U.S. economy is 'on the move,' Biden says as jobs jump

By Andrea Shalal and Howard Schneider

WASHINGTON (Reuters) – U.S. President Joe Biden and top administration officials hailed Friday’s strong monthly jobs report, saying it was a sign that the White House’s economic and pandemic-fighting strategies were working.

“This is historic progress, pulling our economy out of the worst crisis in 100 years, driven in part by our dramatic progress in vaccinating our nation and beating back the pandemic as well as other elements of the American Rescue plan,” Biden said in remarks at the White House.

“To put it simply, our economy is on the move,” the Democratic president said.

The $1.9 trillion American Rescue Plan, which passed Congress in March without any Republican support, pumped money into businesses, households and local governments.

The Labor Department reported on Friday that U.S. businesses added 850,000 workers in June, ahead of analyst expectations and a sign the economic recovery may be accelerating.

“None of this happened by accident,” Biden said, calling the strong numbers a “direct result” of a plan that some had questioned. “Well it worked,” he said.

More than 22 million jobs evaporated when schools and businesses were shut down in March 2020 to try to stem the spread of the coronavirus; the United States is now about 6.7 million jobs below pre-pandemic levels.

GRAPHIC: The jobs hole facing Biden and the Fed – https://graphics.reuters.com/USA-ECONOMY/JOBS/jbyprzlrqpe/chart.png

Friday’s report suggests the United States may return to pre-pandemic employment levels earlier than once expected, White House economic adviser Jared Bernstein said in an interview with Reuters.

The Congressional Budget Office’s new economic forecast, released Thursday, “shows that the unemployment rate, in their expectation, hits 3.6% by the end of next year,” Bernstein said. “That’s close to a 50-year low,” he said.

Previously, the year-end CBO unemployment rate forecast was about 5%, he noted.

FLIPPING THE SCRIPT

Biden also highlighted the jump in wages, which increased 0.3% overall in June from the month before and were up 3.6% from the year before.

“The strength of our recovery is helping us flip the script. Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers,” he said.

Businesses have complained about the lack of workers available. About half of U.S. states, most of them led by Republicans, are suspending special unemployment benefits that were included in the American Rescue Plan, to push people back into the workforce.

GRAPHIC-A (mostly) red state roll off – https://graphics.reuters.com/USA-ECONOMY/EMPLOYMENT/oakpedgnkvr/chart.png

Continuing claims for still-available local unemployment benefits have fallen faster in those states since mid-May, but it is too early to know whether the policy has led to faster job creation.

The White House is studying areas where jobs aren’t improving, Labor Secretary Marty Walsh told Reuters in an interview, adding it will be months before the United States returns to pre-pandemic levels across the board.

“We need to focus on areas that might not be growing – is there something else happening? Lack of supply? Permitting? Who knows what it might be,” he said.

“There are lots of factors here in people coming back to work, health reasons, their industry is gone,” Walsh said. The U.S. economy needs further investment, he added.

(Reporting by Andrea Shalal, Howard Schneider and Pete Schroeder; Writing by Heather Timmons; Editing by Andrea Ricci and Jonathan Oatis)