Joe Biden's White House economic advisor Gene Sperling steps down to join Kamala Harris' campaign
WASHINGTON, DC: One of President Joe Biden's key economic advisers, Gene Sperling, has announced his departure from the White House.
On Monday, August 5, Sperling revealed his intention to leave his position and instead join Vice President Kamala Harris' 2024 presidential campaign.
Joe Biden praises Gene Sperling's contributions
In a statement on Monday, President Biden confirmed Gene Sperling's resignation, lauding his qualifications and contributions.
"Gene joined my administration as the only person to have ever directed the National Economic Council under two presidents, and has helped me execute a rescue plan that has led to one of the most equitable and resilient economic recoveries ever," Biden stated.
The president elaborated on Sperling's achievements, noting, "His work helped nearly 40 million working families get unprecedented child tax cut relief and over 8 million renters get emergency assistance to help keep their families housed. Under Gene's leadership, the American Rescue Plan has delivered economic relief to cities and counties across the country, protected millions of union pensions, made the largest-ever federal investment in public safety, and kept thousands of small businesses afloat."
Biden also expressed gratitude towards Sperling's family, saying, "They should know our nation is stronger and more just because of the families that Gene has spent every day fighting for over the past three-and-a-half years."
Before Sperling's announcement, stock markets across Asia experienced significant declines on Monday due to weak US jobs data, raising fears of a potential recession in the world's largest economy.
The global market turmoil was triggered by a report released on Friday indicating that the US economy added only 114,000 jobs last month, far fewer than anticipated. Additionally, the jobless rate climbed to its highest level since October 2021.
Despite these concerns, the US economy continues to grow, albeit at a moderate pace. The Bureau of Economic Analysis reported that real gross domestic product (GDP) increased at an annual rate of 2.8% in the second quarter of 2024, following a 1.4% growth rate in the first quarter.
Global economic concerns and pandemic programs
Several factors contribute to the global economic anxiety, including ongoing tensions in the Middle East and disappointing earnings reports from major technology firms, which have heightened investor doubts about the returns from AI investments.
According to the Associated Press, Sperling's collaboration with Harris dates back to her tenure as California's attorney general during the Obama administration, where he frequently consulted with her as an outside adviser. During Biden's presidency, they worked together to promote the monthly payments for the child tax credit, among other policies.
The pandemic programs spearheaded by Sperling had a significant impact, halving child poverty with tax credits benefiting 40 million families and providing rental assistance to 8 million people.
However, Republican critics argue that the pandemic aid contributed to higher inflation, an issue that has plagued the Biden administration as many voters struggle with the rising costs of groceries, housing, and gasoline.
Financial markets opened Monday with a selloff due to the weaker-than-expected jobs report, raising concerns about the US economy's resilience.
Since Biden took office, prices have increased by more than 20%. To combat inflation, the Federal Reserve has raised the federal interest rate range to 5.25%-5.5%. Although inflation has slowed, prices have not decreased. While job creation had remained steady, unemployment reached 4% over the summer.
Expert opinions
Many experts anticipated a downturn on Monday following the release of the disappointing US jobs data on Friday.
Greg McBride, Bankrate's chief financial analyst, commented, "While Friday’s employment report was disappointing, it wasn’t the only worrisome economic indicator, only the latest.
Couple economic concerns with the cacophony of earnings disappointments and weak corporate outlooks, global unrest, and currency gyrations, and you have the recipe for sudden volatility."
The weak jobs data also triggered the "Sahm rule," a historically accurate recession indicator. Bill Adams, chief economist at Comerica Bank, said, "The July jobs report is being viewed as a recession warning, and the markets are responding accordingly."
Despite these challenges, the White House maintains that inflation is a global issue. Chief of Staff Jeff Zients emphasized that Sperling's efforts "produced the strongest economy in the world."
North Carolina Governor Roy Cooper described Sperling's work as "generational investments" and praised his collaboration with states to implement these programs effectively, AP reported.
