WASHINGTON -- President Joe Biden had promised an economy that would be firing on all cylinders in next year's fiscal year. But Friday's disappointing jobs report indicates that a slowdown could actually be looming in 2022's election cycle.
The modest gains of 194,000 jobs in Septuary were quickly taken up by Republicans. This is evidence that Biden’s $1.9 trillion coronavirus relief program, which was enacted six months ago, has not delivered as promised.
Instead, Biden chose to point out a drop of the unemployment rate from 4.8% to "real economic progression" as evidence of that -- even though it wasn't the boom he had been promoting months ago. Democrats also cited the latest jobs report to support their multitrillion-dollar tax plan and spending program to aid infrastructure, education, and child care. They claimed it was necessary to increase prospects for growth.
Biden took note of the heated debate in Washington over his spending plan and pleaded for patience when the jobs report was released.
"Turn on the TV and every conversation becomes a confrontation." He said that every disagreement is a crisis. But if you look back at the situation, you'll see that we are actually making progress.
He admitted that it might not seem fast enough. "I would like to see it move faster, and we're going to make it happen faster."
Although the jobs report showed an economy still recovering from the coronavirus epidemic, political spin can easily influence views about the speed and strength of this recovery. The U.S. economy can send contradicting signals because it is so diverse.
Republicans are correct to assert that Biden will not deliver the 7 million jobs he promised earlier in the year. Democrats can also highlight the strongest economic growth for decades.
Rep. Kevin Brady (Republican from Texas) was pleased to remind Biden that he had repeatedly cited Moody's Analytics' report that his relief package would create 7.2 million jobs. This is a number that is now unlikely.
According to the Republican, the infusion of government assistance has discouraged Americans from looking for jobs and Biden's proposal to raise corporate taxes is now scaring employers.
Brady stated that "Frankly, it's the president's leadership that is to blame." I believe that one reason economic optimism is falling across the board, not only with families, but also with businesses, is because people see the impending tax increases. They know that they will be devastating.
Nancy Pelosi, House Speaker, saw the jobs report "additional evidence" that there was a need to support the programs these taxes would support.
She stated that while President Biden and Congressional Democrats have made historic progress in creating jobs, lowering unemployment, and defeating the pandemic, they must do more.
Glen Bolger, a Republican strategist, and co-founder at Public Opinion Strategies noted that independent voters tend not to place as much importance on the economy, and their support will prove decisive in 2022 elections.
He stated that the latest jobs report "is not going to inspire confidence either in the policies of the Biden administration or the direction the nation's economic growth is going."
Bolger warned that it will be important to see how the economy is doing in the year ahead, when the voters start to vote. This is uncertain, but the jobs report provided reasons to be optimistic -- rising wages and increased hours worked.
The seasonal adjustments that saw local school districts lose 144,200 jobs in the last quarter of 2016 led to a decline in total job growth. This temporary setback will most likely be erased in future employment data.
President of the center-right American Action Forum Douglas Holtz Eakin said that the report indicated strong labor demand, which would be a positive sign for growth. The decline in hiring was likely due to the ongoing risk of the coronavirus' Delta variant. This means that the report won't have any impact on Biden’s efforts to pass his economic and social agenda through Congress.
He said, "I believe the politics remain the same." "The economy's substance is in good shape."
Biden used the Moody's Analytics jobs estimate, but it had a crucial caveat. It assumed that the coronavirus was under control by July 4. However, this was not the case. COVID-19 continued to be a burden on the economy due to the spread of the delta strain and the unwillingness of many Americans to get vaccinated.
Biden still relies on Moody's estimates to support his social spending package. He claims that the increase in child tax credit, shift towards electric vehicles, investments into passenger rail, and the establishment of universal prekindergarten programs would all boost economic capacity.
However, the slowdown in hiring doesn't mean Republicans are better at achieving growth. The September jobs report weakened one of their main talking points. They claimed that unemployment benefits would be eliminated in September, which would have created a rush for employment. But Friday's numbers show that it was the exact opposite.
In September, the labor force participation rate, which measures the percentage who are employed or seeking work, fell to 61.6%. This rate was 63.3% prior to the pandemic. To reach that level, another 4.3million people would have to join the U.S. labour force.
It is clear that an economy still struggling to recover from a pandemic is unique. It has seen unprecedented layoffs, historical levels of government assistance, surges of job growth and cooling off periods, as the virus asserted itself. This was in addition to the uncertainty created by employers and workers adapting to these circumstances.
Lily Roberts, the Center for American Progress' managing director of economic policies, stated that more economic analysis should focus on the relationship between economic growth and public health.
Roberts stated that "we need to adjust how this recovery will unfold." We can't expect it to happen naturally.