Washington: The recent events have given President Joe Biden hope that the American economy can make a soft landing, perhaps averting a recession as the 2024 election draws near.

The majority of Americans are unimpressed with Biden's handling of the economy because high inflation has obscured a robust labour market. Economic orthodoxy has long held that the Federal Reserve's attempts to contain inflation would lead to higher unemployment and a downturn in the economy.

The president and some economists, however, believed that the 3.4% unemployment rate and 253,000 new jobs in the April jobs report, which was released on Friday, refuted that theory.

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The positive jobs report came after the Fed meeting on Wednesday, which raised the possibility that the U.S. central bank might hold off on raising interest rates, the main tool for reducing inflation from its current high of 5% to one that is more in line with 2%. The need to raise the debt ceiling is also being discussed, and Biden has invited congressional leaders to the White House for a meeting on Tuesday in the hopes of securing a commitment to prevent a default.

Even as he pushed GOP lawmakers for a clear increase on the debt cap, Biden struck a confident tone Friday when meeting with aides, surprising for a president seeking a second term.

Regarding the overall economy, he said, "I think we're trending in the right direction and making real progress. I urge Republican lawmakers not to undo all this progress with the debt limit standoff."

The economy may still falter. Several economists predicted a recession this year, taking into account the unknowns of the Ukrainian conflict, global unrest, and the debt ceiling debate. However, the consistent job growth has led some economists and policymakers to believe that inflation can be controlled without layoffs.

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Jerome Powell, the chairman of the Fed, told reporters on Wednesday that the current trends defy history.

According to Powell, it was not expected that the number of job openings could decrease as much as they have without an increase in unemployment. So, that's what we observed. There are no guarantees in this, but it just seems possible to me that the labour market will continue to cool off without sharp increases in unemployment.

There are currently no indications of a recession, according to Heidi Shierholz, president of the Economic Policy Institute, a liberal think tank, and if one does occur, it will be as a result of Fed overreach.

We have demonstrated that we can reduce wage growth and inflation, so we are currently in the midst of a soft landing, she said.

Voters' satisfaction with the economy is not implied by this, though. Even though Biden has started the process of launching his reelection campaign, inflation continues to be a constant annoyance. House Speaker Kevin McCarthy, a Republican from California, insisted on spending reductions as a condition of a debt limit agreement in order to lower inflation, and other GOP lawmakers have used the high prices following the pandemic as a political football. The debt ceiling refers to financial commitments made by the United States in the past, not in the future.

While Biden praises the robust job market, Fed officials might view the hiring as justification for further rate increases, which would be bad news for both the economy and the Democratic administration.

According to Douglas Holtz-Eakin, president of the center-right American Action Forum and a former director of the Congressional Budget Office, "the starting point is the fact that inflation remains stubbornly high and politically troublesome." "The Fed wants to bring it down. The data behave, not just seem to. The financial markets would go completely insane if the Fed raised interest rates again in June.

Another possibility is that lawmakers fall short of preventing a default. Another possibility is that the drama surrounding a debt limit agreement causes the economy to weaken this summer. According to the Treasury Department's forecast, the government's accounting tricks may run out by the beginning of June, at which point a deal would need to be in place.

Even if a deal is reached, the White House estimates that brinkmanship over the debt limit could cost the economy 200,000 jobs.

Not all economists agree that the American economy has escaped the recession's gravitational pull.

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Many think it might happen later this year, possibly influencing the 2024 election. The jobs report might not be a long-term victory for Biden, just a momentary boost. As the campaign season heats up, the historical pattern might make a comeback.

"The strong performance of the labour market dampens expectations of an immediate recession," said Kathy Bostjancic, chief economist at the insurance provider Nationwide. Although the ongoing strong job gains and brisk wage growth do suggest it could start later in the year, "our view remains that a recession remains on the horizon, unfolding in the second half of the year."