For Biden, 10 million new jobs isn’t good enough

When President Biden brags about 10 million new jobs created since he took office, he’s got a legitimate claim to success. No other president comes close to matching his record on jobs. The problem for Biden is that high inflation and weak income gains undercut the remarkably strong labor market of the last two years.

Biden crossed the 10 million–jobs threshold with the employment report for September, when the U.S. economy created 263,000 new jobs. That brings the total number of new jobs since Biden took office to 10,001,000. That’s the most new jobs during the first 20 months of any U.S. presidential administration, ever. The next-best performance came under President Jimmy Carter in the 1970s, when the economy created 6.9 million new jobs from January 1977 through September 1978.

With the midterm elections imminent, Biden will be touting this hiring splurge as part of his pitch to keep Democrats in control of Congress. But voters are likely to be unimpressed, given other economic strains that have put the nation in a recessionary mood.

On the Yahoo Finance Bidenomics Report Card, Biden earns a B grade for the economy under his watch. We compare Biden with seven prior presidents on six economic indicators, with data provided by Moody’s Analytics. Our report card provides a snapshot into what’s working under Biden, and where the problems are. As the midterms approach, it helps explain why a record number of new jobs isn’t giving Biden the tailwind he might otherwise enjoy.

Compared with the other presidents, Biden gets top marks in two categories: total employment and exports. He gets the second best mark for manufacturing employment. On GDP, Biden’s score is middling, while on incomes and stock-market performance, he fares poorly. (Here’s the full methodology).

We don’t measure inflation directly, but inflation affects some of the categories we use to grade the president—especially incomes. We track real income, adjusted for inflation, and Biden gets the worst mark out of eight presidents, with real incomes down 2.4% since he took office. Nominal income growth has been fairly high under Biden, but inflation has been higher—which means typical workers are falling behind, on average. Voters may not measure their inflation-adjusted income from one president to the next, but they sure as heck know when it feels like their paycheck is shrinking.

For a while, Biden enjoyed top marks for GDP growth, which we adjust for population. But then the economy shrank slightly during the first two quarters of 2022, pushing Biden’s score on GDP growth from best to third-best.

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Biden has likewise tumbled on the performance of the stock market. Stocks did well in 2021, but the S&P 500 index (^GSPC) peaked early this year, and has since dropped by a painful 25%. Biden once had the second-best mark on stock performance, but that has now dropped to third best out of eight. The stock selloff also reflects the harmful effects of inflation, which has forced the Federal Reserve to aggressively raise interest rates and tighten monetary policy. Higher borrowing costs are generally bad for corporate profits, which is why they send stocks downward.

Biden’s approval rating is 43%, which would seem strangely low for a president overseeing one of the biggest employment booms ever. Yet this is another distortion of a COVID-crazed economy that still isn’t back to normal. For one thing, the huge gain in jobs during the last two years is largely a recovery from the massive job losses that occurred at the onset of the pandemic, from March through May of 2020. While we’ve finally recovered all the lost jobs, we have not yet reached the higher employment levels we would have been at had COVID not occurred. So the economy is still in a bit of a hole, with some people who worked before COVID still out of the labor force.

The recovery effort also included unprecedented amounts of fiscal and monetary stimulus that have now helped trigger inflation. And we’re learning all over again how ruinous inflation can be. The last dreadful bout of inflation came in the late 1970s and early 1980s, and it torpedoed President Jimmy Carter just as it is depressing Biden’s approval rating.

Carter enjoyed very strong job growth, much as Biden has, yet his approval rating after 18 months was 48%, just a bit better than Biden’s. At the time, inflation had risen from 5% to 8.5%, and it would go as high as 14.6% in Carter’s last year in office. Carter’s approval rating would ultimately bottom out at 29%. For a struggling Biden, that suggests it could get a lot worse.

So the tight job market might not last much longer. Should we celebrate?

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman

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