As White House officials geared up for the final jobs report ahead of the midterm elections due out Friday morning, the last thing they wanted to see was an explosive hiring number. .
It is the political paradox that hovered over the last great economic data element before election day – a it comes at some point which finds Democrats desperately trying to catch up on the economy.
The U.S. economy added 261,000 jobs in October — more than the 200,000 jobs economists had predicted, but still at the upper end of the range White House officials had hoped would be heading into Friday, which was around 150,000 to 300,000.
It was a “Goldilocks” result for the White House – a number that’s not too low, but not too high.
Biden announced Friday’s jobs report, saying the new data “shows our jobs recovery remains strong.” He dismissed criticism from Republicans that the economy is heading into a recession as he continues to receive low ratings from voters for his handling of inflation.
“One thing is clear: While comments from Republican leaders seem to indicate they are entrenched in a recession, the U.S. economy continues to grow and create jobs even as gas prices continue to fall,” Biden said in a statement, reiterating that inflation remains “our number one economic challenge.”
That’s a far cry from just a year ago, when the U.S. economy was creating jobs each month at a breathtaking rate: more than 650,000 jobs in October and November, nearly 600,000 in December, followed two more later by 714,000 new jobs. in February.
President Joe Biden and his economic team have known for months that a cooling economy is a necessity to crack the pervasive price increases that have given Republicans a significant advantage on the issue that voters consistently cite as the most important.
Biden and his top advisers have struggled since the summer to underscore their rationale for transitioning from major job gains to an economic picture defined by “steady and stable” growth.
It’s a message meant to temper expectations after more than a year defined by the rapid pace of hiring, but also a goal seen by officials as a necessity in order to protect many of the gains they routinely tout.
At the heart is Biden’s most important economic success: a dramatic job recovery from the pandemic-driven economic crisis he entered on his first day in office. More than 10 million jobs have been added since Biden’s inauguration and unemployment fell from 3.5% to 3.7% on Friday.
The combination of continued jobs gains and a return to quarterly growth is central to Biden’s assertion that, despite the austere national mood, the US economy is not in or on the precipice of a recession.
“Our economy is strong as hell,” Biden told reporters last month.
However, the tight labor market has exacerbated soaring prices that have jeopardized Democrats’ grip on their House and Senate majorities. That, in turn, prompted the Federal Reserve to trigger four consecutive jumbo rate hikes, including the latest three-quarter point move this week.
Fed Chairman Jerome Powell in his press conference after the policy announcement pointed to a labor market that “is just very, very strong” as the central reason why rapid rate increases n have not materially hindered the price spike.
“So it may take time. It may take resolution. It may take patience. Inflation is likely to come down,” Powell said of the effect of Fed actions. “I think you see from our forecasts and others that it will take some time for inflation to come down.”
Biden has made it clear publicly — and to his team privately — that the Fed is an independent entity and will face no political pushback from his administration as it attempts to intentionally chill the US economy.
But White House officials are also keenly aware that the stated goal of a “soft landing” where the central bank manages to significantly tighten economic conditions to bring inflation down, but not enough to tip the economy in a painful recession, is a difficult task. threading needle.
They see indications that this is a possible outcome, however.
“I think there’s a way to do that while still maintaining a very healthy job market,” Treasury Secretary Janet Yellen told CNN in an interview. “And I believe we are on that path.”
But that path includes officials rooting for more modest job gains, or clear signs of a “steady and stable” environment that would create more room for the Fed’s difficult task.