Friday’s surprisingly strong jobs report offered a boost to President Biden, at a time when voters have soured on his management of the economy.
The report suggested that the United States was not in recession, despite negative economic growth. And it underscored the strength of the labor market, which is the president’s biggest point of economic pride. The report, analysts from Capital Economics wrote in a research note on Friday morning, “appears to make a mockery of claims the economy is heading into, let alone already in, a recession.”
But the release from the Labor Department also contained warning signs for Mr. Biden about inflation, the issue that has kicked the legs out of his approval ratings this year.
The continued hot pace of employment growth, along with faster-than-expected wage gains for workers, is likely to feed the Federal Reserve’s desire to aggressively raise interest rates to choke off price growth. Those rates increase the risk of slamming the brakes on the economy and driving unemployment higher.
Mr. Biden celebrated the report on Friday, noting in a statement that “in the second quarter of this year, we created more jobs than in any quarter under any of my predecessors in the nearly 40 years before the pandemic.”
Mr. Biden’s approval ratings have slumped amid high inflation, even though job growth is strong and unemployment is low. He has repeatedly said that fighting inflation is his top economic priority, even as he praises the strength of the labor market and boasts of the rapid return to low unemployment on his watch after the pandemic recession in 2020.
But some economists, like Lawrence H. Summers, a former Treasury secretary, have warned that Mr. Biden’s dreams of lower inflation and continued job growth are in tension. They say that in order to tame rising prices, the unemployment rate must rise, throwing millions of Americans out of work.
Mr. Biden and his aides insist that is not the case, arguing that the economy can downshift to slower job growth and lower inflation with unemployment staying low.
The president and his team have tried for months to portray a potential slowing of job growth as a healthy sign of the economy’s transition from a fast-growth, high-inflation recovery from pandemic recession and into a new era of slower growth with more stable prices. .
Mr. Biden reiterated that on Friday. “Additional job growth from this strong position will be slower,” he said. “That is not a bad thing, because our economy should move to stable growth for the years ahead.”