Washington, Feb. 5 (BNA): The Associated Press reported that a dismal jobs report was preparing the White House for not arriving on Friday.
Instead, President Joe Biden got a pleasant surprise that the US economy moved through the omicron wave of the coronavirus and posted 467,000 new jobs in January — along with robust reviews of job gains in the previous two months. It showed how much the pandemic’s grip on the economy has eroded, even though the nation is still struggling with rising inflation.
“Our country takes whatever COVID must throw at us, and we’re back stronger,” Biden declared at the White House.
The jobs report indicated that the United States has entered a new phase in its recovery from the epidemic. It capped what looked like a week’s return for the president.
Also on Friday, the House of Representatives passed a bill to stimulate production and development of computer chips, a major step in settling differences with an earlier measure approved by the Senate. A day earlier, outside the economy, the administration announced that US forces had raided the home of the Islamic State leader, prompting Abu Ibrahim al-Hashimi al-Quraishi to blow himself up.
Jason Furman, an economist at Harvard University and a former White House adviser to Obama, said the jobs report showed employers and workers had moved past the chaos caused by the pandemic.
The virus “is now one of many and no longer the dominant factor,” Forman said. He noted the broad strength across 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 vulnerable to disruption from the pandemic.
However, as the economy strengthens, the question for Biden personally – and his presidency – is whether he can convincingly combine the positives to revive his support that has fallen in the polls last year.
Who – and what – gets the credit?
The infection caused by Omicron caused millions of Americans to lose work, leading to expectations that the economy lost jobs in January. However, when the numbers showed the virus was having little effect, Republicans were quick to offer an alternative narrative — that the job gains reflect the expiration of unemployment benefits added with a push from Biden and Democrats months ago.
“Now that there is no longer a barrier to action in the form of Democrats’ unemployment benefits and monthly stimulus checks, Americans are finally moving away from the sidelines,” said Texas Representative Kevin Brady, the ranking Republican on the House Ways and Means Committee. .
Jobs aside, Biden acknowledged that things aren’t quite so rosy. Inflation remains a huge challenge, with consumer prices up 7% over the past year.
However, the strong jobs report may give the Federal Reserve a reason to raise interest rates and back off its support for the economy to bring down inflation. Average hourly wages rose 5.7% in January from a year ago, indicating that demand for workers is leading to higher incomes and possibly more sources of inflation.
A strong labor market should make it easier for the Fed to raise interest rates without disrupting growth too much, said Joe Brusolas, chief economist at RSM Consulting. Workers will likely come out of the pandemic more productive than before, making it easier for growth to happen even with higher interest rates.
“Given the fact that corporate profits have continued to rise at a robust rate even as wages are increasing rapidly tends to suggest that the business sector and the US economy are in the midst of a productivity boom,” Brusolas said. “This strongly means that the economy will be able to absorb future price hikes in a better way than is currently recognized.”
Biden on Friday tried to make a play for the record books — touting the gains made under his leadership. With an unemployment rate of 4% and 6.6 million jobs added in its first full year, he makes his case that the $1.9 trillion coronavirus relief package was a wise choice and that lawmakers now must support the rest of his agenda to prolong growth.
“History is made here,” Biden declared, “and it comes along with the largest drop in unemployment in a single year ever, the largest reduction in child poverty ever recorded in a single year. And the strongest economic growth this country has seen in nearly a decade. 40 years old.”
AOQ