The US economy is “headed in the right direction” with slowing inflation, President Joe Biden said after a mixed jobs report eased bets that the Federal Reserve will accelerate its interest rate hikes.
(Bloomberg) — The US economy is “headed in the right direction” with slowing inflation, President Joe Biden said after a mixed jobs report eased bets that the Federal Reserve will accelerate its interest rate hikes.
“While we still have more to do, and there may be setbacks along the way, inflation is now down 30% from what it was this summer,” Biden said Friday at the White House, hailing what he described as a “good jobs report.”
“I’m happy to report that our economy has created over 300,000, new jobs last month. And that’s on top of a half a million jobs we added the month before,” he said. “It’s no accident. It means our economic plan is working.”
The US added 311,000 jobs in February, beating estimates, but the unemployment rate also rose to 3.6% while monthly wages rose at the slowest pace in a year.
“People who were staying out of the job market – this is particularly good news – are now getting back into the job market. They’re coming off the sidelines,” Biden said Friday.
Taken together, the mixed report softened the case for the Fed to accelerate its rate hikes. Investors’ reaction signaled expectations that the report would push the Fed toward a quarter-point hike later this month, rather than accelerating to a 50-basis-point hike.
US payroll growth has exceeded expectations for 11 straight months, extending the longest streak in data compiled by Bloomberg back to 1998.
Biden on Friday again contrasted his economic strategy with that of Republicans, who he said posed the biggest threat to US economic recovery with their “reckless talk” ahead of the upcoming debate over raising the federal debt ceiling.
The House Freedom Caucus, which consists of some of the chamber’s most conservative Republican members, unveiled a budget proposal Friday recommending $3 trillion worth of spending cuts over the next decade, using averting a default on the debt limit as leverage.
The plan also suggests trimming non-defense discretionary spending by $130 billion in 2024 alone. The Freedom Caucus has proved hugely influential in the GOP, with members blocking McCarthy’s bid for election 14 times at the onset of the session. Any final GOP proposal will need at least some buy-in from the coalition to pass in the House.
Biden quipped of the release during remarks: “We just have a very different value set,” adding that the plan would not reduce the deficit by “a single penny.”
The White House has demanded the debt ceiling be raised without conditions. Biden reiterated a willingness to meet with House Speaker Kevin McCarthy over budget negotiations. Meanwhile, the speaker said yesterday: “I’m just waiting for the invitation.”
–With assistance from Reade Pickert, Justin Sink and Erik Wasson.
(Updates with Freedom Caucus plan details.)
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