Unemployment Falls, Biden Takes Credit Despite Lingering Economic Concerns

Ben ZeisloftFebruary 3, 2023

Unemployment As the number of people who are new to the market fell in January, Jobs drastically exceeded analysts’ forecasts, according to Data The Bureau of Labor Statistics published Friday.

Total nonfarm employment increased by 517,000, far surpassing analysts’ expectations of 187,000 new positions. The unemployment rate fell from 3.5% in December, to 3.4% in January. This is below the estimates of 3.6%. It marks the lowest level of joblessness since 1969.

“The stronger than expected employment report stands in direct conflict with fears of an imminent recession, which has been weighing on the minds of economists and business leaders alike,” Greg McBride, Senior Economic Analyst at Bankrate, stated in comments to The Daily Wire. “The strength of the January employment report will raise eyebrows among Federal Reserve officials who’ve pledged to keep interest rates higher for longer.”

The central bank provided the unemployment data. Announced The target federal funds rate was increased by 0.25%, which is a decrease from the previous rate increases of 0.75% or 0.5% to combat inflation. Federal Open Market Committee members said in a Statement That “ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive.”

The average hourly wage rose 4.4% in January, slightly more than analysts expected and less than the 4.6% pace recorded in December. The price levels have risen faster than nominal wages in the last two years, suggesting a decline in household purchasing power.

The leisure and hospitality sector added 128,000 jobs, while the professional and business service sector added 82,000 and government agencies added 74,000.

While unemployment is continuing to fall, labor force participation has not recovered in the wake the lockdown-induced recession. The metric, which tracks how many people are currently working or looking for work, was unchanged at 62.4% in Jan. Jerome Powell, Federal Reserve Chair has Remarks That the workforce “participation gap” It is mostly due to “excess retirements” That was beyond all reasonable expectations. “what would have been expected from population aging alone.”

Many products and services continue to be expensive. While food and shelter prices have increased 10.4% & 7.5%, respectively, headline inflation has decreased due to a recent decline in some energy prices, according the Data Source: Bureau of Labor Statistics

Biden administration officials still claim credit for the employment gains, despite the lingering inflationary pressures as well as supply chain bottlenecks that have emerged from the tight labor markets. Karine Jean-Pierre, White House Press Secretary, recently reported deflected questions Journalists asked about layoffs in technology and they noted that dismissals “remain near record lows according to job openings data.”

President Joe Biden Responded To the newly released unemployment data on social networks by declaring that “jobs are going up, inflation is going down, and my economic plan is working.”

Jason Smith, Chairman of House Ways and Means Committee (Republican from Missouri), stated in a statement to The Daily Wire that “the state of the economy doesn’t reflect the reality.” “false advertising” From the administration. “Any job growth is good news, but labor force participation is still disappointingly below pre-pandemic levels,” He made a comment. “Democrats’ war on work made sitting at home and collecting a check more profitable than getting a job. Better policies are needed for stronger job and wage growth.”