Remarks in a Virtual Roundtable Discussion With Business Leaders on the National Economy
The President. Hello, folks. Can they hear me up on the stage there?
Well, let me begin by saying I apologize for being a little late. There's a vote going on right now that I've a mild interest in. [Laughter] And I apologize for keeping you waiting.
First of all, I want to thank the CEOs from some of America's leading companies, from technology to financial services, to travel and retail. And I'm—we're hear—I'm going to—we'll hear directly about the outlook for their businesses in the economy, from their perspective, and how we transition from a historic economic recovery to a stable, steady growth and lower inflation, without letting go of all the historic gains we've made over the last 18 months.
But before we get started, I want to say two things about the GDP report we received this morning. First, it's important to start with what we know before this morning's report. Our job market remains historically strong. Our economy created more than 9 million jobs since I came to office, in no small part because of the people on this stage. Our economy created more than 1 million jobs in the second quarter, the same period as today's GDP report covers. And our unemployment rate is 3.6 percent, near a record historic low.
Secondly, households and businesses—the engines of our economy—continue to move forward. Just this past week, SK Group from Korea was here at the White House to announce $22 billion in new investment in semiconductors, advanced batteries, and electric vehicle chargers, and medical devices. That's on top of the $200 billion in clean energy investments in America from other businesses since we took office. All powering the strongest rebound in American manufacturing in three decades.
Now, there's no doubt we expect growth to be slower last—than last year, and—for the rapid clip we had. But that's consistent with a transition to a stable, steady growth and lower inflation. There's going to be a lot of chatter today on Wall Street and among pundits about whether we are in a recession.
But if you look at our job market, consumer spending, business investment, we see signs of economic progress in the second quarter as well. And yesterday's Fed Chairman—the Fed Chairman Powell said—made it clear that he doesn't think the U.S. economy is currently in a recession. He said, quote, "There are too many areas" of economic—where "the economy [is] performing too well." He said "too" well—T-O-O. Too well. [Laughter]
He pointed to the labor market as an example. The best thing we can do right now is put our economy in a better position to make the transition to stable, steady growth for Congress to—and is—steady, stable growth is for Congress to act; that's the best thing we can do. They're voting right now, as I said.
I applaud—the bipartisan effort to get the CHIPS Act to my desk to sign into law, which would advance our Nation's competitiveness and technological edge by boosting our domestic semiconductor production and manufacturing.
Another Congress should do with—another thing that Congress should do is to pass the Inflation Reduction Act to lower prescription drug costs, which would reduce the deficit, I might add, and help ease inflationary pressures and ensure that 13 million Americans can continue to save an average of $800 per year in their health care premiums.
Both of these bills are going to help the economy continue to grow, bring down inflation, and make sure we aren't giving up on all the significant progress we've made in the last year.
I'm going to stop there and begin the meeting. But thanks to the CEOs for joining me. And let me start with you, Brian. And thanks for taking all my phone calls, pal. [Laughter] The Bank of America.
I want to ask you a question: Your bank serves many Americans across the country. What are you seeing right now in terms of financial health of your consumers? What's the bank records tell you about the financial health?
Bank of America Chair of the Board and Chief Executive Officer Brian Moynihan. Well, thank you, Mr. President. It's good to see you recovering. [Laughter]
The President. Thanks.
Mr. Moynihan. But, at Bank of America, we have, you know, 60 million consumers and 35 million core checking accounts for Americans. And so a couple of key points: Number one, they're spending more money. Through the first 25 days of July 2022, they have spent 10 percent more than they spent in July of 2021, the first 25 days. And that's consistent with what we saw in the whole second quarter in earlier this year.
[At this point Mr. Moynihan continued his remarks, concluding as follows.]
So right now they're doing what we want them to do, which is being employed. Some of the stresses in the system—there's no discounting that, and we're trying to help all those customers through this stress. But that stress has been mitigated by the work that your administration, prior administrations, did to help people through the pandemic and also just the strong employment that you spoke about.
The President. Well, Brian, thanks a lot. I really do appreciate your—and thanks for always being available for your input. I appreciate it a great deal.
And now I have a question for the CEO of Marriott, who is very disappointed to hear they're investing in travel. [Laughter] It's of great concern to Tony.
It's—Tony—[laughter]—the travel and hospitality industry is experiencing and did experience tremendous hardship during the pandemic. But the recovery now is experiencing—is a very different experience. It's—things look really up for your industry right now.
And what would—how would you describe the industry today? And how do you see the path of demand through the end of the year? I know that's—you can't know—nothing is guaranteed, but what's your sense?
