Sen. John Kennedy (R-La.) told Treasury Secretary Janet Yellen at a Senate Banking hearing this week that defending “Bidenomics” was like “defending a fungal infection.” | AP Photo/Mariam Zuhaib
A blockbuster jobs report. A hot stock market. And now, another report confirming inflation eased last year. Democrats are poised for an economic victory lap.
But don’t expect Republicans on Capitol Hill to stop hammering President Joe Biden on the economy. They continue to push back — hard — as they did Thursday when Treasury Secretary Janet Yellen appeared before the Senate Banking Committee to tout the improving economic picture.
“Some prices will be higher than they were before the pandemic, and will stay higher — but wages have risen considerably,” Yellen testified. “We don’t have to get the prices down, because wages are going up.”
Republicans aren’t buying it. “We don’t?!” an incredulous Sen. John Kennedy (R-La.) responded to Yellen’s assertion.
In more than a dozen interviews, congressional Republicans argued that Democrats’ efforts to downplay the high costs Americans continue to pay for everyday items like groceries, energy and housing shows just how out of touch they are. Even as the broader U.S. economy trundles upward and
the latest economic release reaffirmed prices of key consumer goods generally eased last year, GOP lawmakers are betting that those costs will remain a burden for low- and middle-income voters — even if they’ve come down from the heights of the pandemic, as Biden and Democrats regularly point out.
“Inflation is cooling down, no doubt. But prices have gone up on everything,” Rep. Dan Newhouse said, a more centrist-leaning Republican who represents a rural stretch of central Washington. And those elevated prices for key consumer goods are “not going to come down” to pre-pandemic levels, Newhouse added.
“The aggregate of inflation in the last few years is still higher than what middle-class America is able to afford,” said Sen. Kevin Cramer (R-N.D.). “They just aren’t seeing it.”
In fact, many Republicans said that Biden is doing himself a disservice by touting a thriving economy when many Americans have yet to experience significant improvement first-hand.
“When you actually get out of this bubble here in Washington, and talk to people back home, what they really feel is … everything’s still more expensive,” Sen. Eric Schmitt (R-Mo.) said. “So this disconnect between Biden going around talking about Bidenomics, and then people at home are saying, ‘Well, wait a minute. Things are still really expensive for me’ — I think that’s the fundamental problem that Democrats have in trying to sell this.”
So far, it’s a growing talking point for the president and Democrats on the campaign trail. Biden recently proclaimed that the U.S. economy “is the strongest in the world” amid recent surges in
consumer sentiment, unemployment dropping below 4 percent for two full years — the longest stretch in half a century — and inflation falling to 2 percent over the last six months.
“While Republicans vacillate between denying the reality of a strong economy and trying to take credit for it, President Biden is building our economy from the middle out and bottom up,” White House spokesperson Michael Kikukawa said in a statement. “The results speak for themselves: 3.1 million jobs created last year—more than any year under the previous administration, a record 16 million small business applications, gas prices under $3.00 at most gas stations, the stock market reaching all-time highs, and wages rising faster than inflation.”
That upturn in consumer sentiment isn’t yet reflected in the presidential race, however. A
recent NBC poll found Biden trails former President Donald Trump by 20 points when voters are asked which candidate would better handle the economy.
And even White House officials privately acknowledge food inflation isn’t falling fast enough from its pandemic peak, which they fear will continue to drag down voters’ outlooks of the economy ahead of this fall’s elections. Biden recently
noted on the campaign trail that he’s pressing corporations, like major grocers, to pass on their savings to consumers. White House officials also note the administration has increased food benefits for millions of low-income Americans, including children, to help blunt the financial toll of higher grocery prices.
Mortgage rates have been similarly slow to fall. Gas prices, down dramatically from their crushing 2022 peak, have started to edge up recently. Republicans say they plan to draw the connection between those trends and Biden’s domestic spending and energy policies.
“You’re talking about a two-year time period in which people in South Dakota are paying $10,000 more a year just for normal living expenses,” Sen. Mike Rounds (R-S.D.) said in an interview. “It’s not going down. It just simply isn’t going up as fast as it has for the last two years. So that is something that he can’t get away from.”
Republicans have also noted lingering red flags in some of the recent economic reports Biden has touted. That includes a decline in the average number of hours Americans are working and still-weak workforce participation rates, both of which can be an early sign of a recession.
Rep. John Duarte (R-Calif.), a vulnerable Republican who represents a blue district, said his agriculture-heavy district in California’s Central Valley “is still struggling.”
“Working families here are looking for work and stretching their paychecks,” Duarte said.
Some Republicans argue that even if pieces of the economy are improving, it’s too late for Biden’s reelection bid to fully benefit.
“My view is that yes, things are somewhat better, but not well enough to be recognized politically,” said Rep. French Hill (R-Ark.). “I think a lot of citizens are still concerned about the fact that over the past few years, they’ve got a lot less buying power from their salaries and their dollars.”
Hill, who served as a senior member of former President George H.W. Bush’s economic team in the early ‘90s, said in his experience, Americans “lock in” their feelings about the economy over a longer period of time.
Bush went on to lose reelection, even as the economy was showing signs of improving after a downturn and a spike in unemployment.
“The economy had been growing since early 1991,” Hill recalled wryly. “But that didn’t make a lot of difference in the 1992 election.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
