Biden isn’t out of the woods on the economy yet despite job growth, experts say

Even as President Joe Biden Although he spoke positively Friday morning about the strong jobs report, it was possible that bad news could follow next week.

Biden spoke at White House The economy added 311,000 jobs in February which could help to lead to the Federal Reserve It will pursue aggressive interest rate increases in an effort to control inflation.

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“Inflation has been down for many weeks in a row now, and as I said, we’ll see blips of it going up, but I feel confident that we’re headed in the right direction,” Biden said. “We’ll see what the Fed will do.”

Biden’s comments were focused on strong job growth and low unemployment. However, he insists that America is thriving. We are moving in the right directionsThat quote was in response to the one question that the president received from a reporter.

It was all about interest rates.

“Are you concerned that rising interest rates will put a damper on this job growth and impact the economy?” The reporter was curious.

Professor Gerald Friedman, University of Massachusetts economist, says that this should be a concern for the president.

“If the Fed reads low unemployment as a threat of excessive wage growth and rising inflation, it could respond by raising rates further,” Friedman stated. “Should that happen, the effects probably won’t be felt for about another year. That would put things at March 2024, and that is potentially very bad news for President Biden.”

Friday’s Bureau of Labor Statistics report provides some reassurance regarding the economy’s strength, at least for the near-term. The following are the figures: Unemployment As more people joined the labour force, the rate rose to 3.6%.

According to the personal consumption expenditures index (PIE), inflation rose to 5.4% in January. This is more than twice the Fed target rate of 2.2%. Strong job growth suggests that the figure will rise when new numbers are released next week. It was described by the White House as “sticky inflation.”

Fed Chairman Jerome Powell During congressional testimony this week, he stated that high inflation reports and persistently strong jobs growth could lead to rates going higher and staying there longer. The odds of a Fed rate hike by half a point or more rose to 60% after his speech, according the FedWatch tool of CME Group.

At some point, these rate hikes will start to affect.