Jobs Report Shows US ‘Uniquely Well-Positioned’ to Fight Inflation, Biden Says

© REUTERS / EVELYN HOCKSTEINU.S. President Joe Biden speaks before signing into law the "Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021", at the White House in Washington, U.S., March 3, 2022
U.S. President Joe Biden speaks before signing into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, at the White House in Washington, U.S., March 3, 2022 - Sputnik International, 1920, 04.03.2022
WASHINGTON (Sputnik) - The robust US jobs growth for February shows the nation is uniquely equipped to deal with inflation, President Joe Biden said on Friday as the Federal Reserve prepared for potentially aggressive rate hikes to contain prices growing the fastest rate in four decades.
“In February, the economy created 678,000 jobs… the unemployment rate ticked down to 3.8 percent,” Biden said in a White House statement that referred to the latest non-farm payrolls report released by the Labor Department. “Today’s report underscores that the United States is uniquely well positioned to deal with the challenge that inflation has posed across the world as we recover from the pandemic.”
US unemployment reached a record high of 14.8 percent in April 2020, following the loss of some 20 million jobs in the aftermath of the COVID-19 breakout. Since then, jobs have picked up in most months, with the current unemployment rate of 3.8 percent falling below the 4 percent that the Federal Reserve defines as “maximum employment.”
Biden noted that the US economy had created a record 7.4 million jobs since he took office 14 months ago.
“It’s a result of our success [in] combating COVID-19 and moving forward safely” and to “grow the economy from the bottom up and middle out,” Biden said.
The Federal Reserve slashed US interest rates to nearly zero after the coronavirus outbreak in March 2020 and kept them there to enable economic recovery.
After contracting 3.5 percent in 2020 from disruptions forced by the COVID-19 measures, the US economy expanded by 5.7 percent in  2021 and has been growing at its fastest pace since 1982.
However, the rate of inflation grew even more. The Personal Consumption Expenditure Index, a US inflation indicator closely followed by the Federal Reserve, rose by 5.8 percent in the year to December and 6.1 percent in the 12 months to January. Both readings also indicated the fastest growth since 1982. The Federal Reserve’s own tolerance for inflation is 2 percent per year.
The Federal Reserve’s policy-making Federal Open Market Committee, or FOMC, meets seven times between now and December, with the March 15-16 meeting being the first in the series. Federal Reserve officials, as well as Wall Street economists, have said the FOMC could authorize interest rate hike at every one of those meetings.
Federal Reserve Chairman Jerome Powell said on Thursday that interest rates might have to go up by 25 basis points, or quarter percentage point, at each FOMC meeting if inflation does not cool quickly enough amid surging oil prices and uncertainties caused by the Russia-Ukraine war. Some Federal Reserve officials have even suggested rate hikes of 50 basis points or half a percentage point.
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