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What's going right for President Biden

Yahoo Finance's Rick Newman discusses a few of President Biden's victories amid high inflation and other headwinds.

Video transcript

KARINA MITCHELL: Here with more is Yahoo Finance's Rick Newman. And Rick, those GDP numbers today can't hurt.

RICK NEWMAN: Yeah, Biden's already bragging about it. Those were the-- we had the strongest GDP growth-- this is real GDP growth-- after accounting for inflation, the strongest since 1984. That still counts as a pretty good rebound from the previous year when the economy shrank. So Biden can legitimately say, look, we have strong economic growth. I think the economic trends going into 2022 are pretty good. We are going to see a slowdown probably in hiring from the omicron surge in the first month or two of the year.

But the unemployment rate is at 3.9%. The lowest it got prior to the pandemic was 3.5%. We're almost back to that record low in unemployment. And it's plausible we could get that low or go even lower at some point within the first half of 2022, so. And there are some other things going on that are actually pretty good. I mean, the underlying trends actually look pretty good. We've got to get through the Omicron surge. And then the other big wildcard is inflation. And it's just not clear where that's going to go this year.

ALEXIS CHRISTOFOROUS: You know, I just want to ask you quickly on inflation and how it's played out in other presidencies because I know it was bad news for Carter and for a few other presidents along the way. There's not much the White House can do to rein it in, but it is about the perception. And this year, we've got midterm elections. How do you think, you know, Joe Biden is going to try to fight back, along with the Fed?

RICK NEWMAN: Well, I think inflation at this point is Biden's biggest problem for sure. And part of the reason is what you just pointed out, Alexis. There's nothing he can do about it, or not much he can do, anyway. It's hard to make this comparison with other presidents because we haven't really had inflation since the 1970s. I mean, it's been a non-factor, really, for most of the last 40 years. There's still a good chance that inflation will improve as the economy just gets back to normal, as these supply chain kinks get unwound, as we get back to normal spending patterns and people start to spend more of their money on travel and going out, and demand on goods subsides a little bit.

I think the best the White House can do at this point is, is, Biden needs to continually talk and indicate that he recognizes the problem, and then nibble at it around the edges. Continue to do the stuff to get the ports operating more efficiently and get the goods flowing, but just keep telling people he gets it and maybe just, you know, let that seem as if it is his single-minded focus for 2022 because inflation probably is the thing that will affect Democrats' election prospects the most in 2022.

ALEXIS CHRISTOFOROUS: Yeah, for sure, OK, a story to be continued. I want to ask the big takeaway here from this report out from Slack showing that, I guess, we shouldn't be surprised here, too, after two years of this pandemic that hybrid has now become the dominant work model for most workers globally. What can you tell us about that?

RICK NEWMAN: Right, this is a consortium that's backed by Slack. It's called Future Forum. And they've been doing quarterly surveys of knowledge workers, so people in the tech fields, data analytics, basically white collar workers. And the employment trends here are basically very good. They found the majority of these workers now say they are working in some kind of hybrid arrangement, some combination of working at an office and working from home. And about 2/3 of them say that's what they want.

So I think what that tells us is that employers and their workers are actually adapting pretty well to challenges posed by COVID. This survey also asks people about different types of well-being on the job. They have eight different things they measure, such as your sense of productivity, your sense of belonging to the company, are you getting the resources you want. And on every one of those eight measures during the last year, the employee response has gotten substantially better.

So I think this is great news for the economy because it tells us that people are figuring out how to live with COVID, and then that some of the work arrangements we've come around to getting used to are actually perhaps better than what we had before. So this suggests that this part of the workforce, at least-- this may not include a lot of blue collar workers, but this part of the workforce actually seems to be thriving and might end up in a better position after COVID than it was in before COVID.

KARINA MITCHELL: All right, we'll have to leave it there. Rick Newman, thank you so much.

RICK NEWMAN: Bye, guys.

ALEXIS CHRISTOFOROUS: All right, bye, Rick. Thanks for stopping by.

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