“Wow.” “Great!” “Holy Moly.” Some online comments on the U.S. Labor Department’s announcement on Friday that employers created three hundred and fifty-three thousand jobs in January, exceeding Wall Street’s expectations. The government statisticians also revised the December job figure to three hundred and thirty-three thousand. This reflects the positive momentum of the economy from the end of 2023, carried over into this election year.
President Joe Biden may have exaggerated when he claimed America has “the strongest economy in the whole damn world” to a group of autoworkers in Michigan. However, there have been half a dozen encouraging economic reports in the past week alone. The jobs report particularly showed robust hiring in various sectors. The unemployment rate has stayed below four per cent for nearly two years, a feat not seen since the late nineteen-sixties.
It’s important not to make too much of one month of data, but the economy has been generating more than three quarters of a million jobs in the past three months. The U.S. economy’s strength has led even Donald Trump to take credit for recent positive economic developments. However, economic growth being stronger than expected and rapid inflation reduction are the primary reasons for the stock market rise and increased hiring.
This time last year, there were fears of a recession as the Federal Reserve kept high interest rates to control inflation. However, the economy accelerated in 2023, with G.D.P. growing at an annual rate of 2.5 per cent. The headline rate of inflation has also significantly reduced over time.
Despite this, many families are still struggling financially, as indicated by Biden’s low approval rating on the economy. However, there is a positive shift in media coverage reflecting the good news in official statistics and reflecting Americans’ improving sentiment about the economy.
The impact of this on the election is uncertain, as economic factors may not influence voting patterns as much as they once did. Nonetheless, a strong economy, healthy job growth, and improving consumer sentiment are favorable for any Presidential incumbent heading into a reëlection campaign. That’s the current situation.