President Joe Biden, who insists that the economy has been robust under his watch, took credit last week as a report from the Bureau of Economic Analysis showed that the economy grew at a 2.6% annualized pace during the third quarter of 2022.
Real gross domestic product, the sum of all final goods and services produced in the economy, rose between July and September. The nation, however, had previously met the rule-of-thumb definition of a recession, two consecutive quarters of negative growth, as the economy contracted at a 1.6% annualized rate in the first quarter and a 0.6% pace in the second quarter.
The improved economic output was driven by higher exports, as well as consumer spending and new government expenditures. Consumers’ Research Executive Director Will Hild said during an interview with The Daily Wire that much of the economic activity occurs as American households borrow money at record levels.
“What we’ve seen since the beginning of the Biden administration is a massive increase in consumer loans. People are increasingly relying on credit cards to pay basic bills. The savings rate has cratered,” he remarked. “And that can only go so long … The average consumer is on an unstable path right now just to keep their head above water.”
The total level of consumer loans increased from $1.5 trillion at the beginning of Biden’s tenure to $1.8 trillion as of two months ago, according to data from the Federal Reserve. The personal savings rate has dropped from 20% to slightly more than 3% over the same period, according to data from the Bureau of Economic Analysis, marking a significant decline from typical rates witnessed before the lockdown-induced recession.
Hild noted that the improvement in net exports is likely aided by the Biden administration’s efforts to release supply from the Strategic Petroleum Reserve, a stock of emergency crude oil used to manage disruptions in energy markets. The commander-in-chief has presided over a drop in the Strategic Petroleum Reserve from 638 million barrels to 402 million barrels, according to data from the Energy Information Administration.
“The administration has released an unprecedented amount of the Strategic Petroleum Reserve into the market in order to depress prices,” Hild said. “Most political pundits consider this to be a brazen use of public resources in order to keep gas prices low for purposes of helping his approval numbers before the midterm elections. The consequence of releasing that much oil in the market is that a lot of it gets exported.”
Reports indicate that some of the fuel has been sent overseas, including to a Chinese oil company with links to Hunter Biden. “The most likely contributor to that massive export number that we saw, which is so out of kilter with previous quarters, was the Strategic Petroleum Reserve,” Hild continued. “If you look at the other stuff in the GDP report, there was nothing really notable that would make me think it’s a different product or different export.”
The denial of the economy entering a technical recession from the White House and the legacy media was surprising to Hild, who said that officials from both sides of the aisle have referenced the rule-of-thumb definition “as long as” he “could remember.”
“They are moving the goalposts by suddenly going back to a much more vague definition that no one had been using,” he said. “If you look at the whole panoply of evidence out there, minus this one weird GDP print that’s up for one-off reasons, it does look like we not only have hit the two consecutive quarters of negative growth, but also the general conditions are not good.”