President Biden and Democrats, plagued by inflation, will head into next week’s midterm elections touting millions of jobs added since the 2020 cycle and unemployment at historic lows.
The economy added 261,000 jobs in October, the Labor Department said Friday in the final major economic report before Tuesday’s elections. The economy is the issue weighing most heavily on voters, and while inflation remains red-hot, the report is at least one bit of good news that Democrats can raise when discussing the economy on the final stretch of the campaign trail.
“Under President Biden and the Democratic Congress, America continues to create jobs at a strong, steady, sustainable pace,” House Speaker Nancy Pelosi (D-CA) said in a statement.
The unemployment rate increased slightly from 3.5% to 3.7%, although in terms of U.S. economic history, 3.7% is a very good number. The headline unemployment rate this year has been about what it was prior to the pandemic, something Biden and Democrats have pointed to as proof that their policy decisions helped guide the economy out of its pandemic-induced slump.
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Still, Republicans were quick to seize on the uptick in the unemployment rate and home in on other negative indicators.
“The workforce is shrinking, job growth is slowing, and unemployment is rising — these are all signs of a Biden-induced recession,” said Rep. Kevin Brady (R-TX) after the Friday report. “While Democrats promise more of the same inflationary policies, Republicans are committed to building an economy that is strong, where more families can achieve the American Dream.”
In a statement after the report, Biden said, “One thing is clear: While comments by Republican leadership sure seem to indicate they are rooting for a recession, the U.S. economy continues to grow and add jobs even as gas prices continue to come down.”
While the jobs report might have some positives Democrats will amplify, when it comes to economic issues, inflation is also top of mind for voters — and Republicans have successfully used it as an indictment of Biden and Democrats.
Patrick Gourley, an associate professor of economics at the University of New Haven, told the Washington Examiner that media interpretations of the report, and how it fits into the broader economic picture, will be a major factor in whether Democrats will be successful in using the latest employment numbers to their advantage.
“Nine times out of 10, you would expect good jobs numbers right before an election to be good for the incumbent party and bad for the opposition party, but right now we’re in this time where because inflation is so high, the Fed is actively trying to reduce employment and kind of slow the economy down,” he explained.
And the Federal Reserve is trying to soften the labor market. The Fed has been jacking up interest rates at a historic pace this year in an attempt to slow economywide spending, but inflation remains hot. There is growing concern that the Fed won’t be able to pull off a “soft landing” — that is, lowering inflation while avoiding a recession.
The reasons why inflation is overshadowing the red-hot job market and low unemployment in the minds of voters are twofold, according to Gourley.
For one, the inflationary plague is a new phenomenon. The last time inflation was this bad was some four decades ago, during the Great Inflation of the 1970s and 1980s. Many people weren’t even alive during the last stretch of inflation, and those are the votes that Democrats are most trying to capture on Tuesday.
While inflation is new for voters — and they hear all about it in the news media — unemployment below 4% is not so new. Indeed, from the start of 2018 through the start of the pandemic, the unemployment rate was below that threshold (despite not dipping below that during most of the 21st century). Because of the familiarity, the low numbers don’t grab as many headlines and don’t necessarily make as much of an impression as inflation does.
Secondly, inflation isn’t just a bit of an economic drag — it is severe and broad-based. Consumers can tangibly see inflation every time they fill up their gas tanks or buy groceries at the store. It’s causing people to be poorer, as their real wages can’t keep up and are shrinking compared to last year.
Republicans have seen how hard inflation has hit families and are successfully using it as a criticism of Democrats.
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A Wall Street Journal poll found that nearly half of voters said they think congressional Republicans are best suited to help cool inflation, compared to only 27% who said the same about Democrats. A majority of voters said President Joe Biden’s policies have hurt the economy, compared to just 27% who said they have helped.
Heading into next week, Biden and Democrats will keep bringing up the low unemployment numbers, but with inflation, the final employment report might not be enough to buoy voters’ trust in the party to fix the economy.
