WASHINGTON (AP) – President Joe Biden’s promised economic comeback hit a pace on Friday with the April job report that saw modest job gains of 266,000, complicating his $ 4 trillion boost to infrastructure, education and children.
The employment report did not show that the US economy, much as it appeared to be stuttering, picked up as the unemployment rate rose to 6.1%. Economists had forecast around a million additional jobs last month, and the humble attitudes indicated that the $ 1.9 trillion coronavirus aid package has so far provided an uneven boost.
The numbers pose a new challenge for Biden at a critical moment in his presidency. He insists that an open embrace of massive government spending will help resolve the country’s public health and financial turmoil – and improve the political outlook for Democrats en route to next year’s election. But the disappointing employment numbers could also encourage critics and heighten Republican resistance to the infrastructure package that Biden is trying to push through Congress.
Biden responded to the report and tried to allay the concerns.
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“We knew this wasn’t going to be a sprint – it would be a marathon,” he said. The Pandemic Aid Package “was designed to help us over a period of one year, not 60 days. A year. We never thought that after the first 50 or 60 days everything would be fine. Today there is more evidence that our economy is moving in the right direction. But it is clear that we still have a long way to go. “
Biden’s opponents say the legislation has exacerbated the problems in at least one way, with increased unemployment benefits giving the unemployed a reason to stay home instead of looking for work.
The president said the job data doesn’t show that. And proponents of its plans can argue that the report shows that more spending is needed to keep the economy going.
There are also problems with supply shortages for computer chips and lumber, which are holding back growth. This is a reminder that the world’s largest economy seldom perfectly matches the wishes of the legislature.
The fate of the president’s agenda could depend on how the public processes and understands the April job report in the coming weeks, said Jon Lieber, executive director of Eurasia Group, a political risk consultancy and advisory firm.
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“Can Republicans use this to say, ‘This is what happens when the government interferes with the economy and messes things up?’ Or does the public see this as a need for more government support? “Said Lieber.” That is the argument for the next month.
A clear aspect across the partisan borders was the need for caution in interpretation. A single monthly report can be volatile. The three-month average employment growth is still a healthy 524,000.
Michael Strain, an economist at the conservative American Enterprise Institute, noted that many companies have reported that they cannot find work despite increased hourly wages. Strain said he plans to monitor upcoming reports to see if this pattern is a worrying sign of Biden’s vision of how government spending can drive growth.
“If we continue to hear a growing chorus of companies complaining about labor shortages, and if wages keep rising, it will be tempting to conclude that many of the 8 million jobs we are currently missing are not returning,” said Strain.
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The U.S. Chamber of Commerce, which represents companies, blamed the relatively generous unemployment benefits Biden provided as part of his relief package. The group said the controls prevent people from taking jobs.
“One step that policymakers should take now is to end the $ 300 additional weekly unemployment benefit,” said Neil Bradley, chief policy officer for the chamber. “Based on the Chamber’s analysis, the $ 300 benefit means that roughly one in four recipients takes home more unemployment than they earned.”
Jared Bernstein, a member of the White House’s Council of Economic Advisers, said he heard that companies were having difficulty finding workers, but he did not see those concerns in the employment report. For example, restaurants and bars created 187,000 jobs in the last month, although in theory workers in this relatively low-wage sector would have an incentive to just collect unemployment.
The job report pointed to other factors that could bolster Biden’s agenda. It showed losses to women forced to care for children and relatives due to the pandemic. The family demands prevented them from working outside of jobs.
There was a drop of 165,000 among women over 20 who had or were looking for work in the past month. In contrast, men saw labor force participation increases by 355,000.
One way to bring women back could be Biden’s plans to fund childcare, set up a national family vacation program, and expand child tax credits through 2025. The idea is that government action is needed to open up the labor market.
“Apparently, when you start blinking at this data to find out what’s going on, you need more government to tackle a labor shortage,” said Michael Madowitz, an economist at the Liberal Center for American Progress.
House spokeswoman Nancy Pelosi cited the “disappointing” job report as evidence that Biden’s $ 4 trillion agenda must be approved quickly.
“The evidence is clear that the economy requires urgent action and it is not preventing or delaying Congress from making transformation investments for the people,” said the Democratic leader of the Congress.