U.S. President Joe Biden delivers remarks on the January jobs report in the South Court Auditorium at the White House in Washington, DC on February 3, 2023. Photo by Yuri Gripas/UPI | License Photo
Feb. 3 (UPI) -- U.S. President Joe Biden on Friday touted the strength in the labor sector, noting the 12 million jobs created since January 2021 was the strongest ever and unemployment was at a 54-year low.
"Today, I'm happy to report that the state of the union and the state of our economy is strong," the president said.
Data from the Bureau of Labor Statistics showed total non-farm payroll increased by 517,000 last month, pushing the unemployment rate to 3.4%, which the president said was the lowest since May 1969. Gains were widespread, with the surge covering everything from leisure and hospitality to healthcare.
Since he took office in 2021, Biden estimated that 12 million jobs were added to the U.S. economy. That growth corresponded with an economy that was accelerating from the doldrums during the worst of the COVID-19 pandemic.
"That's the strongest two years of job growth in history by a long shot," he said.
Nevertheless, recent layoffs in the tech sector, from Amazon to Salesforce, could be a sign of lingering concern.
Data suggested the spike in new hires, meanwhile, might be something of a one-off as the overall rate of unemployment has shown little net movement since early last year. The Bureau of Labor Statistics reported that both the labor force participation rate and the ratio between population and employment are relatively stable.
"These measures have shown little net change since early 2022 and remain below their pre-pandemic February 2020 levels," BLS stated.
New hires, meanwhile, caught most analysts off guard. James Knightly, the chief international economist at ING, said that Friday's data are a bit difficult to rationalize.
"We have to just take that on the chin and say despite seven consecutive monthly falls in residential construction output, three consecutive falls in industrial production and consumer spending disappointing in November and December firms are still happy to hire," he said. "Maybe the Fed will keep hiking for longer, but we will need to see the economy suddenly rebound to make this great job news continue."
A resilient labor market could be a challenge to the U.S. Federal Reserve, which is working to lower inflation with successive increases in its lending rates. Federal Reserve Chairman Jerome Powell on Wednesday announced a rate increase of 0.25%, lower than the aggressive hikes of 0.75% last year, reflecting a steady decline in consumer inflation.
But strength in the labor market would encourage consumer demand, which could counter some of the impacts of the Fed's rate hikes
"Despite the slowdown in growth, the labor market remains extremely light with the unemployment rate at a 50-year low, job vacancies still very high and wage growth elevated," Powell said.
Wage growth too would incentivize more spending. The surge in consumer demand during the post-vaccination stage of the COVID-19 pandemic helped push inflation to double-digit territory last year and there are few signs that consumers are feeling a pinch.
Powell said job gains have experienced a boon with employment rising by about 247,000 per month in the last quarter, though there is still an imbalance between available jobs and job-seekers.
Markets were unfazed by the data. Crude oil prices by mid-day had given up most of the gains from early in the session. The Dow Jones Industrial average was flat, while the tech-heavy Nasdaq was up just 0.15% as of 11:30 a.m. EST.