Biden won’t let China’s ‘surveillance’ balloon burst his good news bubble

The jobs numbers give Biden some wind in his sails

Biden (Copyright 2023 The Associated Press. All rights reserved.)

Much of Washington collectively shifted its attention toward the northern United States upon news that a “surveillance” balloon from China had entered US airspace.

President Joe Biden largely avoided the subject despite the fact that his Secretary of State Antony Blinken canceled his trip to China over the issue. Understandably, the president likely did not want to divulge information about a national security issue.

He also likely wanted to keep the focus on what he considered incredibly good news: the United States added 517,000 new jobs in January. Unemployment has fallen to 3.4 per cent, the lowest rate since 1969. On top of that, the president touted the fact that the US economy added a half-million jobs more than previously thought.

“That's the strongest two years of job growth in history by a longshot,” Mr Biden said.

The positive numbers certainly give Mr Biden some wind into his sails as he prepares to deliver his state of the Union address, and more importantly, as he gets ready to begin negotiations with House Speaker Kevin McCarthy on the debt limit.

This comes after a month of Mr Biden facing reams of negative headlines about the discovery of documents at an office in Pennsylvania and at his residence. Republicans have pilloried Mr Biden for the revelations.

Still, the economic portrait isn’t entirely rosy. Dante DeAntonio, Moody’s Analytics director, said in a statement that wage growth isn’t the best, at only 0.3 per cent this last month and its year-over-year growth fell to its lowest level since December 2021. That is likely a sign that the Federal Reserve’s attempts to whip inflation might be coming at the expense of workers’ gains in earnings.

“Restraining wage growth is a big reason for the Fed’s tightening monetary policy,” DeAntonio said in his statement.

The Fed also seems dead-set on kicking down inflation. Earlier this week, Federal Reserve Chairman Jerome Powell announced another interest rate increase, albeit at a slower pace. It was the central bank eighth rate increase in a row.

Mr Powell said earlier this week, “We can now say for the first time that the disinflationary process has started” and also emphasised that Congress needed to take measures to lift the debt limit, a boon to the president.

“It is a good thing that the disinflation that we have seen so far has not come at the expense of a weaker labor market,” Mr Powell said. “But, I would also say, that the disinflationary process that you now see underway, is really at an early stage.”

The Federal Reserve has worried in the past that an overheated labour market would contribute to higher inflation and Mr Powell sees his job as tamping down inflation. In the past, he’s admitted this might cause some pain for American consumers.