President Joe Biden could only hold on to job growth numbers as the COVID-19 pandemic was coming to a close. Now that the entire country is open and businesses aren’t forced to shut down, Biden can’t ride the coattail of reopening the economy anymore.
Job growth in May added 390,000 new jobs and the unemployed percentage stayed about the same at 3.6% (6 million) according to the Department of Labor (DOL). This is the third month that the unemployment rate stayed the same.
The DOL also reported that the unemployment number was just a little bit different than February 2020 when it was 3.5% (5.7 million) just before the COVID-19 pandemic kicked off.
Inside of the unemployed statistic, long-term unemployment, which is 27 weeks or more, was brought down to 1.4 million. That number is still 235,000 higher than February 2020. Long-term unemployment accounts for 23.2% of all unemployed persons.
Thomas Simons, economist at investment banking firm Jefferies Group told CNBC, “We probably are settling into a lower trajectory for job growth. The participation rate has recovered all of the dip we saw in the spring of 2020, related to COVID. I don’t think there’s a swath of people that are out of the labor force and on the cust of being brought back in. There’s roughly two job openings for every unemployed person.”
Unfortunately, small businesses had negative growth in job openings according to ADP. Businesses with 1-19 employees lost 78,000 jobs and businesses with 20-49 employees lost 14,000 totalling 91,000 lost jobs. You won’t hear the federal government bragging about that number.
ADP chief economist Nela Richardson said, “The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.”
This is a result of closing small businesses that have struggled since the beginning of COVID-19 while corporations and large businesses were allowed to stay open.
White House Press Secretary Katrine Jean-Pierre said, “As we transition to this new period of stable, steady growth, we aren’t looking to see blockbuster job reports a month after month, like we have over the last year. But that’s a good thing. That’s a sign of a healthy economy with steady job growth, rising wages for working Americans, everyday costs easing up, and a shrinking deficit. That stability will put us in a strong position to tackle inflation.”
Tackling inflation can also come from the government allowing the economy to grow and lowering taxes in the short term and incentivizing production of necessary products.
Jean-Pierre also said, “And in the short time since President Biden came into office, we have had record job numbers, record creation.”
That’s actually true, but why is it true? Because the economy opened back up again. That’s the simple answer. Biden’s administration didn’t create these jobs and the economy isn’t encouraging these jobs either. The jobs were waiting for “permission” from the government to be filled.