Axios Macro

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As the votes are tallied in the New Hampshire primary, pointing decisively toward a Trump-Biden rematch in November, we look at the new tone emerging from top Biden administration economic officials.

  • Plus, what to watch for in tomorrow's all-important GDP release.

Today's newsletter, edited by Kate Marino and copy edited by Katie Lewis, is 682 words, a 2½-minute read.

1 big thing: The Biden administration's emerging economic message

Treasury secretary Janet Yellen

Treasury secretary Janet Yellen at an event earlier this month. Photo: Julia Nikhinson/Bloomberg via Getty Images

With inflation and recession fears abating, the Biden administration is adopting a more confident, aggressive message about its economic record heading into the 2024 election.

Why it matters: A common thread from the administration's top economic officials is that not only is the economy doing well, but that the U.S. is experiencing a more broadly shared form of growth than was seen under President Trump.

  • That includes emphasis on delivering results for middle-class Americans — a mainstay of Biden's political identity — and improving conditions even in parts of the country that have faced longstanding challenges.
  • It comes as there have been signs of improvement in the decidedly gloomy mood about the economy among the American public.

Driving the news: Treasury Secretary Janet Yellen will deliver what her staff describes as a major speech tomorrow in Chicago, laying out themes she will advance throughout the year.

  • "Like many American cities, Chicago was built by a middle class that drove industrialization and innovation," Yellen will say, according to prepared remarks circulated by Treasury, adding that its "middle-class residents have also faced challenges for decades."
  • "This story of the middle class is not separate from the state of the economy. It's at the heart of it," she will say.

She will emphasize the results of the Biden administration's investments in infrastructure — in contrast to the ongoing joke about "Infrastructure Week" in the Trump years that was not accompanied by legislation.

  • "In the Trump administration, the idea of doing anything to fix it was a punchline," Yellen will say, according to excerpts first reported by our colleague Hans Nichols. "But this administration has delivered."

Meanwhile, top White House economic adviser Lael Brainard spoke on "place-based growth" this week, emphasizing that the economic benefits of the current expansion are being felt by places that have long been down at the heels.

What they're saying: "President Biden came to office determined to invest in all of America, to leave no community behind," Brainard said at the Brookings Institution on Monday. "It is working."

  • "Communities that had been left behind are making a comeback. In recent visits, the President has talked with workers, small business owners, and residents in communities like Allentown and Milwaukee where new jobs and new small businesses are creating hope," she said.

Of note: Brainard's speech did not use the term "Bidenomics," which had become a part of the administration's messaging last summer — but from which Biden allies have distanced themselves.

The bottom line: As the election takes shape, expect Biden's economic lieutenants to emphasize not just that the economy is solid overall but also to tell a story about who is benefiting.

2. What to watch in tomorrow's GDP report

Data: Commerce Department; Chart: Axios Visuals
Data: Commerce Department; Chart: Axios Visuals

Blockbuster growth in the third quarter of 2023 was almost certainly an outlier. The economy likely settled into a more moderate — though still healthy — period of growth in the final months of last year.

Driving the news: The GDP report, out tomorrow at 8:30am ET, is forecast to show that the economy expanded at a 2% annualized rate.

Why it matters: The data will provide the final economic snapshot of 2023 — a year that defied widely held expectations for a recession.

The intrigue: Some of the factors that resulted in booming growth in Q3 likely slowed or, in some cases, reversed.

  • That includes cooler consumer spending: Bank of America economists forecast this week that consumer spending rose at a 2% annual rate in Q4, compared to the 3.1% in Q3.
  • Meanwhile, the impact of inventory buildup likely reversed. The change in private inventories added 1.3 percentage points to growth last quarter.

Of note: RSM chief economist Joe Brusuelas wrote in a note that residential investment could get a boost on the back of falling mortgage rates, plus "housing starts and completions showed strong increases in the final months of the year."

The bottom line: The economy was resilient last year alongside cooler inflation. The big question is how much that continues in 2024.