Biden says America is "on the move again" as unemployment rate dips to pandemic low
President Joe Biden said America is on the move again Friday after the latest jobs report showed employers added 559,000 jobs in May, closer to what economists anticipated after April's disappointing jobs report. While the president said he was "extremely optimistic," he warned there will be bumps along the way and urged Americans to get vaccinated. He also said now is the time to seize on the upward momentum.
This comes as the president is working to get a bipartisan agreement on infrastructure proponents say will boost employment, but talks have been slow as Republicans balk at the price and proposed measures to pay for it.
The unemployment rate fell to 5.8% in May down from 6.1% in April, the Labor Department said. But employment last month was still down about 7.6 million jobs from pre-pandemic levels, in February 2020. And 9.3 million people remain unemployed, potentially able to work. Mr. Biden said the U.S. is the only major country where projections of economic growth are better now than they were before the pandemic.
"No other major economy in the world is growing as fast as ours. No other major economy is gaining jobs as quickly as ours. And none of this success is an accident. It isn't luck," Mr. Biden said, crediting the American people for getting vaccinated and the administration's efforts to kill the virus and boost the economy with the passage of the American Rescue Plan in March.
The president touted the funds the U.S. is giving to small businesses to retain or hire more workers, and the funds the U.S. is giving to hard-hit restaurants to keep them afloat. Next month, most families with children will be receiving a tax credit every month, Mr. Biden also said. This month, the U.S. economy added nearly 20,000 childcare jobs that weren't there last month, he said.
Last month's increase in jobs comes after the previous month's jobs report showed the economy added roughly a quarter of the number economists had anticipated in April. Friday's report revised April's jobs numbers from 266,000 to 278,000 in the month following the passage of the president's relief package.
At the time, the president said the economy was improving despite the lackluster numbers. He argued the economic recovery would be a marathon and used the moment to promote the passage of his more than $4 trillion in proposed spending on the so-called American Jobs Plan and American Families Plan tackling infrastructure, families and health care. He continued to push for those plans on Friday.
"We need to make those investments today to be able to continue to succeed tomorrow," the president said Friday, adding that now is the chance to "seize" on the economic advances of the last few months.
The president is facing slow progress with negotiating on the infrastructure deal with Republicans. The White House has taken its proposal down from more than $2.25 trillion to $1.7 trillion. Republicans have also given their own counter-offer of $928 billion ahead of another round of talks this week. But there remains a massive gap between the president and Senate Republicans over new spending and how to pay for it.
Weekly initial jobless claims released earlier this week also hit their lowest level since the pandemic began, signaling a continued downward trend among layoffs and employer confidence. Federal data shows 385,000 people filed for unemployment aid last week, a drop of 20,000 from the previous week and the lowest level since March 14, 2020. Another 76,000 claims were filed for Pandemic Unemployment Assistance, a federal program for self-employed and gig workers not eligible for traditional benefits.
But as of mid-May, some 15.4 million people were still receiving some form of unemployment benefits. That includes roughly 6.3 million who were on pandemic assistance as well as more than 5 million people who received Pandemic Emergency Unemployment Compensation, a program created under the CARES Act last year for those facing long-term unemployment and have exhausted other benefits.
Last month, fueled in part by the disappointing April jobs report, a growing number of Republican governors announced they would end enhanced federal unemployment benefits in their states — including the $300 additional supplements and other programs starting this month. To date, half of states will be ending federal unemployment programs before they're set to end in early September. They've argued that the increased benefits have prompted unemployed workers to stay home leading to a workforce shortage. The Biden administration disagreed, noting continued hardship due to the pandemic such as a lack of child care and health concerns.
Biden said Friday those receiving the federal benefits may still be in the process of getting vaccinated. He did not address states ending the benefits early but said it "makes sense" for those benefits to expire in 90 days.
In the states where it was announced federal unemployment benefits would end early, job search activity increased relative to the national trend, according to Indeed Hiring Lab. On the day of the announcement, clicks on job postings were nearly 5% higher than in the last two weeks of April. However, the increase was temporary — extending just over a week after the announcement in each state.
A sign of good news for workers: Last month, average hourly wages rose by 15 cents, signaling competition for labor, following a 21-cent increase in April. The Labor Department said while demand for labor may drive wages up, demand varies widely across industries and the dramatic changes in employment since before the pandemic complicate analysis of the recent trend.
As the president left the room Friday, he answered a shouted question about whether he still has confidence in Dr. Anthony Fauci.
"Yes, I am very confident," the president responded.