Biden defends economic record amid growing stagnation fears

Biden defends economic record amid growing stagnation fears

WASHINGTON — Friday saw the first snag in President Biden’s economic recovery efforts, with only 266,000 jobs — less than a third of what had been expected — gained throughout the course of April.

Monday had Biden arguing in a White House address that there was, in essence, nothing to worry about. Recovering from a global pandemic, he said, was never going to be snag-free.

“We’re moving in the right direction,” Biden said, attempting to downplay concerns — voiced mostly by Republicans — that February’s stimulus package was so generous in its unemployment benefits, it incentivized people to stay home instead of searching for work.

[See also: One crucial thing to remember after April’s jobs report flop]

That criticism is not new, and was voiced when then-President Donald Trump passed the first coronavirus relief bill. But that was a year ago, and concerns about how long such measures must persist are growing, especially since the danger of the coronavirus appears to be diminishing across the country. About 115 million Americans are fully vaccinated, which should allow the service sector to rehire for positions that were cut during months of lockdowns and measured reopenings.

Biden defends economic record amid growing stagnation fears

President Biden speaking at the White House on Monday. (Chris Kleponis/CNP/Bloomberg via Getty Images)

“Anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said at one point.

That reminder to those currently receiving unemployment benefits seemed intended as a defense against the kinds of criticisms about profligate government spending that Democrats have endured since Biden was a junior senator from Delaware in the 1970s. Those criticisms came not only from conservatives like Ronald Reagan but also from Bill Clinton, a limited-government Democrat who enacted welfare reform in 1996.

Now, as president, Biden is intent on overseeing the largest expansion of the federal government in a half century. But if the unemployment rate remains stubbornly high, he may have to expend increasing energy defending — as he did on Monday — an economic recovery predicated largely on sustained federal aid. Republican governors in Montana and South Carolina have already said they will stop taking funds from Washington for additional unemployment benefits, in an effort to prod people to return in earnest to the labor market.

“What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement,” Henry McMaster, the governor of South Carolina, said in announcing that pandemic-related unemployment benefits would end on June 30.

The unemployment rate is currently 6.1 percent; it was 6.3 percent about a week after Biden took office. “These monthly reports are a snapshot, as you all know,” the president said on Monday. He argued that April’s “snapshot” had been taken before the pandemic situation improved drastically in the second half of the month.

People line up outside a newly reopened career center

People line up at a newly reopened career center in Louisville, Ky. (Amira Karaoud/Reuters)

“Americans want to work,” he said, adding that “our economy can’t achieve its full potential until we get more people vaccinated.” Biden has previously urged employers to give employees time off to get vaccinated (for which the federal government will reimburse small and midsize businesses) and to provide incentives like discounts for workers who get the vaccine.

At the same time, Biden is obviously aware that narratives change quickly in Washington. Even as some have touted his domestic programs (which would total about $6 trillion if fully realized), others have warned that they could lead to inflation or, even worse, a combination of monetary inflation and economic recession known as stagflation.

Economists are especially worried about the rising price of commodities like lumber. “The new picture that is emerging is the worst-case scenario of faltering jobs growth and rising inflation,” wrote economist Barbara Rockefeller in analyzing last week’s job report in the context of the worsening commodity shortage worldwide. But, she added, “one lousy data point does not a trend make. For all we know, next month’s payrolls will be over a million as was expected this time.”


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