Employers added 353,000 of jobs in January, crushing expectations, news that could aid President Joe Biden reelection efforts at a time when the electorate is uncertain as to whether he is the best person to handle the U.S. economy.
Biden, who called the U.S. economy the "strongest in the world" on Friday, has struggled to convince voters that he is the most capable person to manage the economy ahead of the November election. A poll this week showed that, even though they see improvement in the economy, 55 percent of voters disapprove of Biden's job performance.
But the latest jobs data, along with revelations that the economy grew in the fourth quarter, could boost Biden's standing among the electorate. Hiring was broad-based as wages also jumped, the U.S. Bureau of Labor Statistics said on Friday. Unemployment stood at 3.7 percent.
"Today, we saw more proof, with another month of strong wage gains and employment gains of over 350,000 in January, continuing the strong growth from last year," Biden said in a statement. "Our economy has created 14.8 million jobs since I took office, unemployment has been under 4 [percent] for two full years now, and inflation has been at the pre-pandemic level of 2 [percent] over the last half year."
Analysts said the strong economy was changing the way Americans are feeling about their financial conditions, which could help Biden, as voters said that the economy is a top issue for them ahead of the election.
On Friday, Surveys of Consumers at the University of Michigan showed in its updated January data that consumer sentiment was at the highest level since July 2021.
"For much of 2023, consumers had reserved judgment about the inflation slowdown and whether it would persist," Joanne Hsu, Surveys of Consumers chief economist, said in a statement shared with Newsweek. "Over the last two months, consumers have finally felt assured that their worst fears for the economy would not come to pass."
Biden has argued that his policies have helped the U.S. economy recover from the shocks of the COVID-induced crisis. After inflation soared coming out of the pandemic, at one point hitting a 40-year high of above 9 percent in the summer of 2022, the Federal Reserve instituted aggressive rate hikes that pushed up borrowing costs for homes loans, car purchases and business investment.
The central bank's rate hikes appear to have helped lower inflation without damaging the labor market and causing a recession, as some experts expected.
"Few economists expected job gains to remain this strong when high interest rates were needed to bring down inflation," Robert Reich, a former Labor Secretary during the Clinton administration, wrote on Substack. "But inflation is way down....Jobs growth continues to roar. Economic growth is good. Wages are moving in the right direction."
Economists say trends suggest that the economy is reaching a soft landing, a scenario in which inflation cools amid elevated rates without leading to mass layoffs.
"This economy has softly landed and is relaxing at its destination," Nela Richardson, research institute ADP's chief economist, said this week after announcing that private employers hired more than 100,000 people in January.
Analysts suggest that the government's policies are part of the reason the labor market has been resilient.
"We're seeing more signs that fiscal policy has helped push more workers into higher-wage, higher-productivity jobs," Skanda Amarnath, executive director of Employ America, said in a note shared with Newsweek. "Policies geared at scaling industrial investment and achieving full employment are delivering historically impressive macroeconomic outcomes."
Some data suggests that in swing states—where polls show Biden trailing former President Donald Trump in the 2024 race—the incumbent's economic policies dubbed Bidenomics may be working, as unemployment, gas prices and inflation have fallen.
"Huge beat in jobs, wages rising robustly, prime-age employment growing," Bharat Ramamurti, a former Biden economic adviser, said in a note shared with Newsweek. "It's the Energizer Bunny economy—it just keeps growing and growing and growing."
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
