The 'Fear of R' Holding Biden Back... 57% of Small Business Owners Predict US Economy Will Worsen Next Year

[Asia Economy New York=Special Correspondent Joselgina] As warnings of an economic slowdown surrounding the United States grow louder, they are becoming a stumbling block for President Joe Biden ahead of the midterm elections in November. Six out of ten small business owners in the U.S. expressed concerns that the economic situation will worsen next year due to inflation, supply chain disruptions, and interest rate hikes. In a public opinion poll, nearly 70% responded that the U.S. economy is bad, marking the highest level since President Biden took office.

The Wall Street Journal (WSJ) reported on the 22nd (local time), citing a survey by Vistage Worldwide, that 57% of small business owners answered that the U.S. economic situation will worsen next year. The proportion of small businesses expecting increased sales next year was 61%, nearly 20 percentage points lower than a year ago. WSJ stated, "Small and medium-sized enterprises often feel the impact significantly during an economic slowdown," adding, "Optimism is disappearing across various sectors, from manufacturing to consumer goods and services."

Large corporations are also under pressure from inflation and supply chain shocks at levels not seen in over 40 years. This was confirmed by the first-quarter earnings shocks from Walmart, Target, and others. Deutsche Bank predicted that the Federal Reserve's tightening measures to curb inflation will further increase the risk of a recession in 2023.

This atmosphere is negatively affecting the Biden administration ahead of the midterm elections. In a CBS broadcast poll released that day, 69% responded that the U.S. economy is bad, up from 63% in the previous survey (April). This is the highest level since President Biden took office. The percentage of respondents who said the U.S. situation is going badly also reached a record high of 74%. CBS reported, "Pessimism about the economy (68%), the stock market (67%), and inflation (77%) is high and growing." President Biden's approval rating stood at 44%.

Brian Deese, Chairman of the White House National Economic Council (NEC) and economic advisor to President Biden, did not rule out the possibility of the U.S. entering a recession during his appearance on CNN that day. When asked on CNN and Fox News Sunday whether the U.S. is slipping into a recession, he replied, "There is always that risk," and "There is no doubt that we are facing serious global challenges right now."

However, he argued that "there is also no doubt that we are in a better position than any other major country worldwide," and that the U.S. economy is in a transition from a 'strong recovery' to 'resilient growth.' Jared Bernstein, a longtime economic advisor to President Biden, also mentioned, "There are several key economic indicators emphasizing the strength of the U.S. economy."

WSJ diagnosed, "The White House is pursuing a strategy to highlight the bright spots in the economy," but added, "Since voters' economic concerns are high, this message carries a high risk of failure. The increasing risk of recession is becoming a new headache for President Biden."