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Yellen says US faces 'long road' back to recovery

Yellen says US faces 'long road' back to recovery
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Treasury Secretary Janet YellenJanet Louise YellenRepublicans open new line of attack on IRS Why the Democrats need Joe Manchin On The Money: Democrats wary of emerging bipartisan infrastructure deal, warn of time crunch MORE cautioned Friday that the U.S. faces a “long road” to economic recovery but described the latest jobs report from the Department of Labor as an indication the country is making progress.

“We knew it would be a long road back to the recovery. That’s why the legislation provided lasting support rather than just a few months of relief. We knew this would not be a 100-day battle,” Yellen said at a White House press briefing. “Today’s jobs report underscores the long haul climb back to recovery.”

The U.S. economy added 266,000 jobs during the month of April and the unemployment rate rose to 6.1 percent, according to the Labor Department. The numbers came in far below economists’ expectations. 

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Yellen said that the added jobs represent “continued progress” and said she believed the U.S. would reach full employment next year. She also argued that the April jobs report was better than the topline number, noting additions in leisure and hospitality, a sector that has been among those hardest-hit during the coronavirus pandemic.

Yellen also acknowledged that she would have predicted a higher number of jobs gains but noted the volatility of the market, adding that she believed the economic recovery remains “on track.”

“It may be bumpy from month to month for a variety of factors,” Yellen said. “One should never take one month’s data as an underlying trend.”

Republicans have seized on the figures to criticize President BidenJoe BidenBiden prepares to confront Putin Ukrainian president thanks G-7 nations for statement of support Biden aims to bolster troubled Turkey ties in first Erdoğan meeting MORE’s $1.9 trillion coronavirus relief bill, which Democrats passed without GOP support in March. The law provided a broad range of economic assistance to American workers and businesses and states and local governments, while also funding a nationwide vaccine program.

Biden and other officials defended the relief plan on Friday, saying it provides needed assistance to prop up the economy over the next year.

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Yellen also pushed back on claims that the expanded unemployment benefits included in the bill incentivized people not to work.

The U.S. Chamber of Commerce on Friday called for an end to the supplemental benefits, arguing that “paying people not to work is dampening what should be a stronger jobs market.”

“When we look across states or across sectors or across workers, if it were really the extra benefits that were holding back hiring, you’d expect to see that either in states or for workers or sectors where the replacement rate for [unemployment insurance] is very high you’d expect to see lower job finding rates, and in fact what you see is the exact opposite,” Yellen said. “We have had a very unusual hit to our economy, and the road back is going to be somewhat bumpy.”

Yellen said that the Biden administration has heard from businesses that they are experiencing difficulty hiring but noted that other factors are at play, such as absence of child care, irregular school schedules and ongoing concerns about the pandemic.