Credit…Haiyun Jiang/The Recent York Times
Friday’s surprisingly strong jobs report offered a lift to President Biden, at a time when voters have soured on his management of the economy.
The report suggested the USA was not in recession, despite negative economic growth. And it underscored the strength of the labor market, which is the president’s biggest point of economic pride. The report, analysts from Capital Economics wrote in a research note on Friday morning, “appears to make a mockery of claims the economy is heading into, let alone already in, a recession.”
But the discharge from the Labor Department also contained warning signs for Mr. Biden about inflation, the difficulty that has kicked the legs out from his approval rankings this yr.
The continued hot pace of employment growth, together with faster-than-expected wage gains for employees, is prone to feed the Federal Reserve’s desire to aggressively raise rates of interest to choke off price growth. Those rate increases risk slamming the brakes on the economy and driving unemployment higher.
Mr. Biden celebrated the report on Friday, noting in an announcement that “within the second quarter of this yr, we created more jobs than in any quarter under any of my predecessors within the nearly 40 years before the pandemic.”
Mr. Biden’s approval rankings have slumped amid high inflation, although job growth is powerful and unemployment is low. He has repeatedly said that fighting inflation is his top economic priority, whilst he praises the strength of the labor market and boasts of the rapid return to low unemployment on his watch 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 in tension. They are saying that as a way to tame rising prices, the unemployment rate must rise, throwing thousands and thousands of Americans out of labor.
Mr. Biden and his aides insist that isn’t the case, arguing that the economy can downshift to slower job growth and lower inflation with unemployment staying low.
The president and his team have tried for months to portray a possible slowing of job growth as a healthy sign of the economy’s transitioning from a fast-growth, high-inflation recovery from pandemic recession and right into a recent era of slower growth with more stable prices.
Mr. Biden reiterated that on Friday. “Additional job growth from this strong position shall be slower,” he said. “That isn’t a nasty thing, because our economy should move to stable growth for the years ahead.”