The US Job Market Under the Biden Administration: Too Good to be True?
As the US is like many countries, still recovering from the COVID-19 pandemic, President Joe Biden’s claim of 14.9 million jobs created since he took office, is perhaps questionable. Let’s look at the data to understand whether this statement is too good to be true.
The Market Post-COVID
It’s no secret that the COVID-19 pandemic hit the job market somewhat the hardest. In February 2020, just before the pandemic struck, 152.3 million people were employed in the US. However, the onset of the pandemic led to an unprecedented loss of 21.9 million jobs by April 2020, reducing employment to only 130.4 million. When President Biden entered office in January 2021, the economy had already begun to recover, with employment levels at 142.9 million. By February 2024, this number had risen to 157.8 million, marking an impressive increase of 14.9 million jobs.
This sounds good, right? Well, like with all data, we need to look at the bigger picture. Approximately 9 million of the jobs gained were simply recovering those lost during the pandemic. Thus, the net gain in jobs from pre-pandemic levels was 5.5 million. This net gain highlights the true extent of job growth under the Biden administration.
Claims vs Realities
In March 2024, the narrative that 15 million jobs had been created since Biden took office was widely circulated by prominent figures, including the US Department of Commerce, the White House, Vice President Kamala Harris, and House Minority Leader Hakeem Jeffries. These claims were coupled with statements about the unemployment rate remaining below 4% since February 2021, the longest stretch in over 50 years.
The White House’s post on X emphasized America’s impressive growth, stating: „Since President Biden took office, America has had the strongest growth of any major economy in the world. Nearly 15 million new jobs. The longest stretch of unemployment under 4% in 50 years. Growth is strong. Wages are up.” Similarly, Vice President Harris highlighted the job creation milestone in her post on March 20, 2024.
While these claims are technically accurate in terms of gross job numbers, they can be misleading without the context of pre-pandemic employment levels. The net gain of 5.5 million jobs, rather than the gross figure of 14.9 million, provides a more accurate picture of the administration’s impact on employment.
How Strong Is The US Economy?
Despite the nuances in job growth figures, the US economy has demonstrated significant strength under President Biden. For instance, the Bureau of Labor Statistics reported that 275,000 jobs were added in February 2024, surpassing the 200,000 estimated by Bloomberg. Although the unemployment rate increased slightly by 0.2 percentage points to 3.9%, it remained under 4% for two consecutive years—a feat not achieved since 1967.
Furthermore, the economy grew by 3.1% in 2023, a year when many economists had predicted a recession. This unexpected growth has led some analysts to believe that the economy’s momentum may continue longer than previously forecasted.
Wage Growth & Economic Sentiment
Wage growth has also been a notable aspect of the economic recovery. With strong job creation and low unemployment, wages have seen an upward trend. This growth in wages is important for maintaining consumer spending, which drives a significant portion of the US economy.
The positive economic sentiment is reflected in various sectors, from manufacturing to services, showing resilience and adaptability in the face of global challenges. The labour market’s recovery has contributed to broader economic stability and growth, reinforcing confidence in the administration’s economic policies.
What Does The Future Look Like?
While the job market has shown positive gains, challenges remain. The slight uptick in the unemployment rate in early 2024 and ongoing concerns about inflation underscore the need for balanced economic policies. The Federal Reserve’s actions on interest rates and the administration’s fiscal policies will play critical roles in sustaining the economic recovery and addressing any potential downturns.
Turning to the global economic environment, including geopolitical tensions and supply chain disruptions, these will continue to impact the US economy. Ensuring resilience against such external factors will be vital for maintaining the current growth trajectory.
The US job market under the Biden administration has experienced substantial recovery and growth following the COVID-19 pandemic. While the headline figure of 15 million jobs created is an ostensible achievement, understanding the net gain of 5.5 million jobs provides a clearer perspective on the administration’s impact. Despite the challenges, the economy’s strength, marked by sustained job growth, low unemployment, and wage increases, the bigger picture does seem brighter. Moving forward, maintaining this momentum and addressing emerging challenges will be key to continued economic prosperity.
Author: Mark Ollerton