.” Yellen acknowledged that the pain felt by inflation was “personal” to most people, and cited efforts such as the Inflation Reduction Act and the release of oil from the Strategic Petroleum Reserve (SPR) as examples of efforts made by the Biden administration to combat inflation.
While the administration has taken credit for lowering gas prices through the release of oil from the SPR, the U.S. government will likely have to refill the SPR at a loss of around $30 per barrel. Media outlets from across the political spectrum have also cast doubt on the Inflation Reduction Act’s ability to reduce inflation.
Yellen also stressed “economic fairness,” highlighting in particular a “national imperative to increase the affordability of housing.”
“Simply put, it should be easy – not hard – to put a roof over your head,” she said. “Even as the Administration’s policies prevented the tsunami of pandemic-related evictions that we had feared, we must continue advancing our coordinated government approach to expand the supply of housing.”
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Only 6% of the more than 3,300 emergency housing vouchers distributed by the Biden administration’s Department of Housing and Urban Development to Los Angeles to help with its housing crisis have been leased, The Los Angeles Times reported in July. Nationwide, only 38% of 70,000 vouchers had been leased.
The cost of shelter has increased 5.7% year-on-year through July, according to the Bureau of Labor Statistics.
The views and opinions expressed in this commentary are those of the author and do not necessarily reflect the opinion of The Free Press.