Several economic indicators reveal that the U.S. labor market is showing signs of weakness under President Joe Biden’s administration, despite trillions in federal spending on economic policies and significant business regulations.
Americans looking for new job opportunities have often been faced with various hurdles such as “economic volatility” and increased competition during the current administration’s term, experts told the Daily Caller News Foundation. Despite this, the White House has repeatedly assured Americans that the U.S. job market has fared well during Biden’s sole term.
“Three major issues face job searchers today,” Peter Earle, a senior economist at the American Institute for Economic Research, told the DCNF. “First, the labor market has cooled. Total job openings have declined from their March 2022 peak, so there is increased competition for a falling number of available positions. The impact of the Biden administration’s regulatory expansion has led many small companies, which are the wellspring of job creation, to dial back hiring and expansion plans. Second, the hiring process has become more protracted – another regulatory cost. And, certain industries, such as manufacturing and technology, have had layoffs as they try to recover from the pendulum of lockdowns, reopenings, and economic volatility. There has recently been a huge surge in independent business owner optimism, so, some of these trends may reverse.”
The U.S. unemployment rate was 4.2% in November 2024, up from 3.7% the year prior, the Bureau of Labor Statistics (BLS) reported. This marks a significant increase from a low of 3.4% in January 2023.
As of November 2024, the number of long-term unemployed people, or those jobless for 27 weeks or more, was 1.7 million, up from 1.2 million a year earlier, according to the BLS. Meanwhile, the number of unemployed people in November 2024 was 7.1 million, up from 6.3 million in November 2023, the BLS reported.
Job seekers also have faced increased competition while applying for jobs. In 2023, job seekers had to send an average of 254 applications to get a job, compared to an average of 294 applications in 2024, according to Pathrise.
A Workday report published in September 2024 found that competition is growing in several industries, with the most competitive being media, technology and communications, which had an average of 30 applicants per offer.
The ratio of job openings to unemployed persons has decreased from a peak of 2 job openings per unemployed person in March 2022 to 1.2 jobs per unemployed person, according to a July 2024 blog post from the Federal Reserve Economic Data (FRED) blog.
Much of Biden’s term has also been marred by stubborn inflation, which peaked at 9.1% in June 2022. The consumer price index, a broad measure of the price of everyday goods, increased 2.7% annually in November 2024, the BLS reported.
During Biden’s first two years in office, inflation outpaced wages for most workers. Real wages in the U.S. also declined between November 2020 and September 2024, according to data compiled by Statista.
Certain regulations introduced by the Biden-Harris administration caused several businesses to lay off workers to cut costs, one expert explained to the DCNF.
“The Biden administration has issued an inordinate, enormous number of regulations, and regulations impose extra costs on businesses,” Richard Stern, director of the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation, told the DCNF. “They [the regulations] prohibit certain businesses from functioning at all. Whenever you tie the hands of businesses that way … it means ultimately that they have to either cut their operations, which means cutting workers, or raising prices on consumers.”
Some experts have attributed massive government spending under Biden’s term to fueling stubbornly-high inflation rates. Biden signed the Inflation Reduction Act (IRA) into law in August 2022 as part of his signature climate agenda.
The Biden-Harris administration has so far awarded billions in grants for various clean energy projects through the IRA. Some estimates project that the IRA will cost over $1 trillion from 2023 to 2032.
The national debt continues to rise under Biden as well, partly due to the $1.9 trillion American Rescue Plan signed into law in 2021. As of Monday, the U.S. national debt was $36.17 trillion, while the national deficit was $624 billion.
“Reckless spending, money printing, new taxes and regulations is why we had a 21% price increase in consumer prices during Biden’s tenure. And that again puts downward pressure on hiring and downward pressure on wages. When you look at all these things together, it’s kind of a miracle that the economy has functioned as well as it has,” Stern added.
The monetary supply increased significantly in Biden’s first year in office as the government continued to print money to finance the country’s massive debt burden, according to FRED.
Many consumers and businesses have been forced to contend with steep prices during Biden’s term. Consumer prices in the U.S. have risen roughly 20% since 2021.
Americans have faced increasing difficulty affording credit card payments and mortgages in recent years — credit card defaults climbed to a 14-year high during the first nine months of 2024, while U.S. mortgage rates rose to an almost six-month high toward the end of 2024.
The average 30-year fixed mortgage interest rate in the U.S. was roughly 7% as of Monday, down from a previous peak of 7.79% in October 2023.
“Under the Biden administration the household finances of workers have been blasted,” Earle told the DCNF. “Prices have vaulted at a rate far beyond the Fed’s annual target, and interest rates have been hiked to highs not seen in 15 years to slow that increase. So the cost of living rose, as did the cost of borrowing.”
The Federal Reserve announced in December 2024 that it was lowering interest rates by a quarter point, marking its third consecutive rate cut since September 2024. Before the September cut, the Fed had kept its target range between 5.25% and 5.50% — the highest range since 2001 — to rein in inflation.
Notably, many Americans have had to adopt a second source of income in recent years to make ends meet. A MarketWatch survey published in August 2024 found that 54% of Americans said they had taken on a side hustle in the last 12 months to “supplement their primary source of income.”
Some American consumers and workers are seemingly more optimistic about their careers following the results of the November 2024 presidential election. Ahead of President-elect Donald Trump’s impending return to the Oval Office, about two-thirds of Americans said they were optimistic about the incoming Trump administration’s impact on their careers, a Resume Genius survey found. Meanwhile, a recent survey from The Conference Board found that consumers’ outlook on the labor market improved in December, with 37% saying jobs were “plentiful,” up from 33.6% in November.
The White House did not immediately respond to a request for comment from the DCNF.
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