WASHINGTON — A gradual slowdown in job gains and a growing workforce in March delivered good news for President Biden, nearly a year after he declared that the labor market needed to cool significantly to tame soaring prices.
The details of the report are encouraging for a president whose economic goal is to move from rapid job gains — and high inflation — to what Mr. Biden called “stable, steady growth.” Job creation slowed to 236,000 a month, closing at the level Mr. Biden said last year would be needed to stabilize the economy and prices. More Americans have joined the workforce, and wage gains have fallen slightly. These developments should help further calm inflation.
But the report also highlighted the president’s political and economic tensions as he seeks to persuade Americans of his economic leadership ahead of an expected announcement this spring that he will seek re-election.
Republicans have criticized Mr. Biden for slowing hiring and wage increases. Some analysts have warned that after a year of consistently outperforming forecasters, job growth appears poised to decline sharply or even turn negative in the coming months. In part, that’s because banks pulled back on lending after administration officials and the Federal Reserve intervened last month to avert a potential financial crisis.
Surveys show that Americans’ views of the economy are improving, but people remain dissatisfied with its performance and pessimistic about its future. A CNN poll was conducted in March And this week showed that seven out of 10 Americans rated the economy as somewhat or very weak. Three out of five respondents expect the economy to be poor a year from now.
As he tours the country in preparation for the 2024 campaign, Mr. Biden has built his economic bid around a record rebound in job creation. He regularly visits factories and construction sites in swing states, pitching promises of employment to companies as direct results of a White House legislative agenda that has produced hundreds of billions of dollars in new investments in infrastructure, low-emissions energy, semiconductor manufacturing and more.
On Friday, the president took the same approach to employment data for March. He said in a written agreementbefore listing seven states in which companies announced expansions this week that Biden linked to his agenda.
But as he often does, Mr. Biden went on to warn that “there is more work to be done” to bring down the high prices that are stressing workers and families.
The aides were equally hopeful. It’s a “really nice” report overall, Lyle Brainard, who runs Biden’s National Economic Council, told MSNBC.
“This report is generally consistent with steady and stable growth,” said Ms. Brainard. “We’re seeing some moderation — we’re definitely seeing a drop in inflation which has been very welcome.”
But analysts have warned that the coming months could lead to a much faster deterioration in employment, as banks pull back from lending in the wake of government bailouts for depositors at Silicon Valley Bank and Signature Bank.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote on Friday that he expects job gains to fall to just 50,000 in May, and for the economy to start shedding jobs on a net basis over the summer. But he acknowledged that the labor market continued to surprise analysts, in a good way, by drawing more and more workers into the work force.
“The supply and demand of labor are again in equilibrium,” Mr. Shepherdson wrote.
In May, Mr. Biden Books that create monthly posts Need to drop from an average of 500,000 jobs to nearly 150,000, a level he said would be “consistent with a low unemployment rate and a healthy economy.”
Since then, the president has had a complicated relationship with the labor market. Job creation has remained much stronger than many forecasters — and Mr. Biden himself — expected. This growth pleased Biden’s political advisers and helped the economy avoid recession. But it has come with inflation well above historical standards, which continues to stifle consumers and reduce Mr. Biden’s approval ratings.
The March report demonstrated the political difficulty of reconciling these two economic realities. Analysts described slowing job and wage growth as welcome signs for the Federal Reserve in its campaign to bring down inflation by raising interest rates.
But that cooling included a drop in 1,000 industrial jobs, which some groups blamed on the Federal Reserve. “American factories continue to experience the destabilizing impact of rising interest rates,” said Scott Paul, president of the American Manufacturing Alliance, a trade group. “The Federal Reserve must understand that its policies undermine our global competitiveness.”
Republicans have criticized Biden for his decline in wage growth. The average hourly wage continues direction down Even as inflation wiped out any token wage gains for more than two years, Tommy Piggott, director of rapid response at the Republican National Committee, said in a news release.
Representative Jason Smith, R-Missouri and chairman of the Ways and Means Committee, said the report showed that “small businesses and job makers are reacting to dark clouds looming over the economy.”
In his release, Mr. Biden nodded to one of the clouds that could turn into an economic storm as soon as this summer: a standoff over raising the nation’s borrowing limit, which could lead to a government default that puts millions of Americans out of work. Republicans refused to budge unless Biden agreed to unspecified spending cuts.
Mr. Biden has refused to negotiate directly on raising the cap. The jobs report statement closed Friday with a shot at congressional Republicans’ strategy. “I will stop these efforts to put our economy at risk,” he said.