Accessibility links

Breaking News

Biden: Low Jobs Number Shows 'We Have a Long Way to Go'

FILE - A man walks out of a Marc's Store in Mayfield Heights, Ohio, Jan. 8, 2021. The Bureau of Labor Statistics reported May 7, 2021, that the U.S. economy added only 266,000 jobs in April.

The Biden administration moved quickly on Friday to allay concerns that a surprisingly weak jobs report issued by the Bureau of Labor Statistics suggests that the American Rescue Plan, a $1.9 trillion stimulus package that became law in March, is failing in its goal of revitalizing the economy.

Economists and policymakers in the U.S. were stunned Friday morning when the BLS reported that the U.S. economy, thought to be expanding at a rapid pace, added only 266,000 jobs in April. That was far short of the 1 million that many experts had been projecting and, combined with a downward revision of the jobs estimates from February and March, sparked concerns that the U.S. economy's recovery from the pandemic-induced recession might be slowing down.

During a White House briefing, Treasury Secretary Janet Yellen said that the purpose of the rescue plan had been "to provide enough relief for Americans to make it to the other side of the pandemic, with the foundations of their lives intact," and advocated for the administration's additional spending packages. She struck an optimistic note, saying, "I believe we will reach full employment next year. But today's numbers also show that we're not yet finished."

Treasury Secretary Janet Yellen speaks during a press briefing at the White House, May 7, 2021.
Treasury Secretary Janet Yellen speaks during a press briefing at the White House, May 7, 2021.

The unemployment rate rose slightly, from 6% to 6.1%, reflecting the 9.8 million Americans currently seeking employment who are unable to find it. Both numbers are far lower than they were during the worst of the recession, but remain well above the 3.5% unemployment rate and the 5.7 million unemployed recorded in February 2020, the month before COVID-19 began surging through the country.

The report showed stark disparities across different sectors of the economy, with the leisure and hospitality industries adding 331,000 jobs, largely because of the reopening of restaurants as virus infection rates decline and vaccination rates rise. However, other key industries, such as manufacturing, transportation, warehousing, retail and health care, all showed declines. The construction industry showed no net change in employment.

Biden reacts

President Joe Biden addressed the report at a White House press conference early Friday afternoon.

"You might think that we should be disappointed," he said. "But when we passed the American Rescue Plan, I want to remind everybody, it was designed to help us over the course of a year. Not 60 days. A year. We never thought that after the first 50 or 60 days everything would be fine. Today there's more evidence, our economy is moving in the right direction."

U.S. President Joe Biden delivers remarks on the April jobs report from the East Room of the White House in Washington, May 7, 2021.
U.S. President Joe Biden delivers remarks on the April jobs report from the East Room of the White House in Washington, May 7, 2021.

He said, "Some critics said that we didn't need the American Rescue Plan. That this economy would just heal itself. Today's report just underscores, in my view, how vital the actions we're taking are. Checks to people who are hurting, support for small businesses, for child care and school reopening, support to help families put food on the table. Our efforts are starting to work, but the climb is steep, and we still have a long way to go."

Experts caution against overreaction

Many experts admitted surprise at the new numbers but cautioned against overly gloomy assessments.

"I think we don't really have a playbook to pull out of the bookshelf, when it comes to reopening an economy, just like we didn't seem to have one for shutting it down," said Mark Hamrick, senior economic analyst for "I don't think that this undermines the thesis of an ongoing recovery."

However, Hamrick added, the lower-than-expected new jobs number combined with the net downward revision of the February and March reports does create some reason for concern, because revisions tend to reflect "the overall trajectory of the economy."

"If indeed we're entering into a period of slower recovery, we're going to have to watch that," he said. "Obviously, we don't want to give anything up with respect to further downward revision to April, given the fact that obviously it was a huge shortfall in the headline number. It absolutely means that it's something to watch, and it makes what was a disappointing report even more so."

American Jobs Plan

The report comes as Biden is pushing the American Jobs Plan, a massive $2.3 trillion proposal to rebuild infrastructure, create new jobs in the growing renewable energy sector and improve public housing stock. In his remarks Friday, Biden said that the Friday jobs report shows the need to pass his proposal.

"We can't let up. This jobs report makes that clear. We've got too much work to do, and the American Rescue Plan is just that, a rescue plan, just to get us back to where we were. But that's not nearly enough. We have to build back better. That's why we need the American Jobs Plan I proposed, to put us in a position where we can build back better to reclaim our position as the leading and most innovative nation in the world."

This disappointing report also gave new ammunition to supporters of more expansive government spending.

Democratic Representative Richard E. Neal of Massachusetts, who chairs the House Ways and Means Committee, said it remains "clear that Americans are still struggling and in need of sustained support."

"The moment to make big, bold investments in an economy that will finally prioritize workers and their needs has met us," Neal said, "and the Ways and Means Committee stands ready to join the Biden administration in delivering for the American people."

Unemployment benefits

Elise Gould, senior economist at the liberal Economic Policy Institute in Washington, wrote in a blog post that "as of the latest data, employment is still down 8.2 million jobs from its pre-pandemic level in February 2020. But, if we include the likelihood that thousands of jobs would have been added each month over the last year without the pandemic recession, the jobs shortfall is more likely in the range of 9.0 and 11.0 million. Now is not the time to turn off vital relief — including expanded unemployment benefits — to workers and their families."

However, that is precisely what some opponents of expanded relief to the unemployed are advocating. The U.S. Chamber of Commerce, like many in the business community, insists that higher-than-usual unemployment benefits are discouraging Americans from seeking jobs.

"The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market," said the chamber's executive vice president and chief policy officer, Neil Bradley, in a statement. "We need a comprehensive approach to dealing with our workforce issues and the very real threat unfilled positions pose to our economic recovery from the pandemic. One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit. Based on the chamber's analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working."

Other developed countries

While the United States continues to face considerable unemployment, the country is doing better, as a whole, than most other developed nations. Data released by the Organization for Economic Cooperation and Development last month showed that the U.S. unemployment rate was slightly lower than the OECD average in the early months of this year, at 6.2% compared with the groupwide 6.7%.

The U.S. is even further ahead of the Eurozone in terms of recovering jobs lost to the pandemic. Countries that are part of the shared currency regime posted average unemployment rates of 8.3% in March.

However, U.S. performance has trailed a number of large economies in the Asia-Pacific region on the same measure. At the end of February, when the U.S. unemployment rate stood at 6.2%, Australia's rate was 5.8%, South Korea's was 4.0%, and Japan's just 2.9%.