July jobs report suggests Biden is right about recession

The strong jobs report was welcome news for President Biden, who has insisted in recent weeks that the United States is not in a recession, even though it has suffered two quarters of economic contraction.

But the report also defied even the president’s own optimistic expectations about the state of the labor market — and seemed to contradict the government’s theory of where the economy is headed.

Mr Biden celebrated the report on Friday morning. “Today the unemployment rate is the lowest in more than 50 years: 3.5 percent,” he said in a statement. “There are more people working than ever in American history.”

He added: “There is more work to be done, but today’s jobs report shows that we are making significant progress for working families.”

The president has said for months that he expects job creation to slow rapidly, along with wage and price growth, as the economy moves into a more stable state of slower growth and lower inflation.

“If average monthly job creation shifts from its current level of 500,000 to something closer to 150,000 over the next year,” Mr Biden wrote in an op-ed for The Wall Street Journal in May, “it will be a sign that we are moving successfully. to the next stage of recovery – as this kind of job growth is consistent with low unemployment and a healthy economy.”

White House officials this week prepared reporters for the possibility that job growth may have cooled, in line with Mr Biden’s expectations. The number of jobs that blew expectations seemed to surprise them again.

But Mr Biden will almost certainly cite the numbers as evidence that the economy is a long way from a recession. He and his associates have repeatedly said in recent weeks that the current pace of job creation is out of step with the number of jobs in past recessions, and it’s proof that a contraction in gross domestic product doesn’t mean the country is in a downturn.

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