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07 Jul, Thursday
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Bull Trader USA

: Biden lauds sharp decline in unemployment rate, says he’s ‘confident’ Fed can control inflation

President Joe Biden took a victory lap Friday morning after the Labor Department’s jobs report showed the unemployment rate falling below 4% for the first time since the beginning of the COVID-19 pandemic.

Biden said that today was a “historic day for our economic recovery,” arguing that the passage of the president’s COVID stimulus package in January, followed by a bipartisan infrastructure package signed into law in November, helped to create 6.4 million jobs during his first year in office.

The U.S. economy created 199,000 new jobs in December, below economists’ estimates of 422,000. The unemployment rate, however, fell to 3.9%, it’s lowest level since the onset of the COVID-19 pandemic.

The monthly job gain figures are derived from a survey of businesses, while the unemployment rate is computed based on a survey of households, which showed that 651,000 people found jobs in December after a 1.1 million surge in November.

Economists typically see the business survey data as more reliable, but recent upward revisions in job gains for past months suggests the household survey could be more accurately reflecting the strength of the labor market of late.

Read more: The U.S. jobs report is not as weak as looks for the second month in a row. Here’s why.

Republicans criticized Biden’s handling of the economy, highlighting that job gains fell short of economist forecasts. “Today’s jobs report is another massive miss, falling two hundred thousand jobs short of expectations,” House Minority Leader Kevin McCarthy, a California Republican, said in a statement. “The labor participation rate should be climbing; instead the world’s greatest economy is being smothered by Washington Democrats’ government overreach and mandates.”

Biden countered that Republicans “want to talk down the recovery because they voted against the legislation that made it happen.” The GOP was united in opposition to the January American Rescue Plan, though 19 of 50 Republicans in the Senate voted for infrastructure bill, while 13 House Republicans also supported the legislation.

“Now my focus is on keeping this recovery strong and durable, notwithstanding Republican obstructionism,” Biden said. “I know that even as jobs and family incomes have recovered, families are still feeling the pinch of prices and costs.”

Prices for a typical basket of consumer goods rose by 6.9% in 2021, the fastest pace of inflation since 1981, outpacing the 4.7% rise in average hourly earnings seen last year. Biden said he was confident that the Federal Reserve would act effectively to “make sure that price increases to do not become entrentched over the long term.”

He also argued that the provisions in his Build Back Better Act, which remains stalled in the Senate, would lower costs for average Americans for childcare, health care and education.

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