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Let Us Not Panic Over One Job Report, Says Biden's Labor Secretary
Economy

Let Us Not Panic Over One Job Report, Says Biden's Labor Secretary


The jobs report on Friday could show that the economy added nearly a million jobs last month, or it could be another bust, indicating that the United States will not recover as quickly as hoped from the coronavirus pandemic.

In any case, US Labor Secretary Marty Walsh cautions against reading too much into a single employment situation report.

“I hope it’s a good day, but you know, when I look at the economy, it’s not based on one day’s numbers, it’s based on a timeline,” Walsh said on Thursday to Stardia.

Walsh was the mayor of Boston until his appointment this year, and he said there is no reason to expect the recovery to be as quick as the shutdowns ordered by him and other mayors and governors last year.

“Restarting, getting people back to work, is like trying to rev up a big engine,” he said, adding that “we’d love to see it come back overnight, but that’s not how it works.”

However, a single poor job report can have far-reaching political ramifications.

Economists had predicted that the economy would add more than 700,000 jobs in April, but when the Labor Department announced only 266,000 jobs that month, Republicans slammed President Joe Biden's administration for the extra $300 the federal government has been adding to state unemployment benefits, claiming that the increase is causing a "labor shortage."

Some of the arguments being advanced by people make it appear as if we are acting as if there is no pandemic in this country.

Marty Walsh, Labour Secretary

Republican governors then rushed to cancel the extra $300, as well as new programs for gig workers, meaning that more than 4 million workers will lose benefits this month, rather than in September, as Congress intended.

Even though each new month of data is preliminary and subject to revision, it's possible that fewer people would be losing benefits if April's jobs report hadn't been so disappointing.

The expiration of benefits puts pressure on the administration from both the right and the left. Sen. Bernie Sanders (I-VT) said last month that the Biden administration should force states to continue paying at least some of the benefits, but the administration appears uninterested.

Walsh replied, "We're looking into it."

Many economists believe April's jobs report was a fluke and that they expect higher numbers in the coming months. ADP, whose monthly reports typically track the federal government's, reported this week that the economy added 978,000 jobs in May.

Economists have also questioned the notion that additional unemployment insurance is causing workers to refuse jobs, as many business owners have complained.

“It is difficult to disentangle the effects of pandemic-related concerns about contracting the virus or caring for others from those of UI benefits,” the Federal Reserve’s Lael Brainard said this week. “All of these factors are likely to diminish by autumn with the return to fully in-person school, continued progress on vaccinations, and the expiration of supplemental UI benefits.”

Walsh cited large job gains in restaurants as evidence of a labor shortage, noting that unemployment benefits are especially valuable relative to the low wages on offer in the food service industry. He also dismissed the notion that the federal government is doing too little.

“Some of the arguments that people are making, it’s almost as if we’re acting as if we don’t have a pandemic in this country,” he said, adding, “We still have a pandemic.”

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