Obama takes credit as unemployment hits 8-year low
Business
Obama takes credit as unemployment hits 8-year low
President Obama took a victory lap Friday as the U.S. unemployment rate hit an eight-year low. The economy added 151,000 jobs in January, a slowdown from recent months but still a sign of a solid job market. Employers raised pay, more people felt confident enough to look for work and the unemployment rate dipped to 4.9 percent, its lowest level since 2008. Friday’s Labor Department report showed that the U.S. job market remains resilient even as the overall economy is struggling in areas such as manufacturing and facing severe weakness overseas.
We have recovered from the worst economic crisis since the 1930s, the worst in my lifetime and the lifetime of most of the people in this room, and we’ve done it faster, stronger, better, more durably than just about any other advanced economy.
President Obama
The monthly data is more heavily in focus now as an indicator of what the Federal Reserve might do in its March policy meeting, after raising interest rates a quarter point in December but standing firm in January. The rise in wages, if sustained in February data, would support another rate hike. But continued slow hiring could prod the Fed to wait for even more data on how the economy, and inflation, are moving. The dollar rose against a basket of currencies on the data as traders saw more rate hikes this year.
What this all means for the Fed is unclear. But their obsession with wage inflation makes it very risky to assume they’ll focus only on the payroll ‘slowdown.’
Ian Shepherdson of Pantheon Macroeconomics
