Joe Biden signed a bill on Saturday to suspend the US debt ceiling, ending a months-long standoff with the Republican House speaker, Kevin McCarthy, and averting a federal default that could have upended the world economy.

Economists warned that a default could have caused the US unemployment rate to double while significantly damaging gross domestic product.

In a televised address from the Oval Office on Friday evening, Biden said: “Passing this budget agreement was critical. The stakes could not have been higher.

“If we had failed to reach an agreement on the budget, there were extreme voices threatening to take America, for the first time in our 247-year history, into default on our national debt. Nothing, nothing would have been more irresponsible.”

The signing of the bill came one day after the Democratic-held Senate passed it in a bipartisan vote, 63-36, sending the proposal to Biden’s desk a few days before the 5 June deadline. A day earlier, the bill passed the Republican-controlled House by 314-117.

“It was critical to reach an agreement, and it’s very good news for the American people,” Biden said on Friday. “No one got everything they wanted. But the American people got what they needed.”