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(Bloomberg) — The latest good news and bad news about the US economy is just plain bad news for Joe Biden.

Given time to digest Thursday’s GDP report, most economists looked past the weak headline number and declared the underlying momentum of the US economy remained strong. But growth and jobs — which have been surprisingly sturdy for more than a year — have generated little tangible benefit to Biden’s hopes for reelection. 

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What they did generate was more of the one thing that has truly stung Biden: inflation.

“This is a lose-lose for the president,” said Stuart Paul, an economist at Bloomberg Economics. “He doesn’t get to realize the benefit of the hot growth because it’s coming at the cost of high inflation and interest rates. This economic resilience is borderline a problem for Biden.”

The report comes at a perilous time for the president’s campaign. Americans were already sour on economic conditions, and research suggests that voters begin to make up their minds about the direction of the economy about six months before an election — right about now.

A Bloomberg News/Morning Consult poll of voters in seven battleground states this month showed that more than half expect the economy to be worse by the end of the year. And at least half of voters say they expect the inflation rate and borrowing costs to rise even higher than they are now.

Read More: Biden’s Gains Against Trump Vanish on Deep Economic Pessimism

As a result, the Biden campaign has largely retired the “Bidenomics” branding that used to define his economic case for reelection and is emphasizing issues like abortion rights and protecting democracy.

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Inflation Revived

How different it seemed just three months ago. An aggressive campaign of interest-rate increases by the US Federal Reserve appeared finally to be bringing inflation to heel. After peaking above 7% in June of 2022, the central bank’s favorite gauge of prices, the personal consumption expenditures index, or PCE, tumbled all the way to 2.4% in the 12 months through January. 

Remarkably, the drop in inflation came without damaging growth or employment. GDP outpaced all predictions by expanding 2.5% in 2023, and unemployment wowed forecasters by remaining below 4%.

On the growth side, the latest data fell in line with that trend. Headline GDP fell to 1.6%, but that was partly due to a drawdown in inventories and a wider trade gap. Economists were quick to point out that a truer metric of underlying demand, one that strips out inventories, trade and government spending, rose at a healthy 3.1% pace. 

Read More: US Economy Slows and Inflation Jumps, Damping Soft-Landing Hopes

Unfortunately for the president, inflation’s decline now looks badly derailed. Monthly inflation figures since January have largely flattened. And Thursday’s report showed that core PCE — which excludes volatile food and energy — rose by an annualized 3.7% in the first quarter, it’s first acceleration in a year.

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As recently as April 10, Biden stood by his prediction that the Federal Reserve would cut interest rates — which are at a two-decade high — before the end of the year. Yet with the latest economic data in hand, policymakers may be more likely to further delay cuts and may even face pressure to consider whether borrowing costs are high enough.

It’s also getting harder for Biden to avoid getting blamed for rising prices. At it’s peak, inflation was clearly driven by the supply-side snarls triggered by the coronavirus pandemic. Those problems have largely been resolved. What remains appears more linked to demand, driven in part by deficit spending. 

Biden helped usher a series of measure through Congress during his tenure that intends to bolster American manufacturing, renew infrastructure and fight climate change. 

According to Jason Furman, a former adviser to President Barack Obama, those programs have a chance to accomplish all that in the longer term, making them solid investments. But in the short term, the giant price tag is doing two things: It’s adding to growth, for which Biden gets little credit, and it’s spurring the inflation that damages his standing.

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“If there was a huge spending program to dig and refill holes, the macroeconomic impact would probably be pretty similar to what we’ve seen,” he said.

This is a devilish combination for Biden, who has tried hard to make the case for why “Bidenomics” has helped the average American. 

“The administration can certainly spell out a case for why their policies, along with legislation passed by Congress, has laid the groundwork for spurring this post-pandemic economy,” said Sarah Binder, a senior fellow at the Brookings Institution in Washington.

But, she added, with inflation dominating Americans’ experience of the economy, and also because of the polarization that has divided the electorate, he’s getting little credit. 

White House Press Secretary Karine Jean-Pierre said the GDP report showed “steady and stable growth,” and that the cumulative increase under the first three years of the Biden administration is still higher than any presidency since Bill Clinton.

“But look, we’re always going to be very clear there’s more work to do,” she said Thursday. “Fighting inflation, we’re going to continue to do that.”

The role of demand in inflation also makes solving it that much more difficult for Biden.

“Declining inflation and interest rates would be good for voters and for President Biden,” said Bloomberg Economics’ Stuart. “But the thing that would get the Fed to cut rates is really bad economic data.”

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