White House sticks to its economic strategy as jobs report disappoints.
A disappointing jobs report released Friday by the Labor Department is posing the greatest test yet of President Biden’s strategy to revive the pandemic economic recovery, as business groups and Republicans push the president to end an expanded benefit for the unemployed that they say is causing a labor shortage and risking runaway inflation.
But administration officials say there is no evidence in the report — which found the economy added 266,000 jobs in April, well below the one million jobs many economists expected — that hiring has been slowed by the additional $300 per week that unemployed Americans are currently eligible to receive under the $1.9 trillion economic aid bill that Mr. Biden signed into law in March.
The officials stress that the monthly employment numbers are volatile and subject to revision, and that the average gain over the last three months remains well above the pace of job creation that Mr. Biden inherited when he took office in January. They say any clogs in the labor market are likely to be temporary, and that the recovery will smooth out once more working-age Americans are fully vaccinated.
“This is progress,” Heather Boushey, a member of the White House Council of Economic Advisers, said in an interview. “We are adding an average of over 500,000 jobs a month” over the last three months, she said. “That’s evidence that our approach is working, that the president’s approach is working. It also emphasizes the steep climb coming out of this crisis.”
Ms. Boushey and Jared Bernstein, another member of the council, both said they saw no evidence in the monthly report that expanded unemployment benefits were deterring Americans from going back to work. They pointed to a gain of 300,000 jobs in the leisure and hospitality sector and to a falling number of workers who told the department they had left the labor force out of concern over contracting Covid-19.
Critics of the expanded benefit saw the opposite: a clear indication in the report — and in survey data showing businesses are struggling to attract qualified applicants for jobs at the wages they want to pay — that it is time to end the expanded benefit.
“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber of Commerce, said in a news release. “We need a comprehensive approach to dealing with our work force issues and the very real threat unfilled positions poses to our economic recovery from the pandemic. One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit.”
Ms. Boushey and Mr. Bernstein rejected that view. They said that it appeared the economy was working through a variety of rapid changes related to the pandemic, including supply chain disruptions that have hurt automobile manufacturing by reducing the availability of semiconductor chips and businesses beginning to rehire after a year of depressed activity from the virus.
“It’s our view that these misalignments and bottlenecks are transitory,” Mr. Bernstein said, “and they’re what you expect from an economy going from shutdown to reopening.”
The chair of the Council of Economic Advisers, Cecilia Rouse, stressed the potential uncertainties in interpreting data from the pandemic in a blog post analyzing the report. “There is often month-to-month volatility in the jobs numbers,” she wrote. “However, the same ‘amount’ of volatility is more striking when the volume of changes is larger, as it has been during the pandemic.”
Source: Read Full Article