Jobs report poised to boost or hinder Biden’s agenda
President Biden is looking for fireworks in the June jobs report due out Friday as the White House makes a renewed push for its economic agenda heading into the long Fourth of July weekend.
A strong employment report could bolster the White House’s efforts to prove Biden’s economic agenda is working as the administration faces pressure over months of lackluster job gains and rising prices. Even so, economists say the U.S. has not yet been able to declare its independence from COVID-19’s weight on the labor market.
Economists expect the U.S. to have added roughly 700,000 jobs in June, compared with the previous month’s 559,000, bringing the unemployment rate down 0.1 percentage point to 5.7 percent. Analysts say a wide range of private sector data measuring payrolls, travel and mobile purchases have shown consumer activity hitting new pandemic highs—all positive signs for the job market.
“There have been really striking improvements, and a lot of high frequency indicators of economic activity point in the direction of increased employer demand for workers,” said Julia Pollak, labor economist at ZipRecruiter.
Faster job growth would provide a boost to Biden and top administration officials as they try to rally public support for trillions in proposed infrastructure spending. A blockbuster June report could also weaken some GOP criticism of Biden’s push for more government spending after two consecutive months of jobs data that missed the mark in terms of Wall Street’s expectations.
“June’s Jobs Report is a ‘make or break’ moment for the Biden Administration,” said Republican lawmakers on the House Ways and Means Committee in a Thursday release.
“After two consecutive months of underwhelming job reports, a third monthly disappointment would reveal more broken promises by President Biden.”
The U.S. has gained an average of 540,000 jobs each month since March, well below the seven-digit monthly job gains some economists expected to come by summer. At the same time, both job openings and quits have reached record highs as millions of unemployed workers hold off on taking the first positions and lowest wages available.
The White House may be eager for good news ahead of the holiday weekend. But economists warn that the economy has not yet been able to shake the lingering effects of the coronavirus pandemic.
“We’ve never had a labor market so constrained not only by public health, but an individual’s perception of their health risk. And we’ve never had a labor market so constrained by care,” said Kathryn Anne Edwards, an economist with the RAND Corporation.
“I hesitate to say that we’re past the point where the pandemic is constraining the labor market, simply because it might be past that point for richer … whiter communities, but certainly not for communities that still have low vaccination rates.”
Republicans and some right-leaning economists argue that Biden’s March extension of expanded unemployment benefits is the biggest weight on job growth. More than two dozen governors, almost all Republicans, have agreed with that argument and pulled millions of their residents out of those programs.
Survey results released Tuesday by job listing site Indeed pointed toward a much wider range of reasons why hiring has fallen short of expectations despite 9 million job openings.
“Most people have multiple problems in getting into the labor force, so we don’t have a way of discerning which one is the driving factor,” Edwards said. “I don’t see unemployment benefits really acting as the cause. It’s probably more of an enabler of another cause.”
Of the job seekers interviewed by Indeed who said they weren’t urgently searching for employment, more than 40 percent said it was because of COVID-19 fears or child care responsibilities.
About 20 percent said it was because their spouse was employed, and slightly fewer said they had a big enough financial cushion. Only 10 percent said their lack of urgency was because of unemployment insurance.
The steep decline in women’s labor force participation — and the disproportionate toll on Black and Hispanic women — is where many of those factors come together. Women dropped out of the labor force at a far greater rate than men because they worked in greater numbers in industries hit hardest by the pandemic and took on child care responsibilities when schools closed.
“I am deeply concerned about the 2-plus million women who have stepped out. We need them desperately,” said Jane Oates, a Labor Department official in the Obama administration who now serves as president of the nonprofit WorkingNation.
“I don’t mind if the unemployment rate goes up if the labor force participation rate goes up because we need more people actively looking to fill these jobs.”
Economists are largely confident that the U.S. economy will be free of most pandemic-related constraints by autumn, with major job growth to follow. Several experts also said that the delays in hiring could yield benefits for the economy if workers are adding new skills or holding out for jobs aligned with their expertise.
“The purpose of unemployment benefits is to give you a cushion so that you can try to find the best job,” Edwards said.
“It’s a net loss for the economy to lose that human capital and experience.”