Yellen upbeat on US economy, says Bidenomics is driving investment, job growth

LAS VEGAS, USA – Treasury Secretary Janet Yellen made a robust pitch in the swing state of Nevada on Monday, August 14, that President Joe Biden’s policies are powering historic job growth and rebuilding competitiveness, despite polls showing Americans remain skeptical.

Speaking at a union hall just off the famous Las Vegas strip, Yellen underscored the importance of the climate-focused Inflation Reduction Act (IRA), which marks its anniversary on Wednesday, August 16, especially in a summer that has made headlines with record heat and climate change-related disasters.

“It’s our nation’s boldest-ever climate action. And it is beginning to spark an economic renaissance in communities that had been left behind,” Yellen said at International Brotherhood of Electrical Workers (IBEW) Local 357, after touring a nearby training center where workers learn to work on clean-energy projects.

Yellen said her visit to Nevada, a key battleground state in the 2024 presidential election, is part of a major push by Biden and his Cabinet to promote the positive impact of the IRA and other policies that she said are boosting long-term growth and making the United States more resilient to future shocks.

“Americans are beginning to see in their daily lives the impact of that, but there’s a lot more coming down the pike,” she said, adding that polls already showed a large share of Americans felt good about their personal situation, even if they had weaker views on the broader economy.

Yellen said China’s slowing growth, Russia’s war in Ukraine, and climate change could still pose risks to the US economy and did not rule out a recession, but she felt upbeat.

“I feel very good about US prospects overall,” Yellen told reporters, noting that inflation and the unemployment rate had both dropped below 4%, and that the US economy was continuing to expand.

The US economy has outrun recession warnings with record-low unemployment, strong wage gains, and better-than-expected gross domestic product growth, but many voters who backed Biden in 2020 think the economy has fared poorly, and may not vote for him in the 2024 election, a recent Reuters/Ipsos poll showed.

Nevada’s economy, which is heavily service-driven, has largely recovered from the pandemic, but its unemployment rate of 5.4% is the highest of the 50 US states, according to June data from the nonpartisan public officials’ association the National Conference of State Legislators.

Asked about Nevada’s higher unemployment rate, she said the IRA had brought down health care costs for citizens, and clean energy tax credits were helping diversify the economy beyond the traditional tourism.

“Workers are better off than they were last year. Real average hourly earnings have grown over the past year – meaning that wage gains are outpacing inflation,” she said in her speech.

She said over 13 million jobs had been created since Biden took office and the share of prime-age Americans – those between ages 25 and 54 – participating in the workforce had reached its highest level in over 20 years.

The share of prime-age female workers currently working was the highest it has ever been, Yellen said, noting that jobless rates for Black and Latino Americans were also among the lowest on record.

“These are not abstract statistics,” Yellen told the IBEW members. “These are real Americans back at work – able to put food on the table, support their families, and save for retirement.”

IRA’s impact on low-income communities

Yellen said a central goal of the IRA was revitalizing communities that had suffered industrial decline or were left behind. Targeted bonuses had helped concentrate investments in clean energy, electric vehicles, and batteries in counties that previously lagged in earnings, college graduation rates, and child poverty rates, she said.

She also touched on the challenges of transitioning away from fossil fuels, citing the risks posed by overconcentration of key inputs such as batteries, solar panels, and critical minerals in a handful of countries.

She named no countries, but a recent report by the International Energy Agency said China holds at least 60% of the world’s manufacturing capacity for most mass-manufactured technologies, such as solar photovoltaic and wind systems.

Yellen said one of the goals of the IRA, which includes $500 billion in new spending and tax breaks, was to build a diversified clean-energy supply chain and “reduce chokepoints, mitigate disruptions, and protect our economic security.”

The full impact won’t be known until last year, when taxpayers claim tax credits, but a Treasury official said the private sector has announced over $110 billion in new clean-energy investments since the bill’s passage a year ago. – Rappler.com