The White House has received a ‘Goldilocks’ jobs report as they seek to underpin the economy
As White House officials prepare the final jobs report before the midterm elections come out Friday morning, the last thing they want to see is a surprise employment number.
It’s a political paradox that comes with the last major economic data before Election Day — one that finds Democrats desperately trying to make up ground on the economy.
The U.S. economy added 261,000 jobs in October — more than 200,000 jobs that economists had predicted but still at the upper end of the range White House officials had expected to see entering Friday, which was 150,000-300,000.
It was a “Goldilocks” result for the White House — a number that’s not too low, but not too high.
The new data “shows that our jobs recovery remains strong,” Biden said in Friday’s jobs report. He dismissed Republican criticism that the economy is heading for a recession, continuing to receive low ratings from voters on inflation.
“One thing is clear: While the Republican leadership’s comments seem to point to a recession, the U.S. economy is growing and gas prices are falling, adding jobs.” It is still “our greatest economic challenge.”
It’s a far cry from just a year ago, when the U.S. economy was adding jobs every month at an eye-popping clip: more than 650,000 jobs in October and November, nearly 600,000 in December, and 714,000 new jobs two months later. In February.
President Joe Biden and his economic team have known for months that slowing the economy is necessary to avoid the widespread rate hikes that have given Republicans a big advantage on what has consistently been the most important issue to voters.
Biden and his top advisers have taken pains since the summer to emphasize their rationale for shifting from major job gains to an economic picture described as “steady and stable” growth.
It’s a message aimed at tempering expectations more than a year after the rapid hiring pace was announced, but it’s a goal seen by officials as necessary to preserve most of the benefits they normally enjoy.
At its heart is Biden’s most significant economic achievement: a dramatic recovery from the pandemic-induced economic crisis on his first day in office. More than 10 million jobs have been added since Biden’s inauguration and unemployment rose from 3.5% to 3.7% on Friday.
The combination of continued job gains and a return to quarterly growth sit at the center of Biden’s argument that, despite nationalism, the US economy is neither in recession nor in recession.
“Our economy is strong as hell,” Biden told reporters last month.
But the tight labor market has exacerbated the rate hikes that have kept Democrats in control of the House and Senate. That, in turn, has prompted the Federal Reserve to trigger four consecutive jumbo rate hikes, including the most recent three-quarter-point move this week.
Fed Chairman Jerome Powell said at a news conference after the policy announcement that the labor market was “very, very strong” because the rapid rate of inflation had not materially slowed.
“So it could take time. It could take time. It could take patience. It could derail inflation,” Powell said of the Fed’s actions.
Biden has made it clear publicly and privately to the group that the Fed is an independent entity and will not face any political pressure from the administration to deliberately slow the US economy.
But White House officials are well aware that the stated goal of a “soft landing” where the central bank tightens economic conditions significantly to bring down inflation is tough, but not enough to bring the economy into a miserable recession, a needle for debate.
However, they saw signs that it might be the result.
“I believe there is a way to achieve this while maintaining a very healthy labor market,” Treasury Secretary Janet Yellen told CNN in an interview. “And I believe we are on that path.”
But that path includes clear signs of a “calm and stable” environment that would leave officials with more modest job opportunities, or more room for tough federal action.