President Biden insisted mixed news from the Labor Department on Friday on the country’s labor market is evidence that his economic recovery plan is working.
The Labor Department’s jobs report revealed that the U.S. economy added 261,000 jobs in October, but the unemployment rate inched up to 3.7% from a five-decade low of 3.5%. While the job numbers were better than what Wall Street analysts had predicted, the unemployment rate was higher than expected.
Despite the mixed results, Mr. Biden insisted the results were good news headed into next week’s midterm election. He said the Labor Department data “shows that our recovery remains strong.”
“With jobs now added every single month of my presidency … one thing is clear: while comments by Republican leadership sure seem to indicate they are rooting for a recession, the U.S. economy continues to grow and add jobs,” he said in a statement.
The 261,000 jobs added in October is the smallest monthly gain for the U.S. economy since December 2020. However, it does exceed the historic average of 183,000 jobs added per month over the course of the decade before the COVID-19 pandemic, according to Labor Department data.
The moderating numbers also gave some investors hope that the Federal Reserve, which has been aggressively pushing up interest rates in hopes of cooling off inflation, now has a better chance of pulling off a “soft landing” for the economy that will avoid a recession early in the new year.
All three major U.S. stock markets were up significantly as the job numbers were being digested, with the Dow Jones Industrial Average jumping nearly 500 points, or just over 1.5%, in morning trading.
“In an ironic way, a mixed report is probably a good report for the market because it shows the economy’s not falling off a cliff.” Keith Lerner, chief market strategist at Truist Advisory Service, told CNBC.
Average hourly earnings ticked up 0.4% in October, up from 0.3% in September, the Labor Department reported. While earnings were up 4.7% from the previous year, it is still a decrease from September’s numbers, the Labor Department said. That signals that wage growth is still being nullified by higher inflation rates for the average worker..
Despite hailing the jobs numbers, Mr. Biden acknowledged that inflation remains the “top economic challenge” facing his administration.
‘Let me be clear. We’re going to do what it takes to bring inflation down. But as long as I’m president, I’m not going to accept an argument that the problem is that too many Americans are finding good jobs,’ he said in a statement.
Republicans have slammed Mr. Biden for not doing enough to lower inflation, saying his expensive government spending programs have contributed to rising costs. Republican National Committee Chairwoman Ronna McDaniel slammed what she called the “worst [monthly] jobs report of the Biden presidency,” and predicted Democrats will suffer at the polls as a result.
“Biden’s agenda has wreaked havoc on families trying to get by,” Ms. McDaniel said in a statement. “Lower real wages, higher taxes, and out-of-control inflation have made it tougher for Americans to get ahead. In a few short days, voters will send a clear message that they have had enough of Democrats’ radical agenda.”
Mr. Biden countered with his midterm pitch that Republicans want to cut Social Security and Medicare to give tax cuts to the rich, which he insists will damage the economy.
“The Republican plan is very different. They want to increase prescription drug costs, health insurance costs, and energy costs, while giving more tax breaks to big corporations and the very wealthy. Here’s the deal: Cutting corporate taxes and allowing big pharma to raise prices again is the Republican inflation plan and it’s a disaster,” the president said.
Rising prices are expected to hurt Democrats in next week’s midterm election, giving Republicans a strong chance of flipping one or both chambers of Congress.
Inflation hit a 41-year high of 9.1% in June and was 8.2% in September. It has remained stubbornly high even as the government tries to get it under control with moves like aggressive interest rate hikes.
A Quinnipiac University poll released Wednesday that inflation is the most urgent concern of voters in the upcoming election. The poll revealed that 36% of Americans said inflation was their top concern, up nine percentage points from the same poll in August.
The poll found that 54% of Americans said the price of gas and consumer goods is the most concerning economic issue while 25% said it was the cost of housing or rent, 12% said the stock market, and 5% said their job situation.
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