President Joe Biden on Friday said the US economy is on the mend, with inflation gradually being tamed, and healthy employment data showing Americans are regaining optimism.

"Our economy is moving in the right direction," Biden said at the White House, highlighting that he was confident about reducing persistently high inflation.

However, he warned that a dispute over raising the US debt ceiling poses "the biggest threat" to the economy.

Referring to strong jobs data out Friday, Biden said the aspect that "pleased me the most" were signs that people previously not looking for work were now back in the labor market.

"People are working again. They're becoming more optimistic about their future," he said.

Biden, who is expected soon to announce he is running for reelection in 2024, called out Republicans in Congress who are pressuring the party to refuse authorizing an extension of US borrowing limits.

The so-called debt ceiling needs to be raised by some time this summer or risk the United States running out of money and defaulting on its debt payments. That would likely spark an economic crisis and even the ongoing dispute over what to do is stirring jitters.

"The biggest threat to our recovery is the reckless talk... with regard to the debt limit," Biden said. "Planning to default, as some Republicans seem to be doing, puts us very much at risk."

Republican leaders have indicated they do not want to risk a default, but some in the party are urging for using the threat as a bargaining tool to get the Biden administration to agree to steep spending cuts.