Marriott International Chief Executive Officer Anthony Capuano. Well, thank you, Mr. President, for the invitation today. I think what we've learned over the last couple quarters is really the resilience of travel. And when we look at our forward-booking data, we see real evidence of that resilience.
And what's interesting, we think about our business through three demand segments: leisure, business travel, and group. The recovery has clearly been led by leisure. And in fact, last year, leisure demand got back to where we were prepandemic. But what's encouraging is we're seeing real recovery in the other two segments. Business transience has been a slower recover—recovery, but as we see more and more folks returning to the office, we see continued improvement. And maybe the biggest surprise has been the pace at which group demand has come back. And we——
The President. Group demand?
Mr. Capuano. Group, correct. And we fully expected social group to recover quickly with all of the canceled weddings and bar mitzvahs and family reunions. But now we're seeing strong and consistent recovery in business group travel as well. So quite encouraging.
[Mr. Capuano continued his remarks, concluding as follows.]
And maybe I'll just close by thanking your administration and, in particular, Secretary Raimondo for your work to eliminate the inbound international testing requirement. We think that's going to be very impactful in the travel and tourism sector. And in fact, the U.S. Travel Association just came out and said they expect the direct impact of that change to be an incremental, more than 5 million visitors to the U.S. in the balance of this year, spending more than $9 billion.
The President. Well, that—I mean, that sounds pretty encouraging overall, not just for this summer, but looking forward.
One of the things I want to ask you about is that the—obviously, the pandemic had a profound negative impact. But right now, as I look out there—and I've traveled around the world a lot of late, going to various conferences—there seems to be a willingness or an inclination for business to travel more.
To—instead of everybody sitting and Zooming everything, it seems to me, in-person movement of personnel and businesses around the country—and I see it more around the world, quite frankly—seems to be on the up. Is that accurate, or is that just a perception?
Mr. Capuano. It is, Mr. President. And in fact, we see two principal drivers. I think, number one, businesses that are customer-facing—consulting firms, law firms, accounting firms—they will tell you that the best way for them to optimize their business is to be in person, embedded in their customers' offices every day.
The President. Yes.
Mr. Capuano. And I think the last few years have reminded us of the power of in-person interaction.
The other thing we see is rapidly growing demand for training. Many employers across this country rely heavily on the strength of their corporate culture. And as they're hiring thousands of new employees, it's really hard to immerse those employees in a culture via Teams or Zoom. And so the demand we see rising for in-person training has been quite significant.
The President. Well, I don't want to get off on this. Corning would know something about this. But there's so many new jobs on the horizon in the tech-related field that the need to train personnel to be able to handle these jobs is totally within our capacity, but it's needed. It's not like it's on-the-job training for a lot of these things.
And so one of the things we're looking at—our economic team, Secretary—is how we engage everything from community colleges to other entities to train people for the need that exists in that community—in that community.
And so it's totally consistent with what you're saying, because there are going to be—and we're talking about potentially a lot of jobs. I mean, we're talking about thousands of jobs. And—but again, a lot of it requires some, you know, training; it's not all on-the-job training.
Well, I'm—thank you very much for talking to me about that, Tony. And——
Mr. Capuano. Thank you.
The President. And now I—what I'd like to do is—there's an outfit called Corning. Right, Wendell? [Laughter] And you're the CEO of a great company.
And look, you know, we've seen an inflection point in U.S. manufacturing over the last—the last year. And by that I mean—you know, I can recall in the last administration—I'm not criticizing the last administration—the previous 4 years—and even at the end of our administration, Obama-Biden, the question was: "Are we still going to be the manufacturing hub of the world? Are we still—you know, are we—in manufacturing, where are we going to sit? We're going to do all these other things, but what about manufacturing?"
And—and so you've seen, in that inflection point, manufacturing in the U.S. Can you describe for me what you're seeing at Corning? What's your outlook on the manufacturing sector? Talk to me a little bit about that, if you could.
Corning Inc. Chairman of the Board and Chief Executive Officer Wendell P. Weeks. Sure, Mr. President. First of all, you're right: The last 18 months has been tremendous growth for U.S. manufacturing. And we've seen that in our results. And that continues, but there's some subtle things going on as well. We just did our quarter two earnings, so the numbers are fresh in my mind.
[Mr. Weeks continued his remarks, concluding as follows.]
Think smartphones. Smartphones in quarter two were down about 11 percent year over year. So pretty strongly. Auto—been depressed for a long time, mostly on supply chain basis. Demand has been there. But there's interesting signals in global demand. In April, there were zero cars sold in Shanghai. Okay?
The President. Zero?
Mr. Weeks. Zero. COVID lockdowns. But zero is a really low number, right?
The President. No, I—yes.
Mr. Weeks. I mean. [Laughter] In Europe—[laughter].
