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Friday’s jobs report could say the economy added nearly a million jobs last month ― or it could be another bust, signaling that the U.S. won’t bounce back from the coronavirus pandemic as quickly as hoped.
Either way, U.S. Labor Secretary Marty Walsh says people shouldn’t read too much into a single employment situation report.
“I hope it’s a good day, but you know, but when I look at the economy, it’s not based on one day’s numbers, it’s based on a timeline,” Walsh told HuffPost on Thursday.
Walsh was the mayor of Boston until his appointment this year, and he said there’s no reason to expect the recovery to happen as fast as the shutdowns he and other mayors and governors ordered last year.
“Restarting, getting people back to work, is like a big engine, trying to get it revved up,” he said. “We’d love to see it come back overnight, but unfortunately that’s not how it works.”
But a single bad jobs report can have major political consequences.
Economists had expected last month’s report to show the economy added more than 700,000 jobs in April. When the Labor Department instead announced only 266,000 jobs that month, Republicans hammered President Joe Biden’s administration over the extra $300 the federal government has been adding to state unemployment benefits, saying the boost is causing a “labor shortage.”
Some of these arguments that people are making, it’s almost as if we’re acting as if we didn’t have a pandemic in this country.
Labor Secretary Marty Walsh
Republican governors then rushed to cancel the extra $300 along with new programs for gig workers. More than 4 million workers will start losing the benefits this month instead of in September as Congress intended.
It’s possible fewer people would be losing benefits if April’s jobs report hadn’t been so disappointing, even though each new month of data is preliminary and gets revised repeatedly.
The expiring benefits put pressure on the administration from both the right and the left. Sen. Bernie Sanders (I-Vt.) said last month that the Biden administration ought to force states to continue paying at least some of the benefits, but the administration seems uninterested in doing so.
“We’re looking into that,” Walsh said.
Many economists said April’s jobs report was probably a fluke and that they expect bigger numbers in the months ahead. The payroll processing firm ADP, whose monthly reports usually track the federal government’s, said this week the economy added 978,000 jobs in May.
Economists have also cast doubt on the idea that extra unemployment insurance is causing workers to refuse jobs, as many business owners have complained.
“It is difficult to disentangle the effects of concerns about contracting the virus or caregiving responsibilities brought on by the pandemic 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 in early September ― or earlier, in many states.”
Walsh pointed to the big job gains in restaurants as evidence against a labor shortage. The food service industry is one where unemployment benefits are especially valuable relative to the low wages on offer. He scoffed at the notion the federal government is doing too little.
“Some of these arguments that people are making, it’s almost as if we’re acting as if we didn’t have a pandemic in this country,” he said. “We still have a pandemic.”
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