Biden says US is 'back to work' after unexpected jobs growth

President praises 'America's job machine' as employers added 467,000 positions in January

President Joe Biden said 'America is back to work' after the country reported unexpected jobs growth in January. AP
Powered by automated translation

US President Joe Biden hailed the country's unexpected job growth last month, suggesting the latest report from the Labour Department indicated the nation is bouncing back from the coronavirus pandemic.

Despite a surge in infections, nonfarm payrolls increased 467,000 in January after an upwardly revised 510,000 gain in December. The unemployment rate ticked up to 4 per cent and average hourly earnings jumped.

"America's job machine is going stronger than ever," Mr Biden said at the White House on Friday.

"America is back to work."

The median estimate in a Bloomberg survey of economists called for a 125,000 advance in payrolls, though forecasts ranged widely.

The White House was expected to see its first net loss of jobs in over a year, US media outlets reported. The surge of Omicron cases, which likely would have caused Americans to stay home sick or quarantine, was expected to contribute to a “hot mess” for last month's job figures, Axios reported.

“I know it hasn’t been easy. I know that January was a very hard month for many Americans,” Mr Biden said.

“But here’s the good news: we have the tools to save lives and to keep businesses open, keep schools open, keep workers on the job and sustain this historic economic comeback.”

In a surprise display of strength, the labour market continued to improve last month, weathering record levels of coronavirus infections and the resulting absenteeism from work. The data further reinforce Federal Reserve Chairman Jerome Powell’s description last week of the labour market as “strong” and validate the central bank’s intention to raise interest rates in March to combat the highest inflation in nearly 40 years.

The potential for a weak — or even negative — payrolls print, largely because of virus-related disruptions, was well telegraphed in the days before the report, including by White House and Federal Reserve officials.

Meanwhile, the Labour Department’s report showed average hourly earnings rose 0.7 per cent in January and 5.7 per cent from a year ago, further fanning concerns about the persistence of inflation. The average workweek dropped.

The faster-than-expected advance in pay could fuel market concerns about the Fed taking an even more aggressive stance on inflation this year.

Even still, the unexpected growth in US jobs coincides with the highest inflation rate in four decades, and Mr Powell said last month that inflation poses the greater threat to the US jobs market.

The US Commerce Department reported last week that the country's economy grew by 5.7 per cent last year. Economists are forecasting that the US economy will slow for the January-March quarter due to inflation and the continuing pandemic.

Mr Biden has routinely cited jobs data as proof of the robust recovery from the pandemic, and to downplay the impacts of another result of soaring inflation. Monthly data on price gains are due next week, with economists expecting the measure to remain high.

Bloomberg contributed to this report

Updated: February 04, 2022, 7:03 PM