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Biden calls for patience with economic agenda after weak jobs report fuels criticism

The White House wants to dramatically increase spending, but GOP leaders allege the approach is creating disincentives to work

In response to the April jobs report, President Biden on May 6 defended his coronavirus relief package and said economic recovery would be a marathon. (Video: The Washington Post)

The White House was put on the defensive Friday after April’s jobs report showed weaker-than-expected hiring, fueling criticisms of the administration’s economic agenda and teeing up new battles with Republican lawmakers.

The United States added about 266,000 jobs in April, with the unemployment rate essentially flat at about 6 percent, the report said. Many economists had predicted the pace of vaccine distribution and stimulus programs would help fuel a more rapid recovery. The 266,000 jobs amount to a major slowdown in the pace of hiring after close to 800,000 jobs were added in March.

The Biden administration has been careful to caution that the recovery will take time, but it still faces difficult questions over the anemic report. In remarks at the White House on Friday, President Biden called the report a “rebuttal” to the idea that some Americans do not want to work, “despite what you may have heard this morning.”

“More help is needed. … We’re still digging out of an economic collapse that cost us 22 million jobs,” the president said. “Let’s keep our eye on the ball.”

“We knew this wouldn’t be a sprint. It would be a marathon,” Biden said. “Quite frankly, we’re moving a lot more rapidly than I thought we would.”

Making her first appearance in the White House briefing room Friday, Treasury Secretary Janet Yellen said the report still showed the economy has produced about 500,000 new jobs on average over the past three months.

“I absolutely expect to see continued progress in the economy, probably bumpy,” Yellen said.

Economy picked up just 266,000 jobs in April, well below expectations as economy struggles to rebound

Democrats approved a $1.9 trillion stimulus package in March — without any Republican votes — that included a $300-per-week supplemental unemployment benefit. The GOP and many business groups argued the jobs report shows the unemployment benefit is discouraging workers from rejoining the labor market, as reports have emerged throughout the country of companies struggling to bring workers back on the job.

Democratic leadership, meanwhile, seized on the jobs report to argue for the need to approve the White House’s spending programs, such as for child care and infrastructure, which they say would accelerate the recovery. The vastly different take-aways from the report show the gulf between the White House and Republicans as they look at ways to try to help the economy going forward.

“When you dig into the report, it confirms everything we’ve been hearing anecdotally from employers. Employers are frankly competing with a very generous unemployment system,” Neil Bradley, executive vice president of the U.S. Chamber of Commerce, said in an interview. Bradley said the Chamber’s numbers suggest 1 in 4 workers receive more from unemployment than they did when they were working. The Chamber called for the end of the $300-per-week benefit.

White House grapples with reports of labor shortage, inflation as recovery picks up steam

Democrats and many nonpartisan analysts strongly dispute that interpretation. They have emphasized factors such as a lack of available child care, seasonal adjustments to unemployment data and ongoing challenges in reopening schools as the reason job growth came in weaker than expected. Other economists have also pointed to the long-term economic scarring inflicted by the pandemic.

In the briefing room, Yellen acknowledged that “there is no question we are hearing from businesses they are having difficulty hiring workers.” But she said that the data suggests the unemployment bonus is not the key factor.

Yellen said the evidence does not suggest particularly weak job growth in states and job sectors where workers stand to see particular benefits from collecting unemployment benefits relative to going back to their jobs. She pointed to strong growth in leisure and hospitality jobs, where wages are typically low.

“It’s clear there are people who are not ready and able to go back into the labor force,” Yellen said, citing the lack of child care and fear of the pandemic. “I don’t think the addition to unemployment compensation is really the factor making the difference.”

House Speaker Nancy Pelosi (D-Calif.) said in a statement Friday that the jobs report highlighted the case for approving investments in child care and other areas aimed at ensuring women can rejoin the labor market. Employment of women fell in April, while female labor-force participation also slipped, a troubling sign.

“As we see continued evidence that women and working parents have been hit hardest in the economy, we must invest in human infrastructure,” Pelosi said. “The evidence is clear that the economy demands urgent action.”

Republican lawmakers are moving in the other direction. The GOP governors in Montana and South Carolina have moved to cut federal unemployment benefits, arguing they are slowing down the recovery. Other GOP-run states may follow.

“Today’s disappointing jobs report is a result of the federal government incentivizing people to stay at home and seek enhanced unemployment benefits rather than finding a job, even as employers are actively looking for more workers,” Sen. Kevin Cramer (R-N.D.) said in a statement.

Jan Hatzius, chief economist at Goldman Sachs, said he did not believe the unemployment benefit was the most important factor in the jobs report, while acknowledging it may have had an impact. Hatzius pointed instead to the importance of how the federal government accounted for seasonal changes in the data, which may have artificially decreased the top-line jobs number.

“You always have to take every data release with a grain of salt, and I think this one you have to take with a rock of salt,” Hatzius told CNBC.