Friday, the Bureau of Labor Statistics will release May’s jobs report and it’s expected to be “unexpectedly” bad.
Employers are still desperate for workers but workers are taking their own sweet time getting back to work. The rate of people leaving unemployment is falling and a top Fed official is warning that the job numbers may look “odd.”
Lingering restrictions on some businesses in some states — bars and restaurants, especially — are putting the brakes on the economic recovery. It’s like putting the gas pedal to the floor while engaging the emergency brake. And some economists expect it to show up in Friday’s report.
Where are all the jobs, Joe? Whatever happened to “Build Back Better”?
April’s jobs report was a disaster. Instead of the million jobs created that were expected by economists, only 266,000 positions were filled. And March’s numbers — a robust 916,000 new jobs — were revised downward to 770,00.
The economic recovery is sputtering and it could spell big trouble for Biden’s inflationary agenda.
Democrats have downplayed the concerns, maintaining that the path back to full employment was always going to be winding and stacked with challenges. And economists are predicting the report will show 630,000 jobs were created in May, a robust number. But while Biden has been polling strongly on his handling of the economy, a second straight month of slower-than-expected job creation could embolden critics of his multitrillion-dollar infrastructure spending plans and raise fears that the labor market is facing a long road back to normal.
At the very least, weak numbers will blow up Biden’s agenda in the near future.
“There is growing anxiety about inflation, the economy overheating, unemployment not coming down fast enough and businesses that can’t find jobs,” said Brian Riedl, a former economic aide to Sen. Rob Portman (R-Ohio) and other GOP lawmakers. “Another bad jobs report may further the narrative of a White House overextending itself on stimulus and in over its head.”
For May’s numbers, most economists are cautiously optimistic, predicting up to 630,000 new jobs created. That’s a nice number but considering all that pent-up economic energy, it’s disappointing. Something or someone is holding the American economy back.
And it won’t be long before the American people start pointing fingers at the old man in the White House.
Some early data signal that job creation may not be roaring back. The Real-Time Population Survey, a tool backed by the Dallas Fed that aims to track unemployment trends more quickly than the Labor Department, saw a slowdown in the labor-market recovery in May, with employment ticking down to 71.1 percent from 71.8 percent the month before.
Many Republican governors have taken matters into their own hands and will end the extended unemployment benefits this month. Biden extended the original June deadline to September for benefits to expire.
It’s more than the unemployment benefits that are keeping workers off the job. There are child care issues and fears about the virus that are often cited as reasons for the lagging job numbers. That may be true, but it starts with people being given that option — to work or not to work — because of the extended unemployment benefits.
The inflation numbers are worrisome, but probably temporary — we hope. The premium placed on new hires is actually driving the cost of labor sky-high — another black mark against Biden. In all, Biden’s promises have failed to materialize while the warnings by his opponents appear to be coming true.
Biden’s tepid approval numbers will start heading south very quickly unless the president can turn the economy around and begin to make good on some of his grandiose promises.