Biden Praises Closely Watched Jobs Report, But It’s A Mixed Bag

Biden Praises Closely Watched Jobs Report, But It’s A Mixed Bag

jobs report

President Joe Biden speaks about the August jobs report at the White House, Sept. 1, 2023. (AP Photo/Jacquelyn Martin)

If you believe President Joe Biden and the August jobs report, the U.S. labor market has seen 32 consecutive months of job growth and is in one of “the strongest job creating periods in our history.”

The Bureau of Labor Statistics reported on Sept. 1 that the economy added 187,000 jobs in August, up from an increase of 157,000 jobs in July but less than the average monthly gain of 271,000 jobs over the last 12 months.

However, the number of unemployed people rose by 514,000, an increase of 3.8 percent compared to the 3.5 percent rise in July for a total of 6.4 million unemployed.

The report followed news last week that job openings dropped in July to the lowest level in nearly 2.5 years.

“If you’re (Fed Chair) Jerome Powell or another member (of the Fed’s policy committee), this is music to your ears,” Jay Bryson, chief economist with Wells Fargo, told CNN. “It’s showing that labor demand and labor supply are coming more into balance.”

The July total was revised down by 30,000 jobs to 157,000 and June was revised down from 185,000 to 105,000. The downward revisions brought the three-month average to 150,000 jobs.

If the initially reported number of jobs added in August — 187,000 — prevails unrevised, it will be the first time in 2023 that the government does not revise the economic data lower a month or two after taking credit for glowing news media reports.

“We’ve recovered all the jobs lost during the pandemic.  And we’ve added 4 million more new jobs,” Biden said Friday in a speech at the White House.

However, multiple consecutive downward revisions of job numbers have created skepticism that the reported government jobs data is credible.

The Biden administration has been accused of taking credit for strong job numbers that move markets, only to revise the numbers lower a month or two later when the public has lost interest and the media coverage is less intense.

The Labor Department has consistently overestimated job growth each month in 2023 and then later revised it downward, economist Peter Schiff tweeted on Sept. 1.

“Every 2023 #jobs report has been revised significantly lower. Seven downward revisions in a row is not random. The labor department has been consistently over-estimating job growth. No doubt that today’s August 187K job number will also be revised significantly lower next month” Schiff tweeted.

Employment continued to increase in health care, leisure and hospitality, social assistance, and construction. Job losses are showing up in transportation and warehousing.

The Federal Reserve, in its fight against inflation, has been looking for a weaker labor market before it considers backing off interest rate hikes, believing an imbalance between worker supply and demand could push wages higher and make inflation harder to reign in.

In August, average hourly earnings grew 0.2 percent and annual earnings grew 4.3 percent. In July, wages grew 0.4 percent and 4.4 percent, respectively.

The August job numbers suggest that labor market conditions are easing, reinforcing expectations that the Federal Reserve will not raise interest rates this month, Reuters reported.

The 736,000 people who entered the job market in July boosted the participation rate to the highest level in 3.5 years. Concerns about an economic slowdown are probably luring people back into the labor market.

“This is probably the final nail in the coffin for the chances of another rate hike by the Fed in September,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

“This is still not the picture of the labor market we would expect to see if the economy were in danger of decelerating dramatically in the short term, although without question there are signs of moderation,” said Rick Rieder, chief investment officer of global fixed income at BlackRock.

Biden has seen low approval ratings on the economy. An August AP-NORC poll showed 36 percent of U.S. adult respondents approved of how he was handling the economy, while 42 percent said they approved of his overall job as president.

In his speech, Biden took a shot at the Trump administration, saying former president Donald Trump was one of the only presidents who left his presidency “with fewer jobs than when he entered.”