The President. COVID lockdown or not. [Laughter]
Mr. Weeks. In Europe, in June, we had the lowest number of new car registrations that we've seen since 1996. So we're a global player. So it's the whole global economy, so it's harder for us to, you know, pick on what is in the U.S., Europe, Asia.
[Mr. Weeks continued his remarks, concluding as follows.]
Solar demand we see going forward unabated, and we'll also expand in that. But consumer seems soft to us.
The President. Yes. Well, you know, one of the things that—my father was in the automobile business his whole life. Ran a major dealership, a General Motors dealership. And you know, growing up as a kid, you knew whether cars were selling or not—[laughter]—based on tuition or whatever things.
But all kidding aside, I was—I knew, but I never had tried to visualize, how critical the high-quality computer chips were for an automobile. And a significant part of the slowdown that occurred when it hit is inflation—the cost of automobiles—because people are not buying them, also because they cost so damn—and there's so few of them. They're not manufacturing nearly what they were able to manufacture in the past because of the fact of these lack of computer chips.
But it's not just automobiles; it's anything—you know, phones, cell phones—a whole range of—whereas, I found it interesting you talking about how, you know, on the fiberoptic piece, that is moving. But how much of that do you think is related to the fact that we put in an infrastructure bill that provided billions of dollars for connecting the internet, for having the ability to access the internet because we're making it available, quite frankly, with all the money we're spending to make it available to every home in America, every neighborhood?
I mean, I'm not sure I'm asking the question properly. I think you know what I'm trying to get at.
Mr. Weeks. Yes.
The President. So talk to me about the difference: demand relating to where we fund it—and we're talking the fiber optics needed to deal with everything from solar to broadband in communities that don't have it now.
I mean, one of the things I found was that—and the four of us have talked about this a lot—five of us have talked about this—is, you know, in the middle of the pandemic, seeing—going by a McDonald's and seeing a bunch of families sitting out there in the parking lot not eating a hamburger, but connecting to the internet because they had no access to internet so their kid could get access to the schooling they needed.
So talk to me a little bit about how much of this is driven by the inability to afford it or the lack of desire to get it, and how much is driven by, when the Government is invested in it, it makes a difference. I'm not sure I'm asking the question. You know what I'm talking about.
Mr. Weeks. I totally understand your question, Mr. President. It's a very good question. So the direct impact of the BEAD program, or the Government effort to connect the unconnected, in this year, direct impact is very low. That really starts to come into its power next year.
But there's also an indirect impact, which is the commitment of the Government and of the administration to making sure we build the infrastructure that's required. Really does make a difference in the behavior of all the players.
The President. Yes.
Mr. Weeks. So what we're seeing, though, is just strong demand from our carrier customers, because they want to be the ones that connect folks.
The President. Yes
Mr. Weeks. And they're building out 5G, new tech, which needs a lot more fiber optics than 4G. And then cloud computing also needs a lot more fiber.
[Mr. Weeks continued his remarks, concluding as follows.]
But if that goes through, you can expect that to trigger not just the direct Government piece, but by providing that leadership, others will come in with much more serious money—right?—to be able to magnify it. So it has—it's hard to answer your question. It's a great question, but it's a very subtle effect.
The President. Well, I think you've answered it, because one of the things the Secretary has talked about is that when the Government is in on something that everyone acknowledges is useful and needed, like, you know, the fiberoptic changes, then everybody goes, "Well, maybe"—
[A White House aide handed the President a note.]
You're trying to tell me something, huh?
Oh, so far, we've got 217 "yes" votes for the CHIPS bill, and the House has passed it. [Applause]
Sorry for the interruption.
But, Madam Secretary, talk a little bit about what private-sector attitudes change, if they do, if the United States—if the Government is taking a risk and a chance on betting on by putting their dollars where their—their money where their mouth is, in terms of what needs to be done.
Secretary of Commerce Gina M. Raimondo. Yes. First of all, congratulations. That is huge. I don't want to——
The President. We've been trying a long time. [Laughter]
Secretary Raimondo. Yes, we have been. And you—the President has been amazing in his leadership on this. So thank you. Thank you.
The President. You can tell I'm a lawyer. I don't know anything about anything. [Laughter]
Secretary Raimondo. You know how to lead. And that makes a difference.
This is a perfect example: semiconductors. I mean, the private sector is waiting for a signal, and they want predictability. There's nothing that unlocks private capital like predictability. So when the—right? I mean, when the Government steps up and says, "We're going to invest in infrastructure, solar, chips," it provides predictability and investments. And I—it will encourage, I think, a lot of private-sector capital to follow along.
Not to mention the fact that what we're investing in—semiconductors, broadband, roads, bridges, solar—we need this. You know? We need this to compete, as we talk about. So I think it's very significant.
