President Biden cheered Friday’s blockbuster jobs report as evidence that the American economy has remained strong on his watch — and shows no signs of slowing down.
Employers added an explosive 517,000 new jobs in January, nearly three times the number that economists expected.
“Today’s data makes crystal clear what I’ve always known in my gut: critics and cynics are wrong,” Biden said. “Our plan is working because of the grit and resolve of the American worker.”
The Labor Department report also said more jobs were added in November and December than previously thought, meaning a sizzling 4.8 million jobs were created during 2022.
Along with 8 million more jobs in 2021, that means Biden has seen 12 million more people earning a paycheck since he first punched in for work at the White House.
“That’s the strongest two years of job growth in history, by a long shot,” Biden boasted.
The White House is sure to keep crowing over the rosy numbers as Biden prepares for his State of the Union address on Tuesday.
Unemployment dropped to a rock-bottom 3.4%, a figure not seen since May 1969, two months before astronaut Neil Armstrong walked on the moon.
The jobs juggernaut proves there is little threat of a recession anytime soon and that the U.S. economy is still revving in overdrive despite an aggressive series of Federal Reserve interest rate hikes.
“Any concern the economy is in recession or close to a recession should be completely dashed by these numbers,” said Mark Zandi, chief economist at Moody’s.
Inflation has eased significantly since it roared up to a four-decade high last year.
But with companies struggling to find and keep workers, the report is likely to keep the Federal Reserve raising rates to make sure higher wages don’t juice prices more.
The Fed has been on a rate-raising rampage for the past year. Just this week, it raised them by 0.25%, a relative pause after previously jacking them up by as much as 0.75% several times last year.
The fact that the labor market is on fire will give it little reason to stop or slow the pace of hikes.
Higher rates are designed to cool off economic activity by raising the costs of borrowing money for companies and individuals. That in turn brings inflation down.
But high interest rates can do serious damage to consumers by making it tougher to buy homes and cars, and pay off debts.
Those concerns left Wall Street wondering whether the report would be as good news for corporate profits as it is for Americans’ pocketbooks.
The worries sent the Dow Jones Industrial Average down modestly along with the S&P 500 and Nasdaq.
January’s hiring was broad-based across industries. A category that includes restaurants and bars added 99,000 workers. Professional and business services jobs, including bookkeepers and consultants, rose by 82,000.
Wage growth was also strong, although perhaps a hair under what might have been expected given the hiring rampage.
Average hourly pay rose 4.4% last month from a year earlier, slower than the 4.8% year-over-year increase in December.
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