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Friday’s surprisingly strong jobs report gave President Biden a boost at a time when voters soured on his handling of the economy.
The report suggested that the United States was not in recession, despite negative economic growth. And that underscored the strength of the labor market, which is the president’s greatest economic pride. The report, Capital Economics analysts wrote in a Friday morning research note, “appears to poke fun at claims that the economy is headed for, let alone already, a recession.”
But the Labor Department statement also contained warning signs for Mr. Biden regarding inflation, the issue that has knocked legs off his approval ratings this year.
The strong and steady pace of job growth, along with faster-than-expected wage gains for workers, should fuel the Federal Reserve’s desire to aggressively raise interest rates to stifle price growth. These rate hikes are likely to bring the economy to a screeching halt and push up unemployment.
Mr. Biden celebrated the report on Friday, noting in a statement that “in the second quarter of this year, we created more jobs than in any quarter under any of my predecessors in the nearly 40 years before the pandemic”.
Mr Biden’s approval ratings have fallen amid high inflation, even as job growth is strong and unemployment low. He has repeatedly said tackling 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 under his leadership after the pandemic recession in 2020.
But some economists, like Lawrence H. Summers, a former Treasury secretary, have warned that Mr. Biden’s dreams of lower inflation and continued job growth are under strain. They say that to rein in rising prices, the unemployment rate must rise, throwing millions of Americans out of work.
Mr Biden and his aides insist that is not the case, arguing that the economy can retrograde to slower job growth and lower inflation as unemployment remains low.
The president and his team have tried for months to present a potential slowdown in job growth as a healthy sign of the economy’s transition from a fast-growing, high-inflation recovery from the pandemic recession and into a new era of slower growth with more stable prices. .
Mr. Biden reiterated this on Friday. “Additional job growth from this strong position will be slower,” he said. “That’s not a bad thing, as our economy should be on a path of steady growth for years to come.”