The President. I'm taking too much time asking you all these questions, but you're—I have great interest in your—can I ask, Janet—Secretary Yellen—how would you characterize now—and you've been very, very straightforward in your views on everything—how would you characterize the health of the economy now?
Secretary of the Treasury Janet L. Yellen. Well, thank you, Mr. President. I think I would say let's first look back at the trajectory of the economy over the last 18 months. During that period, the United States has experienced an historic economic recovery. There were 9 million jobs created—over 9 million last year. And we saw the fastest single-year decline in unemployment in our historic record.
[Secretary Yellen continued her remarks, concluding as follows.]
And I believe that in the months to come, with skill and luck, it will be possible to maintain that strength, particularly the strength we enjoy in the labor market, while easing the tightness that has been driving inflation.
The President. Well, you know, there's an old expression. A baseball coach of the Dodgers, years ago—Leo Durocher—said, "I'd rather have Lady Luck sitting on my bench than skill." [Laughter] My grandfather, who was an All-American football player at Santa Clara in the turn of the century, he'd say, "No, I'd rather have luck and skill on the bench." [Laughter] So we're looking for both.
Secretary Yellen. We're looking for both.
The President. Let me just say, before I yield to you, Brian, and we can move on to the rest of the folks here: It's interesting and totally understandable why the vast majority of the American people have no idea what the recovery plan did, what the Government did at all.
I mean, the reason why we still had teachers in school, kids going to school, the reason why we had cops on the beat, reason why you had essential workers—States couldn't afford it, cities couldn't afford it, towns couldn't accord [afford]* it, counties couldn't afford it. So we came up with this Rescue Plan and gave them billions of dollars to keep the economy in their cities and towns and States moving.
And one of the things when I—and I fully understand it. Like I said, I was raised in one of those households where when the price of a gallon of gasoline went up, it was a topic of discussion around the kitchen table. And we weren't poor, we were just typical middle class family in a three-bedroom house with four kids and a grandpop. But all kidding aside, it was—and we lived fine, but it was—it mattered. It mattered whether the price of gasoline went up.
One of the things that I find is—I look at and I take it very seriously the confidence level of the American people in the economy. And they're so down and they're looking—there's reason to be down, but I started thinking about it. And, Brian, you and I talked about it just a little bit. You know, the first year, we were able to, with the Rescue Plan, we were able to send them a check for 8 grand. I mean, a check. One—and beyond that, by the way; there was more than that.
But when you're making—if you're making 120 grand and you get a check for 8 grand, that's a lot of money. And so it helped—saved a lot of people, in terms of getting thrown out of their homes and rental housing and a whole range of things.
But I started thinking about it, just as, you know, somebody who was raised as a middle class kid. One year, even though you didn't have the job you have now, even though you didn't get a raise that year, the difference between having a job, having a 5-percent raise or whatever—3, 5, 7, whatever it happens to be—in the face of inflation, the price at the pump—although that's down every day so far. But you know, it's like, "Whoa, I feel worse off." But then again, I didn't get a check for 8 grand from the Government. They just—among other things. Does that make any sense to anybody, or is it just me?
Secretary Yellen. Well, it really makes a huge difference, Mr. President, because, as you said, it kept food on the table, helped people take care of their kids, especially at a time when many were out of school and it was hard to work. And the spending it generated put people back to work.
And you know, as I mentioned, we've seen the long—you know, the biggest stretch of job creation that got America back to work. And we need to bring down inflation, but we need to preserve the success that that plan achieved in the labor market.
The President. I know you're all busy as the devil, especially the folks who haven't had a chance to speak yet. I'm sorry I have so many questions, but I have great respect for your collective judgment here.
Brian, I'm yielding to you. I'm going to shush up.
National Economic Council Director Brian C. Deese. Yes, we're going to transition here and move the press out.
[Reporters exited the room, and the roundtable discussion continued. No transcript was provided.]
NOTE: The President spoke at 2:38 p.m. in the South Court Auditorium of the Dwight D. Eisenhower Executive Office Building. In his remarks, he referred to Council of Economic Advisers Chair Cecilia E. Rouse. He also referred to his brothers Francis and James and his sister Valerie Biden Owens; and H.R. 4346. Joining the President in the South Court Auditorium were Secretaries Raimondo and Yellen, Director Deese, Chair Rouse, Mr. Capuano, and Mr. Weeks. Also participating were Thasunda Brown Duckett, president and chief executive officer, TIAA; and Punit Renjen, global chief executive officer, Deloitte.
* White House correction.
Joseph R. Biden, Remarks in a Virtual Roundtable Discussion With Business Leaders on the National Economy Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/356998