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Biden calls for patience with his economic agenda after weak jobs report fuels criticism

WASHINGTON - The White House was put on the defensive on Friday after April's jobs report showed weaker-than-expected hiring, fueling criticisms of the administration's economic agenda and teeing up new battles with Republican lawmakers. 

The U.S. added about 266,000 jobs in April, with the unemployment rate essentially flat at about 6%, the report said. Many economists had predicted the pace of vaccine distribution and stimulus programs would help fuel a more rapid recovery. The 266,000 jobs amount to a major slowdown in the pace of hiring after close to 800,000 jobs were added in March.

The Biden administration has been careful to caution the recovery will take time, but still faces difficult questions over the anemic report. In remarks at the White House Friday, the president called the report a "rebuttal" to the idea that some Americans do not want to work "despite what you may have heard this morning."

"More help is needed ... We're still digging out of an economic collapse that cost us 22 million jobs," the president said. "Let's keep our eye on the ball."

"We knew this wouldn't be a sprint. It would be a marathon. Quite frankly, we're moving a lot more rapidly than I thought we would."

Making her first appearance at the White House briefing room on Friday, Treasury Secretary Janet Yellen said the report still showed the economy is producing about 500,000 new jobs on average over the last three months.

"I absolutely expect to see continued progress in the economy, probably bumpy," Yellen said.

Democrats approved a $1.9 trillion stimulus package in March without any Republican votes that included a $300 per week supplemental unemployment benefit. The GOP and many business groups argued the jobs report shows the unemployment benefit is discouraging workers from rejoining the labor market, as reports have emerged throughout the country of firms struggling to bring workers back on the job.

Democratic leadership, meanwhile, seized on the jobs report to argue for the need to approve the White House's spending programs, such as childcare and infrastructure, that they say would accelerate the recovery. The vastly different take-aways from the report show the gulf between the White House and Republicans as they look at ways to try and help the economy going forward.

"When you dig into the report, it confirms everything we've been hearing anecdotally from employers. Employers are frankly competing with a very generous unemployment system," said Neil Bradley, executive vice president of the Chamber of Commerce, in an interview. Bradley said the Chamber's numbers suggest one in four workers receive more from unemployment than they did when they were working. The Chamber called for the end of the $300 per week benefit.

Democrats and many nonpartisan analysts strongly dispute that interpretation. They have emphasized factors such as a lack of available childcare, seasonal adjustments to unemployment data, and ongoing challenges in reopening schools as the reason jobs growth came in weaker than expected. Other economists have also pointed to the long-term economic scarring inflicted by the pandemic.

In the briefing room, Yellen acknowledged "there is no question we are hearing from businesses they are having difficulty hiring workers." But she said that the data suggests the unemployment bonus is not the key factor.

Yellen said the evidence does not suggest particularly weak job growth in states and job sectors where workers stand to see particular benefits from collecting unemployment benefits relative to going back to their jobs. She pointed to strong growth in leisure and hospitality jobs, where wages are typically low.

"It's clear there are people who are not ready and able to go back into the labor force," Yellen said, citing the lack of childcare and fear of the pandemic. "I don't think the addition to unemployment compensation is really the factor making the difference."

House Speaker Nancy Pelosi, D-Calif., said in a statement on Friday that the jobs report highlighted the case for approving childcare and other investments aimed at ensuring women can rejoin the labor market. Employment of women fell in April, while female labor force participation also slipped in a troubling sign.

"As we see continued evidence that women and working parents have been hit hardest in the economy, we must invest in human infrastructure," Pelosi said. "The evidence is clear that the economy demands urgent action."

Republican lawmakers are moving in the other direction. The GOP governors in Montana and South Carolina have moved to cut federal unemployment benefits, arguing they are slowing down the recovery. Other GOP-run states may follow.

"Today's disappointing jobs report is a result of the federal government incentivizing people to stay at home and seek enhanced unemployment benefits rather than finding a job, even as employers are actively looking for more workers," Sen. Kevin Cramer, R-N.D., said in a statement.

Jan Hatzius, chief economist at Goldman Sachs, said he did not believe the unemployment benefit was the most important factor in the jobs report, while acknowledging it may have an impact. Hatzius pointed instead to the importance of how the federal government accounted for seasonal changes in the data, which may have artificially decreased the topline jobs number.

"You always have to take every data release with a grain of salt, and I think this one you have to take with a rock of salt," Hatzius told CNBC.

 

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