The White House is hoping that slower job growth in August is a sign the economy is cooling at a manageable pace
“The bottom line is that jobs are up, wages are up, people are back to work. And we’re seeing some signs that inflation may be – I won’t promise you – starting to ease,” Biden said in a remark from the White House.
While the push towards the transition to what officials have called “steady and stable” growth serves as expectations for the public, it is also underpinned by clear economic targets from the White House as inflation remains hot.
Rapid job and wage growth must be tempered for prices to start decelerating in a meaningful way, officials note. The US Federal Reserve’s aggressive rate hikes are a key factor in the necessary slowdown, but also a cyclical transition that officials believe the economy is about to see.
The August report, to some extent, hit a sweet spot in what officials have been describing for the past few weeks as what they want to see. The employment figure of 315,000 underlines that there is no dramatic slump in a historically strong labor market. The unemployment rate has risen — but for a good reason: More Americans are leaving the sidelines and looking for work. Wage growth also slowed.
While Friday’s numbers don’t mean the Fed won’t go down that path, they are more consistent with a job market transitioning into a steady growth cycle.
Noting the growth in manufacturing jobs since he took office, the president noted that companies like First Solar, Corning and Micron have committed to investing tens of billions of dollars to expand manufacturing in the United States.
While Biden has made Federal Reserve independence the central pillar of his administration’s inflation fight, officials are quietly aware that there could be a dramatically negative impact on the Fed if the Fed continues its rapid tightening — as the Federal Reserve Chairman, Jerome Powell, last week very much telegraphed People Biden’s entire agenda was designed to help.
Still, Biden has made it clear that neither he nor his economics team will seek to pressure or influence Fed policy, making any data release consistent with government targets all the more important, officials note.
Biden also announced Friday the 21 winners of a regional economic development competition, who will each receive between $25 million and $65 million, the White House says, “to implement transformation projects and revitalize local industries.” The funds will be provided from the American bailout plan passed by the Democrats last year.
The grants will go toward a range of projects, including programs to support the transition from traditional cars to electric vehicles, building a digital finance sector for small businesses in tribal communities, rebuilding pharmaceutical supply chains, and installing solar power on former coalfields. More than $270 million of the funds will go toward developing workforce training and development programs, the White House said.
The White House says the awards will allocate $87 to two mainly tribal coalitions and more than $150 million to projects serving communities affected by declining fossil fuel use.
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