President Biden has of late unveiled the term “Bidenomics” in an attempt to brand his administration’s economic agenda a success story. “Good jobs and lower costs: That’s Bidenomics in action,” he declared.

Unfortunately for him, the American public isn’t buying it. Recent polling shows only 34% of Americans approve of his handling of the economy.

The disconnect between Biden’s optimism and the American public’s skepticism is justified. While Biden touts falling rates of inflation and a strong labor market, with a little digging you will find flaws and weaknesses in his argument. Moreover, several other important indicators suggest a recession on the horizon.

Inflation news not as positive as Biden wants you to believe

The inflation rate for June was just reported to come in at a 3% annualized rate. That’s the lowest rate in more than two years. We must remember, however, that this inflation is tacked onto price levels from June 2022, in which inflation had spiked by 9.1% over the previous year – the largest annual increase in 40 years. When Biden brags about “lower costs,” it’s simply a lie. Prices keep rising, just at a slower pace, and are layered on top of previous historic price hikes.

Overall, prices are roughly 16% higher today than when Biden entered office about two and half years ago. Indeed, prior to June, the annualized inflation rate had remained at or above 4% for 28 consecutive months, something not seen in four decades. The fact that prices continue to rise at any pace at all over the massive surge experienced the previous two years means households, especially low-income households, continue to get hammered.

Labor market not as strong as topline number suggests

Following what he considered a strong jobs report for June, Biden bragged about how he helped “create” more than 13.2 million jobs during his administration. Indeed, the national unemployment rate stands at 3.6%, considered quite low by historical standards.

Of course, those jobs supposedly “created” are more accurately described as “recovered” — as in jobs being recovered as the economy reopened after the Covid shutdowns.

Furthermore, economists will tell you that employment is a lagging indicator, meaning that the economy can be faltering for a while before the unemployment rate surges. When you look beneath the surface a little, you will see red flags in the labor market.

The category with the largest job gains in June was government, not a sign of a robust economy. Nearly 30% of new jobs in June were government hires.

Moreover, there continues to be a disconnect between the household survey and the establishment survey data. The household survey discovers how many people are working; whereas, the establishment data show how many people are on payrolls. If a person works two different jobs, he will be counted once in the household survey but twice on the establishment survey because he is on two different payrolls. Since June of last year, the household survey shows roughly 800,000 fewer jobs added compared to the establishment survey (3.7 million vs. 2.9 million), which strongly suggests a growing number of people taking second jobs in order to get by.

Indeed, the number of people counted as working part-time for economic reasons climbed by 15% over the past year.

Moreover, the BLS revised May and April job counts downward by a combined 110,000 jobs, putting a dent in what was previously thought to be strong months of job growth.

And at 62.6%, the labor force participation rate remains below pre-pandemic levels.

Several other warning signs

Digging through important economic data and indicators strongly suggests a looming recession, an economic downturn the president no doubt hopes will be delayed until after next year’s election. One must examine the following points and ask themselves if these are the signs of a healthy economy.

  • Consumers are tapped out: Wages have not kept pace with inflation over the past couple of years. As a result, consumers have had to rely on debt to finance purchases, piling up the highest credit card debt on record. Combine the record debt with record high credit card interest rates, and many households will have serious trouble digging out. Making matters worse, the resumption of student loan payments this fall is projected to divert up to $18 billion a month from consumer spending, or a roughly 2% drop in spending on nonessential items.
  • Bank failures: Multiple bank failures this spring, including the second largest in history, may have served as the canary in the coal mine. One study suggested nearly 200 more banks across the U.S. are at risk of a similar fate.
  • Surge in corporate bankruptcies: So far this year, the number of corporate bankruptcies is more than double this time last year, and it’s at the highest rate since the economy was still struggling with the Great Recession in 2010.
  • Housing bubble redux?: The recent dramatic rise in mortgage rates combined with the previous years-long run-up in housing prices buoyed by historically low rates has helped make housing less affordable than it’s been in 30 years. As a result, existing home sales have fallen by about one-third over the last year and a half.
  • Inverted yield curve: Long-term bond yields are typically higher than short-term bond yields. In times of economic distress, however, oftentimes short-term yields will be higher than long-term yields. This is referred to as an “inverted yield curve.” One measure of the yield curve, the 10-year minus the 2-year yield, has been inverted for an entire year, and it is the longest and deepest such inversion in more than 40 years. An inverted yield curve has preceded all 10 recessions since 1955.
  • Leading economic indicator flashing red: Another well-watched and reliable economic gauge is the Conference Board’s Leading Economic Index (LEI), which is designed to provide “an early indication of significant turning points in the business cycle and where the economy is heading in the near term.” The LEI has been negative for 14 consecutive months, which points to “weaker economic activity ahead.”
  • Investment falling: Gross private domestic investment continues to fall. Investment was down in three of the last four quarters, and in Q1 of 2023 it was down 8% in inflation-adjusted terms compared to a year prior.
  • Credit crunch: With the Federal Reserve raising target interest rates at the fastest clip in 40 years, loans are becoming far more expensive. Combine this with rising economic uncertainty, which leads to banks tightening credit standards, we have a credit crunch developing. Less credit slows economic activity, especially for major consumer purchases and business investment.


President Biden wants to convince you that the economy is booming. He is so confident that he’s even coined the term “Bidenomics” to take ownership of it.

But upon closer scrutiny, the economy is wobbly at best, like a house of cards still propped up by unprecedented money printing in the wake of the Covid lockdowns. Even Biden’s two go-to indicators, slowing inflation and low unemployment, are not quite as strong as he makes them seem.

If the recession many are predicting hits, it will be interesting to see how quickly he tries to memory-hole the term “Bidenomics,” dissociate himself from the economy, and lay the blame elsewhere.