US adds 517,000 jobs in January as Federal Reserve raises interest rates

The United States added 517,000 jobs in the month of January in a boon to President Joe Biden as the Federal Reserve raised interest rates earlier this week.

Speaking from the White House Friday morning, Mr Biden told reporters he wouldn’t answer questions about anything other than the Labor Department report because doing so would keep reporters from writing about the positive jobs numbers.

Mr Biden started his remarks by pointing out that his administration has “created more jobs in two years than any presidential term at any time”.

“Put simply, I would argue the Biden economic plan is working,” the president said, adding that the “chorus of critics” who’d “written off” his plans have been wrong.

“Today’s data makes crystal clear what I’ve always known in my gut, is that the critics and cynics are wrong,” he said. “While we may face setbacks along the way … it’s clear our plan is working because of the grit and resolve of the American worker”.

The positive report from the Bureau of Labor Statistics is boon to the US economy under Mr Biden, even as the Federal Reserve raised interest rates earlier this week.

The unemployement rate changed little at 3.4 per cent while the labour force participation rate stayed at 62.4 per cent. The labour force participation rate is still below the 63.3 per cent level it was in February 2020 before the Covid-19 pandemic.

Leisure and hospitality added the most jobs with 128,000, food service and drinking places added 99,000 jobs and accommodation added 15,000 jobs. Professional and business services added 82,000 while government employment grew by 74,000 in January. Health care employment grew by 58,000 jobs.

The unemployment rate for Black, adult male, female, teenaged, white, Asian and Hispanic workers all remained virtually unchanged for the month of January.

January also saw modest wage growth at 0.3 per cent for the month and 4.4 per cent for the past 12 months.

The positive growth in employment comes as the Federal Reserve announced a quarter-point interest rate increase on Wednesday.

“Restoring price stability will likely require maintaining a restrictive stance for some time,” Federal Reserve Chairman Jerome Powell said during a news conference. At the same time, he said inflation experienced a downward trend.

“We can now say for the first time that the disinflationary process has started,” he said.

The news is a boon to President Joe Biden as he begins negotiations with House Speaker Kevin McCarthy to raise the debt limit. During his news conference, Mr Powell emphasied the need for Congress to do so.

“There’s only one way forward here and that is for Congress to raise the debt ceiling so that the United States government can pay all of its obligations when due,” he said. “Any deviations from that path would be highly risky.”