As White House officials prepare for the final jobs report before the midterm elections set to be released Friday morning, the last thing they want to see are blowout hiring numbers.
That’s the political paradox that emerged in the last piece of economic data before Election Day — which comes at a time that finds Democrats scrambling to build the economy.
The U.S. economy added 261,000 jobs in October – more than the 200,000 job economists predicted but still landing at the upper end of the range White House officials expected to see on Friday, around 150,000-300,000.
It’s a “Goldilocks” result for the White House — a number that’s not too low, but not too high.
Biden released the jobs report Friday, saying the new data “shows that our job recovery remains strong.” He rejected criticism from Republicans that the economy was headed for recession as he continued to receive low marks from voters on his handling of inflation.
“One thing is clear: While comments by the Republican leadership seem to indicate that they are in recession, the US economy continues to grow and add jobs even as gas prices continue to fall,” Biden said in a statement, recalling that inflation. remains “our top economic challenge.”
It’s a far cry from just a year ago, when the US economy was adding jobs every month at an impressive clip: More than 650,000 jobs were added in October and November, close to 600,000 in December, followed two months later by 714,000 new jobs. in February.
President Joe Biden and his economic team have known for months that the cooling of the economy is necessary to reverse the pervasive price increases that have given the Republicans a significant advantage on the issue that voters consistently say is the most important.
Biden and his top advisers have been at pains since the summer to emphasize their rationale for transitioning from primary job gains to an economic picture defined by “steady and stable” growth.
It’s a message aimed at giving hope after more than a year defined by the rapid pace of hiring, but also a goal that officials see as necessary to protect the many benefits they regularly tout.
At its 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 the unemployment rate rose from 3.5% to 3.7% on Friday.
The combination of steady job gains and a return to quarter-on-quarter growth is at the heart of Biden’s contention that, despite the worsening national mood, the U.S. economy is not in or on the brink of recession.
“Our economy is strong as hell,” Biden told reporters last month.
The tight labor market, however, has exacerbated rising prices that have hurt Democrats in their majorities in the House and Senate. That, in turn, has driven the Federal Reserve to trigger four consecutive jumbo rate hikes, including the latest three-quarters-of-a-point move this week.
Fed Chairman Jerome Powell, in his press conference after the announcement of the policy, pointed to the labor market which is “just very, very strong” as the central reason for the rapid increase in speed and not tangibly dented soaring prices.
“So it may take time. It may take determination. It may take patience. It will likely reduce inflation,” Powell said of the impact of the Fed’s 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 not face political pushback from his administration as it deliberately cools the US economy.
But White House officials are well aware that the stated goal of a “soft landing” in which the central bank manages to significantly tighten economic conditions to reduce inflation, but not enough to push the economy into a painful recession, is difficult. needle to thread.
However, they see indications that it is a possible outcome.
“I believe there is a way to achieve that while maintaining a healthy labor market,” Treasury Secretary Janet Yellen told CNN in an interview. “And I believe we are on that path.”
But that path includes officials looking for more modest job cuts, or clear signs of a “steady and stable” environment that will create more room for the Fed’s tough task.