Friday’s surprisingly strong jobs report provided a boost to President Biden, at a time when voters were nervous about his management of the economy.
The report pointed out that the United States is not in a recession, despite negative economic growth. He highlighted the strength of the labor market, which is the president’s greatest economic pride. The report, which analysts from Capital Economics wrote in a research note Friday morning, “appears to make fun of claims the economy is heading into, not to mention already stagnant.”
But the statement from the Labor Department also contained warnings to Biden about inflation, the issue that has pushed legs off his approval rates this year.
The persistently hot pace of employment growth, along with faster-than-expected worker wage gains, is likely to fuel the Federal Reserve’s desire to aggressively raise interest rates to stifle price growth. These rates increase risk, put the brakes on the economy, and lead to higher unemployment.
Biden celebrated the report Friday, noting in a statement that “in the second quarter of this year, we created more jobs than any quarter of my predecessors in the nearly 40 years before the pandemic.”
Biden’s acceptance rates have fallen amid rising inflation, although job growth is solid and unemployment is low. He has repeatedly said that fighting inflation is his top economic priority, even as he praises the strength of the labor market and brags about a swift return to low unemployment on his reign after the pandemic recession in 2020.
But some economists, such as Lawrence Summers, the former Treasury secretary, have cautioned that Biden’s dreams of lowering inflation and continued job growth are fraying. They say that in order to tame rising prices, the unemployment rate must rise, putting millions of Americans out of work.
Biden and his aides insist that is not the case, arguing that the economy could shift to slower job growth and lower inflation while the unemployment rate remains low.
The president and his team have been trying for months to portray a potential slowdown in job growth as a healthy signal of the economy’s transition from a fast-growing, high-inflation recovery from pandemic stagnation to a new era of sluggish growth with more stable prices. .
Mr. Biden repeated that on Friday. “Additional job growth from this strong position will be slower,” he said. “That’s not a bad thing, because our economy should transition to stable growth for the coming years.”
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”
The Dow fell 530 points as banks led the Fed’s sell-off; Apple, 5 Titans mask market weakness
Equity investors are trading cautiously ahead of the Fed’s interest rate decision
4 reasons to hike, 4 reasons to get up for a walk