For President Biden, the past few days have raised hopes that the US economy can make a soft landing and possibly avoid a recession as the 2024 election approaches.

Most American adults have gloomy feelings about Biden’s economic leadership as high inflation has overshadowed a strong job market. It has long been an economic orthodoxy that efforts to reduce inflation by the Federal Reserve would lead to rising unemployment and the country sinking into recession.

But for the president and some economists, the April jobs report published Friday challenged that theory with an unemployment rate of 3.4% and 253,000 new jobs.

The strong jobs report came after a meeting of the Fed on Wednesday that suggested the U.S. central bank could pause its rate hikes, its main tool for pushing inflation from the still high 5% to something closer to 2%. is. Talks are also beginning about the need to raise the debt limit, with Biden inviting congressional leaders to a Tuesday meeting at the White House in hopes of eventually getting a commitment to avoid a default.

For a president seeking a second term, Biden struck a confident tone during a meeting with aides on Friday, even as he urged GOP lawmakers to raise the debt ceiling markedly.

We were moving in the right direction and I think we were making real progress, he said of the overall economy, telling Republican lawmakers not to undo all this progress “with the debt limit impasse.

The economy may still stumble. Several economists are predicting a recession this year, given the wildcards of the war in Ukraine, global tensions and the battle over the debt line. But the steady increase in jobs has suggested to some policymakers and economists that it is possible to curb inflation without layoffs.

Fed Chairman Jerome Powell told reporters Wednesday that current trends go against history.

Vacancies were not meant to fall as much as they fell without unemployment rising,” Powell said. ‘Well, that’s what we saw. There are no promises in this, but it just seems to me that it is possible that we will continue to have a cooling of the labor market without the large increase in unemployment.

Heidi Shierholz, president of the Economic Policy Institute, a liberal think tank, said there are currently no signs of a recession and if one does happen it will be due to the Fed overreaching.

We are currently in the middle of a soft landing, we have shown that we can reduce wage growth and inflation,” she said.

But that doesn’t mean voters are happy with the economy. Inflation remains a persistent irritant as Biden has begun to launch his re-election campaign. GOP lawmakers have used the high prices in the aftermath of the pandemic as a political cudgel, with House Speaker Kevin McCarthy (R-

Bakkersveld

) push for austerity as part of a debt limit deal to curb inflation. The debt limit refers to spending commitments the United States has already incurred and not to future spending.

Just as Biden trumpets the solid job market, Fed officials could interpret the hiring as evidence that they need to raise rates and that could cause more pain for the economy and the Democratic government.

The premise is that inflation remains stubbornly high and politically challenging, says Douglas Holtz-Eakin, former director of the Congressional Budget Office and chair of the center-right American Action Forum. The Fed is eager to get it down. The data doesn’t seem to behave alone. The Fed could very well raise again in June and that would make financial markets lose their collective minds.”

There is also the possibility that lawmakers will fail to avert a default. Or there could be so much drama about reaching a debt limit deal that the economy will weaken this summer. The Treasury Department has predicted that its bookkeeping maneuvers to keep the government afloat could be exhausted by early June, after which a deal should be reached.

The White House has released estimates showing that being on the brink of the debt line, even if a deal comes through, could still cost the economy 200,000 jobs.

Nor are all economists convinced that the US economy has escaped the pull of a recession.

Many think it could happen later this year, potentially shaping the 2024 campaign. The jobs report may only be a temporary reassurance for Biden, rather than a lasting win. The historic pattern could reassert itself as the campaign season begins to intensify.

Strong labor market performance dampens expectations of an immediate recession,” said Kathy Bostjancic, chief economist at insurance company Nationwide. continued solid job growth and buoyant wage growth suggest it could start later in the year.