With the Biden v Trump presidential election rematch beginning in earnest, Treasury Secretary Janet Yellen addressed the Economic Club of Chicago in a speech Thursday that was equal parts policy and campaign politics.
Citing a resilient economy that has seen job growth, low unemployment, a record stock market and receding inflation, Yellen touted Bidenomics as an egalitarian policy that, unlike Trump’s signature initiatives, has put the interests of the middle class ahead of the wealthiest Americans.
“Put simply, it’s been the fairest recovery on record,” Yellen said during her remarks to the city’s business leaders. “We see this in gains not only for middle-class Americans, but also of course, demographic groups, such as the rapid decline in unemployment rates for Black and Hispanic Americans.”
A Brooklyn native, former Fed chair and renowned economist, Yellen was appointed the first female Treasury secretary by President Joe Biden in 2021. She used the guest speaker’s platform Thursday to make the case that Biden’s economic policies have helped the U.S. recover more quickly from pandemic disruption than other nations, and more successfully than public perception seems to show.
Yellen recounted improving economic indicators that the administration hopes will hit home with voters in November, including GDP figures released Thursday by the Commerce Department that show the U.S. economy grew 3.1% last year, defying projections by some economists of a recession in 2023.
“Some forecasters thought a recession last year was inevitable,” Yellen said. “President Biden and I did not. Instead of contracting, the economy has continued to grow.”
Meanwhile, inflation, which peaked at an annual rate of 9.1% in June 2022, is “coming well under control,” Yellen said. Last month, the Consumer Price Index ticked up to 3.4%, a substantial year-over-year improvement from December 2022, when it stood at 6.5%.
While still above the Fed’s annualized target of 2%, the inflation rate is keeping hope alive among some economists that interest rate cuts may be coming this year after 11 increases in 16 months boosted the benchmark rate to a range of 5.25% to 5.5% in July 2023, up from near zero.
As inflation cools, the unemployment rate, which peaked at 14.7% in April 2020, has dropped to pre-pandemic levels, holding steady at 3.7% in December.
The event, held at the Fairmont Chicago Millennium Park, was moderated by Sean Connolly, president and CEO of Conagra Brands, and chairman of the Economic Club. Despite the encouraging economic indicators, he challenged Yellen on the disconnect between statistics and perception, with consumer sentiment still lagging.
“For many Americans … specifically voters, they tell us that the economy feels like it’s heading in the wrong direction,” Connolly said.
Yellen cited improving public sentiment in the University of Michigan’s survey of consumers — an index measuring consumer confidence — which jumped 13% this month to 78.8%, its highest level since July 2021.
She also attributed lagging public sentiment to the pandemic and its aftermath.
“Americans have been through a lot,” Yellen said. “The pandemic took a tremendous toll on American lives, and livelihoods and people’s ways of living and on their children. And we were through a period in which inflation was high, higher than we had really seen since the late ’70s or early ’80s. But it has come down quickly.”
Yellen also noted that some of the benefits of Bidenomics, such as the investments in infrastructure and clean energy, have yet to be fully realized. Those include better roads and bridges, more manufacturing jobs and new industries, she said.
The Midwest, she said, has become the new “battery belt” of the country as electric vehicle manufacturing and adoption ramps up, bringing with it a “huge surge in clean energy jobs.”
In September, Chinese EV manufacturer Gotion announced plans to build a $2 billion battery plant in Manteno, near Kankakee. In November, Stellantis committed to rehire thousands of workers and invest nearly $5 billion to retool its idled Belvidere plant and build an adjacent electric vehicle battery plant.
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Both manufacturers were encouraged to build EV battery plants in Illinois through state and federal incentives.
While progress has been made, Yellen acknowledged many Americans are still not sold that Bidenomics has improved their lives enough to earn their votes in November.
“President Biden and I know that our work is far from done,” she said. “Though inflation has declined, prices of key goods that matter to middle-class Americans remain too high.”
At the same time, Yellen took several swipes at the economic policies of Biden’s presumptive Republican opponent, former President Donald Trump, including the 2017 Tax Cuts and Jobs Act, which she said increased the deficit by $2 trillion while doing little to spur investment.
As far as Trump’s “Infrastructure Week” that never came, Yellen said drivers who have been stuck in construction traffic during the Biden administration know the difference, and are beginning to see the payoffs from his policies.
“Our country’s infrastructure has been deteriorating for decades,” Yellen said. “In the Trump administration, the idea of doing anything to fix it was a punch line. But this administration has delivered.”
