Jobs data fuels fight on Biden policies
Dems, GOP spar over inconclusive numbers
WASHINGTON — The inconclusive employment report on Friday gave ammunition to both political camps, fueling Republican complaints that the White House’s agenda is holding back the U.S. economy, while Democrats said it helps demonstrate the case for President Joe Biden’s jobs proposals.
Mr. Biden called the job gains in the report “historic progress” in a speech from Rehoboth Beach, Del.. “It’s testament to the new strategy that growing this economy, not only growing it, we’re going from the bottom up in the middle out.”
“It should be surging,” Rep. Kevin Brady, R-Texas, the top Republican on the House Ways and Means Committee, said of the economic recovery on a call with reporters. Mr. Brady blamed Mr. Biden’s proposal for tax increases and spending efforts, including the $1.9 trillion stimulus that the GOP unanimously opposed, as the reason the recovery in his view has slowed. He added that Mr. Biden’s “policies are clearly holding America back economically.”
The report showed economic progress as the nation rebounds from the coronavirus and the vaccination campaign accelerates across the country, with employers adding about 559,000 jobs in May. But it included some troubling signs as well, as roughly 8 million Americans remain out of work compared to before the pandemic. Initial hopes that the U.S. economy would rapidly recover all the lost ground from the pandemic have now all but fizzled, putting new pressure on policymakers to take further action.
“Now is the time to build on the foundation we’ve laid. While progress is undeniable, it is not assured,” Mr. Biden said in his speech. “We have a chance to seize on the economic momentum from the first months of my administration.”
The president also said that it “makes sense” for enhanced unemployment benefits to expire in September, as they are set to under
current law, following intense criticisms from the GOP and business groups that they are discouraging workers from rejoining the labor market.
White House press secretary Jen Psaki also signaled a dramatic shift Friday in the administration’s posture on the unemployment benefits. She said Republican governors who have cut the benefits “have every right to,” and she evaded a question about whether the administration believes the benefits are contributing to a slower pace of job growth.
“That’s a really difficult thing to analyze,” she said.
Ms. Psaki’s message Friday was markedly different from comments she made after last month’s jobs report.
“We are seeing little evidence that enhanced unemployment benefits are currently impacting or affecting Americans’ willingness to work,” she said in early May.
In his remarks, Mr. Biden pointed to projections by the Organization of Economic Cooperation and Development that showed the U.S. economy would grow at 6.9% this year, which would be the fastest pace in about four decades. The White House has pointed out that no other major country besides the U.S. is now projected to grow faster than expected before the pandemic, a fact the administration attributes to the $1.9 trillion relief plan approved by Democrats this spring.
“No other major economy in the world is growing as fast as ours,” Mr. Biden said. “No other major economy is gaining jobs as quickly as ours.”
Restaurants, bars and other parts of the service sector drove much of the increase in hiring despite the complaints about a labor shortage. The unemployment rate ticked down to 5.8%, the lowest rate since before the pandemic. Wages also grew relatively quickly, rising by an annualized rate of 7.2% — likely faster than any period since the 1980s — said Jason Furman, an economist who served in the Obama White House.
Still, the number of people participating in the labor market held largely steady, a worrisome indicator for an economy supposed to be springing back to health. April showed particularly sluggish jobs growth. And employment in construction fell as that industry struggled with high lumber prices and uncertainty related to supply chain bottlenecks that have plagued the economy. The U.S. is not expected to return to its prepandemic employment levels for more than a year at the current rate of growth.
“It’s not an eye-popping report, but a very solid one — right down the fairway,” said Mark Zandi, chief economist at Moody’s Analytics, in an interview. “Half a million [new jobs] in any other time would be boom-like, but it’s ‘meh’ in the sense we’re still down 7.6 million jobs from pre-pandemic times.”
Republicans were quick to point to the shortcomings in the report and argue it underscores the weakness of Mr. Biden’s economic policies.
“As we emerge from the virus, our economy should be booming, but today’s lackluster jobs report shows President Biden’s policies have stalled our recovery,” House Minority Leader Kevin McCarthy, R-Calif., wrote on Twitter. “Washington needs to stop paying people NOT to work. Bidenomics is bad for America.”
Republicans have in particular seized on the $300 per week unemployment benefit approved by Democrats as part of the stimulus package in March as holding back hiring. Those payments will soon stop in more than 20 states, all run by Republicans.