Biden Says Jobs Growth to Accelerate, Crediting His Plans
(Bloomberg) -- President Joe Biden credited his vaccination campaign and the economic stimulus he signed into law in March for sustaining U.S. job growth, downplaying a report Friday that again showed hiring lagged economists’ expectations.
“This is historic progress, progress that’s pulling our economy out of the worst crisis it’s been in 100 years,” Biden said in Rehoboth Beach, Delaware. “No other major economy in the world is growing as fast as ours. None of this success is an accident. It isn’t luck.”
Noting that unemployment fell below 6% for the first time since the pandemic began last year, he applauded Americans for following his advice to wear masks and get vaccinated. He also credited the “bold action we took by passing the American Rescue Plan,” the $1.9 trillion relief bill he signed March 11.
Data from the U.S. Labor Department released Friday showed the jobless rate dropped to 5.8% in May as payrolls increased by 559,000, with many gains in employment coming in the leisure and hospitality industry.
The White House has been on the defensive following a weaker-than-expected jobs report in April and fears of rising inflation, as the U.S. economy comes back to life following Covid-19 lockdowns.
“We always knew it would be a bumpy ride, but this seems right in line with a strong economic recovery,” Heather Boushey, a member of the White House Council of Economic Advisers, said on Bloomberg TV Friday, referring to the jobs report. “When you look at the trajectory of job gains, this is much sharper than the recovery from the Great Recession” of 2007-09, she said.
The payrolls gain still leaves the U.S. labor market 7.6 million jobs short of pre-pandemic levels. Broader improvement will require faster job growth among service providers that have suffered a lengthier disruption from the health crisis.
Biden said Friday’s report was “based on a week in early May” when only about 35% of Americans were fully vaccinated and doesn’t reflect accelerating economic activity since then. The report typically reflects employment during the week containing the 12th day of the month, which in this case was the week of May 9.
Republicans criticized Biden for a second consecutive jobs report that fell short of economists’ expectations, again suggesting government payments such as extra federal jobless benefits are discouraging people from returning to work.
“Even with dumbed-down jobs expectations based on April’s disastrous report, here is another jobs report falling well short of expectations,” Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said in a statement. “Long-term unemployment is higher than when the pandemic started, and labor force participation mirrors the stagnant 1970s.”
On Thursday, White House officials cautioned that they expect the next few months of economic data to be uneven as vaccinated Americans start to resume normal life.
Labor Secretary Marty Walsh said he was encouraged by wage growth in the past month and what he described in an interview with Bloomberg Television as “decent” gains in manufacturing, education and leisure. Payroll gains falling short of economists’ expectations shows “we’re still recovering from a pandemic,” he said Friday.
“We can’t just flip a switch, but this is a positive positive report,” Walsh said.
Risks remain to the U.S. economy. Shortages in supplies like lumber and semiconductors threaten building and manufacturing sectors.
U.S. employers anecdotally have fretted about a lack of workers to accept all of the open jobs, particularly in hospitality. And the long-term effect of pumping $1.9 trillion into the economy from this year’s Covid relief bill also remains unclear, as the money continues to go to businesses and local governments.
Biden has said employers should raise wages to lure reticent workers back to their jobs, calling it a “feature” of his economic plan.
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