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May 4 (UPI) -- President Joe Biden announced that the national debt is expected to shrink this quarter as he addressed economic growth, jobs and deficit reduction on Wednesday from the White House. His remarks came hours before the Federal Reserve ordered a half-point interest rate hike -- its largest in decades -- to counter surging inflation.
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Biden said the U.S. government will reduce the national debt for the first time in six years. The $23.9 trillion debt is expected to drop $26 billion this quarter, but will likely rise through the rest of the year.
Additionally, this year's budget deficit will drop $1.5 trillion.
"Bringing down the deficit is one way to ease inflationary pressures in an economy, where a consequence of a war and gas prices and oil, food and it all -- it's just a different world right this moment because of Ukraine and Russia," he said.
"The bottom line is the deficit went up every year under my predecessor before the pandemic and during the pandemic. It has gone down both years since I've been here. Why is it important? Because bringing down the deficit is one way to ease inflationary pressures."
The Fed last increased rates in March by a quarter-point for the first time since 2018. That followed two years of rate decreases and emergency actions to counter the COVID-19 crisis.
Earlier Wednesday, ADP and Moody's Analytics reported that the U.S. economy added almost 250,000 private jobs in April, missing expectations by about 130,000 hirings.
Most of the new jobs were created among larger companies and small businesses on the whole lost jobs last month.
The Labor Department will issue its April jobs report on Friday. Most economists expect that survey to show about 385,000 new hirings last month.
