Biden Boasts Historic Job Growth. Here's Why That Might Be Misleading

A recent labor report indicated the economy added over 500,000 jobs in January.

A series of tweets by President Biden on Friday pointed to a strong labor report as proof of his administration's economic policy paying off. "We just created more jobs in two years ... Than any president ever has ... In any four-year term." Just how much of that economic growth can be attributed to Biden-era policy, and how does a post-COVID rebound factor in?

The Employment Situation report

When researchers look to quantify the economic state of the nation, they often refer to a wide variety of reports compiled by the Bureau of Labor Statistics. The BLS regularly reports on many economic indicators: inflation rates, worker productivity, and even summer employment among teenagers. However, the report catching headlines right now is the aptly-named Employment Situation, or jobs report.

The January Employment Situation report was largely positive, indicating that Americans are seeking and finding employment across a wide variety of sectors. The report's findings represent a strong start to the new year for labor markets, showing growth of 517,000 jobs. That compares favorably to the average monthly increase in 2022 of 401,000 jobs.

Also measured in the report is the national unemployment rate, which dropped slightly to 3.4% in January. The last time the nation enjoyed an employment rate so low was in 1969. Treasury Secretary Janet Yellen took the report optimistically, saying that, "You don't have a recession when you have … the lowest unemployment rate in 50 years."

Economic trends can have serious implications for the personal finances of millions of Americans.

"Bidenomics"

The economic policy of the Biden Administration, so-called "Bidenomics," has directed the injection of trillions of dollars into the American economy in a very short period of time. Between taking office in January 2021 and signing the Inflation Reduction Act in August 2022, it is estimated the Biden administration increased government spending by some $4.8 trillion.

The Biden Administration's first and largest major spending bill, the American Rescue Plan, sought to provide relief to Americans during the COVID-19 pandemic. Signed into law in March 2021, the legislation built on many of the provisions of then-President Trump's CARES Act of March 2020. Like the CARES Act before it, the American Rescue Plan authorized about $2 trillion of government spending.

Since then, the Biden Administration has continued to prioritize large spending packages, authorizing the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and two large year-end Omnibus bills.

Political tack or economic bounce back?

So, how much of America's labor resurgence is a result of the Biden Administration's economic agenda? It's difficult to say. Divorcing economic growth from government spending, especially on as large a scale as the first two years of Biden's presidency, is effectively impossible. However, we can compare economic outcomes with pre-Biden predictions.

The Congressional Budget Office released an economic forecast in February 2021, prior to the American Rescue Plan and based on government spending at the time. The report estimated the workforce would increase by 6.25 million in 2021 and 1.74 million in 2022. Assuming the economic projections of the CBO were accurate, the post-pandemic upswing would account for nearly 8 million jobs without any of Biden's measures.

While they make pointing fingers look easy in Washington, tracking down who is responsible for what and by how much can be incredibly difficult. Did the Biden Administration positively affect the labor markets through its economic policy? Probably. Is the Biden Administration solely responsible for the 12 million jobs added to the economy in the last two years? Probably not.