Biden still has a rosy view on the economy despite a bad November jobs report. Here's 3 reasons why he may be right to be optimistic.
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- Biden touted a sharp drop in the jobless rate and argued the economy is on the right track.
- There's a problem, though: the economy added about half as many jobs as expected in November.
- But there are three reasons Biden might be right to be optimistic.
The latest jobs report released Friday showed the US economy regained 210,000 jobs in November, a paltry sum that was roughly half what economists had forecasted. The soft report underscored the pandemic's ongoing impact on hiring.
But President Joe Biden kept his rosy view on the economy. On Friday, he gave brief remarks and touted a sharp drop in the unemployment rate and rising wages, particularly for hourly-paid workers employed at hotels and restaurants.
"Simply put: America's back to work and our jobs recovery is going very strong," he said on Friday.
There are other problems facing the economy. At least 1.5 million women still haven't re-entered the labor force and are sitting on the sidelines, restrained by the pandemic and many often shouldering the burden of childcare. Inflation also remains a problem, though the supply-chain backlogs that are mainly driving it may be easing.
But here are three reasons Biden may be right to be optimistic on other aspects of the jobs report.
The strong possibility of upward revisions
The Bureau of Labor Statistics is the federal agency that releases the jobs report every month. The pandemic has complicated their efforts to accurately gauge swift changes in the labor market. Some of the reasons include businesses being slower to respond to their official survey and it's simply more difficult to capture patterns in real time during a pandemic.
Insider reported last month that the BLS had reported revisions since May 2020 that added a whopping 1.2 million more jobs added than previously thought. It makes the possibility of another upward revision for November possible when the next report is issued next month. Indeed, the November report included yet more revisions for the last several months — all upward.
"I think the modeling is super challenging for @BLS_gov in this environment & I don't think this is a credible estimate," Tony Fratto, a former Bush administration official who served in the Treasury, wrote on Twitter.
A sharp drop in the unemployment rate
The unemployment rate fell to 4.2%, the lowest level during the pandemic. That's lower than any month during President Barack Obama's eight years in office.
As Insider's Juliana Kaplan, Ayelet Sheffey and Andy Kiersz reported, BLS data is showing that many millions of people want to work, but available jobs aren't aligned with the pay they seek — or other conditions. Trouble getting affordable childcare and COVID-19 fears are both obstacles as well. Still, experts say that unemployment will keep falling as the pandemic subsides.
"More workers came back to work last month as Delta wound down," Mark Zandi, an economist at Moody's Analytics, wrote on Twitter. "We still have a ways to go to get back to full employment, but it is coming into view."
More people are heading back to work
The labor force participation rate hit 61.8% in November — the highest level since March 2020, according to Steven Rattner, a former Obama administration official.
Part of that reflects an increase in the amount of people aged 25 to 54 — considered "prime-age workers" — re-entering the workforce, per Indeed economist Nick Bunker, many of them women. Should the US economy continue recovering at a fast clip, the recovery could be complete by the end of next year.
"As long as Nov is a blip, the 2021 average rate of 555,000 per month still means we are on track for a full recovery by the end of 2022," Elise Gould, senior economist at the left-leaning Economic Policy Institute, wrote on Twitter.
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