‘Some very good news:' Biden touts Q4's GDP numbers

Standing in front of a banner highlighting his “Blueprint for America,” President Biden touted the fourth quarter's economic growth during a visit to Virginia on Thursday.

"Just this morning, we got some very good news about the American economy," he began his speech Thursday afternoon. "I'm not sure, and I mean this sincerely, that the news could have been any better.”

The U.S. economy grew at a 2.9% annual rate to cap the final three months of 2022, marking a strong end to the year after the economy contracted in the first two quarters of the year. The gross domestic product, or GDP, increased by 2.1% over the entire 2021.

The strong fourth quarter was attributed to increases in consumer spending and government spending, according to the Bureau of Economic Analysis.

“The jobs numbers are still very strong and even though the consumer has cooled somewhat, we are still seeing spending growth there,” added RiverFront Investment Group Senior Market Strategist Rebecca Felton during a Yahoo Finance Live appearance Tuesday.

‘Underlying demand and investment remains weak’

During what Biden's aides described as his first major economic speech of the year, Biden also noted recent good economic news about unemployment levels, wage growth, and manufacturing job levels as evidence that his economic plan is working.

He then turned to slam Republicans who, Biden said, would jeopardize the economic progress. The president blasted a Republican idea for a 30% national sales tax that has become a key Democratic talking point even though it’s unlikely to be taken up for a vote anytime soon.

On the other side of the aisle, House Ways and Means Chairman Jason Smith (R-MO) released a statement Tuesday downplaying the GDP numbers, saying the growth in Q4 was welcome but “underlying demand and investment remains weak and half of the growth was really due to an increase in inventories — suggesting that dark clouds loom over 2023.”

Economists also noted Thursday that the numbers, while strong, do indicate some slowing.

“In the fourth quarter of 2022, household spending and business investment were positive but seem to be losing momentum,” said American Institute for Economic Research economist Peter Early after Thursday’s release.

Experts also noted that the ongoing campaign from the Federal Reserve to raise interest rates to fight inflation is also expected to constrain further economic growth, if not lead to a recession in 2023.

Biden, though, pushed back against warnings of a slowdown during Thursday's remarks.

"They've been telling me since I got elected we are going to be in a recession" he said, arguing that the economy has always outperformed expectations under his watch.

Meanwhile, Biden’s fellow Democrats lined up to highlight the latest GDP numbers, with Rep. Don Beyer (D-VA) saying the news shows “the American economy is strong.”

The President’s remarks came during a visit to a union hall for steamfitters in Springfield, Virginia, where his wide-ranging speech walked through nearly every major piece of legislation passed during his first two years in office. The Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act were all extensively discussed.

Also Thursday, Biden announced a new “Invest in America” Cabinet comprised of his Secretaries of Commerce, Labor, Transportation, Treasury, Energy, and Health and Human Services, along with the EPA Administrator, Mitch Landrieu, and John Podesta. The new group's fundamental job, Biden said, is to focus on the implementation of recently passed bills.

"It's one thing to have passed it all," Biden said. "Now we have to make sure we are on it every single day."

Ben Werschkul is Washington correspondent for Yahoo Finance.

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