U.S. President Joe Biden and first lady Jill Biden were seen walking to Marine One on the South Lawn of the White House on July 14, 2023 in Washington, DC, with President Biden giving a thumbs up. This positive gesture comes in light of Morgan Stanley crediting his economic policies for the unexpected surge in the U.S. economy. The impact has been so significant that the bank had to revise their estimates for U.S. gross domestic product (GDP) upwards.
In a research note released on Thursday, Ellen Zentner, the chief U.S. economist for Morgan Stanley, attributed the “boom in large-scale infrastructure” to President Biden’s Infrastructure Investment and Jobs Act. She also highlighted the strength of manufacturing construction. These unforeseen developments have led Morgan Stanley to project a GDP growth rate of 1.9% for the first half of this year, a substantial increase compared to their previous forecast of 0.5%.
Zentner stated, “The economy in the first half of the year is growing much stronger than we had anticipated, putting a more comfortable cushion under our long-held soft landing view.”
Morgan Stanley analysts not only revised their estimate for GDP growth in the fourth quarter, doubling it from 0.6% to 1.3%, but they also raised their forecast for real GDP in 2024 by 0.1% to 1.4%. Zentner emphasized that these numbers reflect the industrial strength of the U.S. economy.
This revision by Morgan Stanley comes at a crucial time for the Biden administration as President Biden has been promoting his economic achievements throughout the summer. During a visit to a Philadelphia shipyard, he expressed his belief that his infrastructure-focused economic strategy, dubbed “Bidenomics,” is transforming the country. He has positioned this approach as his key focus for his 2024 reelection campaign.
However, there is some risk involved in this strategy. According to the latest CNBC All-America Economic Survey, only 37% of respondents approved of Biden’s handling of the economy, while 58% disapproved. The survey also revealed that most Americans consider the current state of the economy to be fair or poor.
Republicans have capitalized on this economic pessimism, criticizing Biden’s reliance on government spending and regulation, which they claim has caused inflation and other economic challenges. GOP House Speaker Kevin McCarthy described “Bidenomics” as “an economic disaster.”
Despite these challenges, the current report indicates a positive trend for President Biden’s political fortunes. White House assistant press secretary Mike Kikukawa responded to the report stating that the president’s agenda is stimulating investments and job creation in manufacturing and infrastructure.
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