Biden sees US economy outpacing pandemic

WASHINGTON (AP) — That dark jobs report the White House had prepared never arrived on Friday.

Instead, President Joe Biden was pleasantly surprised as the U.S. economy weathered the coronavirus omicron wave and posted 467,000 new jobs in January — along with sharp revisions to job gains over the past two previous months. It showed how the grip of the pandemic on the economy has faded, although the country is still struggling with high inflation.

“Our country is taking everything COVID has thrown at us, and we’ve come back stronger,” Biden said at the White House.

The jobs report suggests that the United States has entered a new phase in its recovery from the pandemic. And it capped off a sort of comeback week for the president.

Also on Friday, the House passed a bill to revive the production and development of computer chips, a key step in reconciling differences with an earlier measure approved by the Senate. And a day earlier, outside the economy, the administration announced that US forces had raided the Islamic State leader’s home, leading Abu Ibrahim al-Hashimi al-Qurayshi to blow himself up.

Harvard University economist Jason Furman, a former White House adviser to Obama, said the jobs report showed employers and workers had weathered the ravages of the pandemic.

The virus “is now just one factor among many and is no longer the dominant factor it used to be,” Furman said. He pointed to the general strength of the report and the addition of 151,000 jobs in the leisure and hospitality sector – restaurants, hotels, entertainment and more in an area of ​​the economy most likely to be disrupted by the pandemic.

Still, as the economy strengthens, a question for Biden personally — and his presidency — is whether he can cogently piece together the bright spots to rekindle his support that has waned in the polls over the past decade. last year.

Who – and what – gets the credit?

Omicron infections had caused millions of Americans to miss work, suggesting the economy would shed jobs in January. Yet when the numbers showed the virus had little impact, Republicans were quick to offer an alternative narrative — that job gains reflected the expiration of unemployment benefits added with a push from Biden and of his Democrats months earlier.

“Now that there’s no roadblock to work in the form of unemployment bonuses from Democrats and monthly stimulus checks, Americans are finally coming off the sidelines,” said Texas Rep. Kevin Brady, the ranking Republican on the House Ways and Means Committee. .

And, jobs aside, Biden acknowledged that things weren’t quite rosy. Inflation remains a major challenge, with consumer prices rising 7% over the past year.

The jobs report, however, could give the Federal Reserve reason to raise interest rates and withdraw support for the economy to reduce inflation. The average hourly wage rose 5.7% in January from a year ago, suggesting that the demand for workers is driving higher incomes and possibly more sources of inflation.

Joe Brusuelas, chief economist at consultancy RSM, said the strength in the labor market should make it easier for the Fed to raise rates without disrupting growth too much. It is possible that workers will emerge from the pandemic more productive than before, which will facilitate growth even if interest rates rise.

“Given that corporate profits have continued to grow at a healthy pace even as wages have been rising rapidly, this implies that the US business sector and economy are in the midst of a productivity boom,” Brusuelas said. “This strongly implies that the economy will be able to absorb future rate hikes in a better way than is currently recognised.”

Biden attempted to gamble for the record books on Friday – touting the gains made under his watch. With 4% unemployment and 6.6 million jobs added in its first full year, he argues his $1.9 trillion coronavirus relief package was a smart move and lawmakers should now support the rest of its program to prolong growth.

“History was written here,” Biden said. “It comes with the largest single-year drop in the unemployment rate on record, the largest reduction in child poverty on record in a single year. And the strongest economic growth this country has seen in nearly 40 years.

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