News & Politics
Premium

The Real Reason the October Jobs Report Was So Good

AP Photo/Evan Vucci

Joe Biden got one of the best jobs reports of his presidency on Friday, with the economy adding 531,000 jobs in October and unemployment dropping to a post-pandemic low of 4.7 percent.

And Biden wants us to think it’s because of him.

“This did not happen by accident or just because,” Biden said before crediting his $1.9 trillion stimulus plan from earlier this year.

“We laid the foundation for this recovery with my American Rescue Plan that Congress passed at the beginning of my term,” Biden claimed. “It put money in working families’ pockets. It gave families with kids a tax cut each month. It helped keep small businesses going in the dark days earlier this year.”

But, job creation and economic growth have struggled most of this year, undermining Biden’s claim that the American Rescue Plan got Americans back to work. Moreover, Biden himself noted that the positive trend in unemployment claims is relatively recent.

“New unemployment claims have fallen every week for the past five weeks, are down by more than 60 percent since I took office, and are now at the lowest level since the pandemic started,” he said.

Five weeks ago was September. What happened in September? The expiration of pandemic-related unemployment benefits that the 2020 CARES Act established.

Four different types of federal unemployment benefits ended on September 6, 2021: Federal Pandemic Unemployment Compensation, Pandemic Emergency Unemployment Compensation, Mixed Earners Unemployment Compensation, and Pandemic Unemployment Assistance. Approximately seven million Americans lost these benefits, and the link between the expiration of those benefits and Americans getting back to work is too strong to ignore.

“Recent data […] has shown a progressive drop in weekly jobless claims, the result in good part from enhanced unemployment benefits expiring,” noted CNBC.

“After rounds of federal stimulus money, unemployment insurance and a child-care tax credit, households — collectively, at least — built up a cushion during the pandemic,” the Wall Street Journal reported. “However, those savings — which at one point exceeded $2 trillion, according to private sector estimates — have dwindled, though they remain elevated. As savings come down, some adults will return to the workforce starting in the winter, some economists say.”

The Biden administration has refused to acknowledge the link between the benefits and the labor shortage crisis.

Related: There’s Good Economic News, But It’s Mostly from Republican-Run States

Biden previously denied that pandemic unemployment benefits were incentivizing people to remain out of work. “I know there’s been a lot of discussion since Friday’s report that people are being paid to stay home rather than go to work,” Biden said back in May. “Well, we don’t see much evidence of that.”

In August, White House Press Secretary Jen Psaki also denied there was any link between states like seeing jobs gains after ending pandemic unemployment benefits early. “We don’t see any evidence in the available data that some states ending unemployment benefits early had any impact on today’s incredibly strong numbers,” she said after the release of the July jobs report.

But, the states leading in jobs recovery are those with Republican governors, many of which just happened to end pandemic unemployment benefits early.

Biden wants everyone to believe his policies are the cause of America returning to work. In reality, the new jobs report undermines Biden’s case for his Build Back Better agenda. Less government interference is the key to getting Americans back to work.