Peter Schiff: Multiple Indicators Weaker than at the End of Biden's Term
Peter Schiff, Chief Economist at Euro Pacific Asset Management, refuted the claim by Kevin Hassett, Director of the White House National Economic Council, that "the U.S. economy is thriving," demanding specific metrics and stating that several key indicators are weaker than at the end of Biden's term.
Hassett has recently described the situation using phrases like "the overall economy is very prosperous" and "employment is a key number." The latest data from the Bureau of Labor Statistics shows that non-farm employment increased by 162,000 in August, with the unemployment rate steady at 4.1%; he attributed this to tariffs encouraging reshoring, capital expenditure stimulated by expensing investments, and an increase of about 90,000 jobs in factory construction since this administration took office.
Schiff's comparison point is the baseline at the end of Biden's term: at that time, the unemployment rate was about 4.0%, real GDP growth in 2024 is projected at about 2.8%, and the CPI increase in the 12 months before taking office was about 3.0%. He has previously pointed out that the full-year real GDP for 2025 is only about 2.1%, lower than any complete year during Biden's term.
Discrepancies in public data also appear in price and employment trends: the CPI year-on-year in June 2026 is about 3.5%, higher than the approximately 3.0% at the time of taking office; gasoline prices have risen above $4 per gallon; and from January 2025 to June 2026, non-farm employment increased by about 716,000, significantly slower than the approximately 2 million increase in the last 17 months of Biden's term.
Public opinion and the official narrative are also not aligned. Polls show that about 77% of respondents believe the economic situation is poor; Hassett interprets weak consumer confidence as a political variable and emphasizes that credit card spending "peaking," equipment investment, and factory construction are evidence of supply-side prosperity.
In market mechanisms, buyers are betting on capital expenditure, reshoring manufacturing, and risk assets, while sellers are hedging against inflation and fiscal expansion with bonds and gold. This is a pricing confrontation driven by political narratives: the White House uses employment and investment intentions to prove prosperity, while the bond market discounts growth with higher long-term yields and persistent inflation above 2%. Beneficiaries are heavy asset and construction chains that can convert tariffs and expensing investments into orders, while those under pressure are households whose real wages do not keep up with prices and rely on credit cards to maintain spending.
Source: Public Information
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Schiff is not new to this accountability game. He gained fame as a short seller during the housing and credit bubble of 2007-2008 and has since long linked dollar credit, fiscal deficits, and gold prices as part of the same trading chain; Euro Pacific and his gold brokerage determine that he defines "prosperity" in terms of real purchasing power and real bond yields, rather than just exceeding monthly non-farm expectations. Hassett, on the other hand, comes from the supply-side school and used tax cuts and capital expenditure to tell his story during Trump's first term, carrying the same narrative into tariffs and expensing investments in the second term.
As a result, capital pathways have split into two accounting systems. The White House's pathway is: tariffs raise the relative price of imports, expensing investments bring forward factory construction, capital expenditure is counted in GDP first, and employment is realized later. Schiff's pathway is: households use credit cards to sustain nominal consumption, fiscal and energy shocks keep CPI pinned above 3%, the term premium on government bonds rises, and growth is eaten away by interest rates. Money hasn't disappeared; it has merely shifted from wage accounts to interest, oil prices, and import substitution costs.
This analogy is not to the supply revolution of the early Reagan years, but closer to the 1970s phase of "official prosperity, market skepticism": during Nixon and Ford's times, employment and nominal spending were also used to prove prosperity until bond yields began to rise on their own. Currently, the Federal Reserve stabilizes policy rates as a tool, yet the 30-year Treasury bond has at times returned to highs not seen since 2007, indicating that pricing power has partially shifted from interest rate statements to the long-end market.
Structural changes belong to the transfer of pricing power. Prosperity is no longer defined by press conferences but by "which indicators can enter the next round of financing and Treasury auctions." The mechanism is that the political cycle requires high-frequency positive data, while bond and commodity markets reprice based on existing debt and energy shocks; when two sets of metrics coexist, the ultimate constraint on growth is long-term interest rates, not monthly non-farm data.
ABAB News · Law of Cognition
- Prosperity that cannot lower living costs is merely reported prosperity.
- The official selects indicators, while the market selects interest rates.
- Credit card peaks often reflect the other side of depleted savings.