Borrowing Back to Baseline

Borrowing Back to Baseline

Share this article

  • Strains on US consumer spending, reflected in rising delinquency rates on credit cards, are seen by Jared Bernstein, head of President Joe Biden's council of economic advisers, as a return to pre-pandemic debt levels. Bernstein, a key advocate for Biden's economic agenda, pointed to wealth gains, job market strength, and rising real wages in 2023 as signs of the US moving beyond the inflation surge that impacted Biden's approval ratings. Despite the increase in consumer debt with the waning of pandemic stimulus programs, Bernstein emphasized that the cost to consumers to service their debt remains manageable, supported by a 3.7% rise in disposable income over the past year.
  • As inflation recedes, economists anticipate that the Federal Reserve is done with interest-rate increases and may cut borrowing costs next year. The University of Michigan consumer sentiment survey reaching a five-month high in December and increased optimism about the inflation outlook contribute to the positive economic narrative. The White House is leveraging this data to bolster confidence in Biden's economic stewardship.

Why it matters

Looking ahead to Biden's agenda for 2024, Bernstein emphasized a focus on "lowering costs," intending to build on progress made by addressing expenses related to essential items like insulin, prescription drugs, healthcare, and reducing various fees paid by Americans, from concerts to banking services.


Get Smarter
About Investing

Join 35,000+ subscribers and get our 5 min daily newsletter on daily local and international financial news.
Get Smarter<br/> About Investing

Similar News