The Bureau of Labor Statistics issued their monthly report early this Friday, announcing lacklustre employment growth rates and an almost unchanged rate of unemployment. According to the BLS, the private sector only created an anaemic figure of 266,000 new jobs in April while the rate of unemployment remained at 6.1%, with almost 9.8 million people unemployed in the U.S.
The unemployment figures varied significantly depending within various demographic groups, with white males having lower figures than the national average (5.3%) while Hispanics and African Americans showed a higher rate of unemployment than the nation (9.7% and 7.9% respectively).
The report showed that although the economy has shown significantly better numbers than those recorded at the height of the pandemic, the job market has yet to recover to the pre-pandemic status. For example, the number of people that were on temporary layoff was 2.1 million, a significant decrease from the 18 million registered during mid-2020 but still higher than the 1.4 million number registered during February of 2020.
Is the lacklustre employment growth a consequence of the Biden economy?
The results come even after the Biden administration has spent a large amount of money trying to restart the economy after the recession caused by the COVID pandemic and have also disappointed economic analysts, many of whom expected that April would register far higher (up to 1 million new posts) job creation numbers than those reported by the BLS.
The current success of the vaccination rollout also raised hopes for those who expected better numbers for the labor market. Nevertheless, it appears that even if a significant amount of the US adult population is already vaccinated, this has not reflected in more people actively looking for jobs (a definition known as “in the labor force”) with 61.7% of the population’s working-age being part of the labor force in April 2021, a little change from early figures.
The disappointing results have awakened criticisms by some business leaders in the country, with many of them aiming directly at the Biden administration’s handling of the economy as a direct cause of the anemic job creation rate.
The U.S Chamber of Commerce criticized the low job creation rates on the economic policies of Biden, saying that “paying people not to work is damaging what should be a stronger jobs market”
Even House Speaker Nancy Pelosi said that the Bureau’s report was “disappointing” and Secretary of the Treasury Janet Yellen said that even if she believes that full employment would be reached “next year” there is still significant work to be done in a press conference with White House Press Secretary Jen Psaki early this Friday.
Although there has been criticism on the economic relief schemes that the Biden administration has unveiled over the last few months, there are no signs from the administration that the disappointing employment numbers will force a change of tack in the economic plans of the Democratic government.
Pelosi said the only way to overcome these terrible numbers on employment “highlights the urgent need to pass President Biden’s American Jobs and Families Plan”, while Secretary Yellen said that the extensive unemployment benefits that were proposed and implemented by the White House is “not really the factor that is making the difference” on the stagnant job market.
The numbers published by the BLS will surely present a new headache for the Biden White House, as it gives Republicans the opportunity to criticize the Democratic government of engaging in expensive government plans without an increase in employment for the general population.
With Biden also planning to pass another trillion-dollar Infrastructure Plan and a new expansive “American Families Plan” through Congress a lack of employment growth will not help him to sell the effectiveness of his plans in the Senate, as he would need every single Democratic vote in his column if he wants to get any of his plans becoming law.
Democrats have planned to use their skinny majorities to pass ambitious spending plans that would hopefully endear them with the average voter; however, for that to work, the employment numbers need to start growing at a higher rate and fast.