But new economic data released last week appeared to bolster the administration’s case, with the Labor Department reporting Friday that 372,000 new jobs were created in June while the jobless rate held steady at 3.6%, among lowest rates ever recorded. White House economists point out that it is too early to claim victory, as the central bank is expected to continue trying to calm the economy with further interest rate hikes. But administration officials stressed that the strong pace of hiring suggests an economic downturn is not yet hitting the country.
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“I think if you want to talk about recession nervousness, you should check out today’s jobs report. Numbers like this are just very inconsistent with any kind of call for recession,” Jared Bernstein, a member of the White House Council of Economic Advisers, told MSNBC shortly after the report was released. job Friday. “When you generate 350,000 jobs on average in the last quarter – no recession.”
Voters’ frustration over the economy has proven to be one of the administration’s most persistent challenges over the past year, with huge swaths of the electorate angry at rising taxes. price. Inflation in May hit 8.6%, a 40-year high, with energy costs in particular crushing US consumers, in part due to the disruption caused by Russia’s invasion of Ukraine. Biden’s approval ratings on the economy have fallen steadily amid inflation, which has plagued the administration since officials first dismissed it as “transitional” last year.
More recently, the White House feared that the economy could slip from inflation into recession, if the central bank were forced to rein in the economy too quickly. But there, too, Biden’s aides saw encouraging signs. Gasoline prices have fallen steadily over the past three weeks from their June highs, while mortgage rates – after hitting around 6% – have fallen. U.S. manufacturing has surpassed pre-pandemic levels. Stock indices, after falling in the worst first six months of every year since 1970, have appeared to stabilize in recent weeks.
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Additionally, annualized wage growth fell from 4.6% to 3.8% from May to June, a healthy sign amid expanding labor supply, according to economist Adam Ozimek. chief at the Economic Innovation Group, a nonpartisan business organization. That suggests labor is growing to meet higher demand, reducing inflationary pressures, Ozimek said — rather than demand contracting in the face of a smaller labor force. Bernstein also said the deceleration in wage gains “is very much in the spirit of what the president is talking about when he talks about moving from breakneck economic growth to a smoother, more stable transition.” . Bharat Ramamurti, Deputy Director of the White House National Economic Council, posted a meme on Usher’s Twitter teasing the media for exaggerating recession fears.
“While the situation is not necessarily worse, the mood around economic management in the White House is much worse than it was even when many of these same people were trying to navigate the economy at most depth of the financial crisis. It seemed dark and difficult to navigate politically, even at the scale of the damage,” said an outside White House adviser, speaking on condition of anonymity to describe private conversations with officials. administration officials “But it’s a day when nothing bad happened.”
Other economists see more mixed evidence in recent data. Economic growth has also become faltering, with the country’s gross domestic product contracting in the first quarter of this year and expected to do so again in the second quarter, according to many analysts. The mismatch between strong employment and weak economic growth is unusual, but suggests a potential slowdown outside the labor market.
And Skanda Amarnath, executive director of Employment America, a left-leaning think tank, pointed out that one of the two jobs surveys showed potentially worrying signs. The payroll survey, which contacts businesses, showed the healthy improvement. But the other, less cited survey, which asks households, showed mixed results for the third consecutive month. This household survey showed a drop in jobs in April, a slight increase in May, then a drop of 315,000 in June.
“We have a survey that tells you everything is fine, and there is another survey that shows at least stagnant progress after showing tremendous progress last year,” Amarnath said. “I don’t think there is a reason to panic, but there is a reason to be on high alert. The labor market is slowing down in this survey.
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Amarnath added: “The trend has shifted from a meteoric recovery to stagnation, or at least less improvement. Maybe April to June will turn out to be a stroke of luck. … But we’re in the middle of a downturn, and we have to be careful about the claims we make about the state of the economy.
Yet the White House projects confidence. “The strength of this labor market is historic,” Brian Deese, chairman of the White House National Economic Council, said in an interview on MSNBC. Deese pointed out that the U.S. private sector has now recovered all of the private sector jobs lost during the pandemic, calling it a “significant milestone.”