US Jobs Report: Just 266,000 new positions were created last month, well below estimates of 1 million. Here’s what both sides are saying. To have stories like this and more delivered directly to your inbox, be sure to sign up for our newsletter.
Top Story: US Jobs Report
Yesterday, President Joe Biden delivered remarks on the state of the US economy. A massive miss in April’s jobs report this past Friday is clouding a previously clear-eyed vision of what recovery looks like. Just 266,000 new positions were created last month, well below estimates of 1 million. According to Bloomberg, it was the biggest data miss on record. The official unemployment rate also rose to 6.1% from 6%, the first increase in 13 months. Now, the unemployment rate increase is partly due to the fact that more people are entering the labor force to look for jobs. A survey of small businesses also showed that 60% tried to hire people in April. A combination of these two factors makes the lackluster labor report that much more confusing. Why did it whiff if more people are in fact seeking jobs and more businesses are hiring? As with everything, it’s not related to one single factor, but here are some arguments from each side.
On The Left
The left believes the latest jobs report is evidence that more spending is needed to aid the American people through the back nine of the pandemic. Commentators also urge the public to not overreact.
Let’s begin with remarks from President Biden, who said the underwhelming unemployment figures highlight how important it is “to continue with big-ticket plans to subsidize infrastructure job creation, child care, and education,” Susan Milligan writes for US News & World Report. “We knew this wouldn’t be a sprint,” Biden said at the White House on Friday. Secretary of Commerce Gina Raimondo echoed this sentiment, saying on Face The Nation that “we have a long way to go to recover from the pandemic.” She noted there are “8 million fewer jobs than there were pre-pandemic and ‘there is nothing in the data’ suggesting enhanced aid is the reason why jobless Americans are not returning to the workforce,” Melissa Quinn reported for CBS. “Raimondo said the main reason why people aren’t returning to work is because of continued fear of the pandemic and an inability to find childcare while schools remain closed for in-person learning,” something Senator Elizabeth Warren alluded to as well.
Meanwhile, John Cassidy of the New Yorker calmly says: “Don’t Panic Over One Weaker-Than-Expected Jobs Report.” These figures are “noisy” he writes, “meaning that they tend to jump around.” More importantly, other economic indicators have been strong, he notes. GDP rose 6.4% in Q1, March retail sales surged almost 10%, and consumer confidence is at a pandemic-era high. And while “supply-side” concerns like “expanded unemployment benefits” and a “shortage of childcare” could play a role, “demand-side” constraints are probably a factor as well. Some employers might worry “about hiring back too many people too quickly,” he says. Ultimately, these jobs reports are fidgety. In May 2016, payrolls rose by just 38,000 jobs, Cassidy recalls. Republicans, including Donald Trump who was campaigning at the time, “said that the numbers demonstrated the failure of the Obama Administration.” Ultimately, “It turned out to be a blip. In both of the next two months, more than a quarter of a million jobs were created.”
Lastly, acknowledging “the restaurant industry [is] struggling to fill jobs,” Andrea Guzman of Mother Jones outlines the “real reason” women aren’t applying to these positions. “It’s not because they’re lazy” or that “government assistance turns people into welfare queens who don’t return to work because they’ve grown dependent on handouts,” she writes. In fact, a Yale study found “no evidence that more generous benefits disincentivized work either at the onset of the expansion or as firms looked to return to business over time.” In reality, “The reason servers and cooks and dishwashers are leaving restaurants en masse” is “because restaurant jobs by and large offer dismal wages and terrible working conditions, especially for women.” This is according to the One Fair Wage report, It’s a Wage Shortage, Not a Worker Shortage, which conducted online and phone surveys from last fall to this month. Guzman quotes Rep. Judy Chu (D-Calif.), who said this “She-cession” shouldn’t force anyone “to risk their life for a job that doesn’t pay the bills.”
On The Right
Conservatives and right-leaning commentators blame the lackluster payrolls report on a socialist attitude shift in Washington. Higher taxes and much too generous government aid are creating all the wrong economic incentives.
The Wall Street Journal Editorial Board says, “When you pay people not to work, guess what? Many people don’t.” The editors are of course referring to generous federal unemployment aid, pointing out that “Most lower-income workers can make more sitting on the couch.” Case-in-point is the fact “that half of the new labor market entrants last month were teens” — an age group that doesn’t “qualify for jobless benefits because of their short or nonexistent employment histories.” On the bright side, “For those who are working employers are paying more to attract and keep” new hires. With that said, “The risk is that these wage increases will lead to a more general inflation.” Ultimately, the editors think the government should repeal enhanced unemployment benefits and the “Biden tax increases that are a frontal attack on investment and supply” should be withdrawn.
Charles Gasparino strikes a similar tone in The New York Post. “Economics is all about incentives,” he writes, “and if you incentivize people not to work, they will drop out of the labor force, and unemployment will rise.” He believes the massive miss on Friday boils down to three factors. First and foremost, “The primary source of the problem is extended unemployment, with hundreds of extra dollars tacked on to regular benefits.” Secondly, Gasparino says, “Some businesses are putting the brakes on hiring as they brace for Biden’s planned tax increases.” Lastly, “Thanks to the powerful teachers unions and their sway with Democrats, many schools remain shuttered, forcing parents to stay home with their kids.” Ultimately, Gasparino opines, “The least efficient ways to run an economy is to have the government be the driver of it. If so, Europe would be awash in jobs, and the old Soviet Union would still be in existence.”
Lastly, A.J. Rice of RealClearMarkets notes that “Under former President Trump, there was full employment and record job growth.” Now, however, “There is a different president — and a different attitude.” Rice says “Instead of back-to-work,” the mentality is “get-on-the-dole. And stay there.” He claims this attitude shift from DC is part of a larger issue. “Soviet-style government in America created this problem,” Rice writes. “Because it is in the interests of Soviet-style government to make people desperate — and then dependent — on government.” Fortunately, he states there is “is a cure for this sickness” and “it is not being administered by Dr. Fauci – or Joe Biden – but by men like South Carolina Governor Henry McMaster, who has decided to turn off the federal ‘supplemental’ unemployment teat – in order to encourage people to get back to work.” Ultimately, “Unemployment isn’t supposed to be a lifestyle, a kind of golden ticket to an endless buffet of other people’s money,” Rice says. “Time to work for a living.”
Flag This: US Jobs Report
According to a Reuters/Ipsos poll at the end of April, 52% of Americans said they liked President Biden’s handling of the economy. Moreover, 53% said the same about his impact on US jobs. Democrats will likely point out how both of these responses are a “few percentage points higher than Trump’s marks on jobs and the economy during his final month in office.” Republicans, meanwhile, will argue this polling was done before last Friday’s jobs report and that Biden inherited an economy poised for recovery thanks to the Trump administration. Both sides are contorting the data to support their agendas. The next economic data points to follow are April’s consumer price index and core CPI figures. These are inflation metrics that will likely highlight what we already know: prices are rising everywhere. Consumer prices jumped 2.6% in the year ending in March — the biggest 12-month increase since August 2018. If April’s data tops March, expect more political finger-pointing to unfold.
Flag Poll: US Jobs Report
What do you think of the current unemployment predicament taking place in the US? Do you think the Biden Administration is properly addressing the issue? Comment below to share your thoughts.