Friday’s surprisingly strong jobs report gave President Biden a boost as voters have soured his management of the economy.
The report suggested that the United States was not in recession, despite negative economic growth. And it underlined the strength of the labor market, the president’s greatest point of economic pride. The report, analysts at Capital Economics wrote in a research note Friday morning, “appears to mock claims that the economy is headed for recession, let alone already in recession.”
But the Labor Department press release also featured warning signs for Mr. Biden about inflation, the issue that kicked his approval ratings this year.
The continued high pace of employment growth, along with faster-than-expected wage increases for workers, are likely to fuel the Federal Reserve’s desire to aggressively raise interest rates to curb price growth. Those percentage increases run the risk of slowing down the economy and driving up unemployment.
Mr Biden celebrated the report Friday, noting in a statement that “we created more jobs in the second quarter of this year than in any quarter under any of my predecessors in the nearly 40 years before the pandemic.”
Mr Biden’s ratings have fallen amid high inflation, although job growth is strong and unemployment low. He has repeatedly said that fighting inflation is his top economic priority, even as he praises the strength of the labor market and boasts of the rapid return to low unemployment awaiting him after the pandemic recession in 2020.
But some economists, such as Lawrence H. Summers, a former Secretary of the Treasury, have warned that Biden’s dreams of lower inflation and continued job growth are under strain. They say that to tame rising prices, the unemployment rate must rise, leaving millions of Americans out of work.
Mr Biden and his associates insist this is not the case, arguing that the economy could shift back to slower job growth and lower inflation while unemployment remains low.
The president and his team have spent months trying to portray a possible slowdown in job growth as a healthy sign of the economy’s transition from a fast-growing, high inflation recovery from a pandemic recession to a new era of slower growth with more stable prices.
Mr Biden reiterated that Friday. “Additional job growth from this strong position will be slower,” he said. “That’s not a bad thing, because our economy has to move towards stable growth in the coming years.”