Biden Says 'The Landing Is And Will Be Soft,' Economists Wary: US Economy 'The Envy Of The World'

In his State of the Union address, President Joe Biden praised the resilience of the U.S. economy, despite global economic challenges.

What Happened: Biden, in his address on Thursday, highlighted the strength of the U.S. economy, which has defied expectations of a recession. The President pointed out that despite concerns about the country’s financial state, the U.S. economy is “the envy of the world.”

"The landing is and will be soft," Biden said.

He noted that the U.S. economy has shown remarkable resilience, with inflation dropping from 9% in January and unemployment remaining below 4% for the longest period since the 1960s.

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This came as the European economy narrowly avoided a recession last year due to the central bank’s efforts to combat inflation, which led to stagnation in the region’s production. China, the world’s second-largest economy, faced significant challenges in 2023, including trade restrictions, government crackdowns on industry, a massive real estate crisis, and a surge in youth unemployment.

Why It Matters: The U.S. economy’s performance has been a topic of debate among economists. Apollo Management’s chief economist, Torsten Sløk, expressed concerns about the possibility of a soft landing for the U.S. economy, a scenario he previously championed. He now sees it as the least likely outcome.

Citi’s chief economist, Andrew Hollenhorst, also dismissed the soft landing narrative for the U.S. economy, indicating underlying factors suggesting trouble ahead. He believes the U.S. economy is heading for a recession in 2024.

Goldman Sachs CEO David Solomon has also cautioned investors against placing too much trust in the Federal Reserve’s capacity to orchestrate a "soft landing" for the U.S. economy amidst the ongoing battle against inflation.

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