General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe lagging economy shows that we need to invest more, not less, in the Build Back Better agenda.
Last edited Fri Oct 8, 2021, 02:37 PM - Edit history (2)
The pandemic and the recent delta variant surge have impacted September's job report numbers.
https://www.cnn.com/2021/10/08/economy/september-jobs-report/index.html
This follows on the heels of August's job report that showed similar lower than expected economic growth.
Clearly, this lagging economy shows that we, as Democrats, need to invest more, not less, in President Biden's Build Back Better agenda to maintain the economic recovery and show voters that our Democratic policies are working to improve their lives.
Efforts to reduce the total amount invested in the infrastructure bill and the reconciliation bill will slow economic recovery, hurt working families, and damage Democratic prospects in the 2022 midterms.
Indeed.
Hugh_Lebowski
(33,643 posts)E'erone knows that!
Johnny2X2X
(18,745 posts)The economy has added more jobs this year than any other year on record. It's growing at close to 7% annually too.
Biden inherited a disaster, Trump drove the economy into the ground with the worst jobs record since Herbert Hoover and the worst year for growth since 1947.
The economy is cooking right now, but I do agree that more spending is needed to keep its momentum up.
bluewater
(5,376 posts)Last edited Fri Oct 8, 2021, 02:11 PM - Edit history (2)
Here's what the Brookings Institute says on the matter:
Those sector dynamics disproportionately hurt women, non-white workers, lower-wage earners, and those with less education (Stevenson 2020). Because workers among those groups were more likely to be employed in the services sector, and in particular in the leisure and hospitality sector, they experienced job losses at much higher rates. For example, the gap in the rates of unemployment between Black and white men jumped from 3 percentage points to 6 percentage points during the initial downturn. By July, that gap had partially fallen back and was 4 percentage points.
The uneven recovery is also evident when we focus on consumer spending at retail establishments. Between February and April 2020, overall retail sales sank 22 percent before quickly recovering to their pre-pandemic level just a few months later. As people began social distancing, spending shifted to at-home consumption, benefiting businesses like online retailers, grocery stores, and suppliers of building and garden materials. Indeed, spending on total retail sales has averaged 16 percent higher than its pre-pandemic level so far this year. At the same time, some categories of retail sales were severely depressed until showing signs of recovery in March of this year; those include in-person dining and spending on clothes, electronics, and appliances.
Overall, the pandemic continues to weigh on aggregate demand for goods and services. In addition, bottlenecks and supply shortages have created challenges for businesses to meet consumer demand for some products, particularly as consumer demand has shifted wildly. Also, the pace of hiring has not kept up with the pace of labor demand, as job matching has been held back by a number of factors described below.
Figure 2 shows the percent difference in overall employment from the peak month prior to recent economic downturns through the month where employment recovered to its previous business cycle peak. Across the labor market, employment is still down 5.3 million from February 2020 and down about 9 million from where trends in employment were headed to prior to the pandemic.
From February to April of 2020, employment declines in the leisure and hospitality sector accounted for about 40 percent of the total 22 million jobs that were lost. Conversely, a partial recovery in that sector has fueled employment growth since then. Overall, from February through July of this year, monthly employment rose by more than 700,000 on average. In August that pace slowed significantly, however. The resurgence of the pandemic likely held back the recovery in the leisure and hospitality sector, which saw no net gain in employment in August. In that sector, employment is still down 1.7 million jobs from February 2020.
Over the summer of 2021 in some states, and in the first week of September 2021 in the remainder of states, enhanced UI expired. That set of policies had significantly expanded eligibility to workers not covered by regular UI (Pandemic Unemployment Assistance [PUA]), extended the number of weeks that a worker could receive UI (Pandemic Emergency Unemployment Compensation [PEUC]), and increased the generosity of benefits (Federal Pandemic Unemployment Compensation [FPUC]). Prior to the CARES Act, which created PUA, PEUC, and FPUC, only 30 percent of workers were eligible for unemployment compensation.
Figure 3 shows the total number of unemployed workers superimposed over weekly continued UI claims for regular UI benefits and Extended Benefits, which automatically extends weeks of eligibility based on a states economic conditions, as well as claims for emergency programs: PUA and PEUC.
Note that the level of unemployment greatly underestimates the number of people who lost jobs during the pandemic. To be described as officially unemployed, a person must be actively looking for work; however, millions of people effectively have left the labor force since March 2020 but were eligible for the expanded UI benefits. At the time that the emergency programs expired, there was a gap of more than 5.5 million workers who were in the labor market and unemployed, but not receiving UI. We project that gap to close only modestly through the end of this year.
https://www.brookings.edu/research/11-facts-on-the-economic-recovery-from-the-covid-19-pandemic/
Also, note that when you pointed out this:
it failed to mention that this "record" was due to climbing out of the huge crater created by the layoffs during the pandemic. As the economy recovered and approached/reached (depending on the economist) pre-pandemic levels, economic recovery has been uneven, as demonstrated by the latest job numbers being lower than expected both in August and September.
The Jobs reports were also lower than expected in April and May.
In fairness, the June and July numbers exceeded expectations, but were followed by disappointing August and September numbers, demonstrating the uneven nature of the recovery.
https://www.cnbc.com/2021/05/07/weak-jobs-report-shows-the-need-for-massive-jobs-and-families-bills-biden-says.html
https://www.cuinsight.com/may-jobs-report-lower-than-expected.html
Another important thing to note, the recovery has been fueled by governmental stimulus money, and now that's going away:
People will be surprised at how much the economy decelerates over the next year as the stimulus boost fades, said Jim OSullivan, the chief U.S. macrostrategist for TD Securities.
All the more reason to invest more in president Biden's Build Back Better agenda now.
bluewater
(5,376 posts)By Julia Wolfe and Amelia Thomson-DeVeaux
UPDATED OCT. 8, 2021, AT 9:00 AM
For nearly a year, the economy has been on a long, exhausting slog toward post-pandemic normalcy. And it isnt over yet.
This page which we plan to update every month will tell us how far we still have to go before the economy is back where it was before the pandemic shut down much of American life.
We have made significant progress, of course: After hitting the highest level of unemployment the country has seen since the Great Depression in April 2020, the unemployment rate has steadily fallen.
But as of this month, the unemployment rate is still 1.3 percentage points higher than it was pre-pandemic.
https://projects.fivethirtyeight.com/us-economy-coronavirus/
More information on the lagging economy with some good charts.
Johnny2X2X
(18,745 posts)Trump tanked the economy with his inept response to Covid, it was a disaster, it was always going to be a multi year deal to get back. It's amazing we're growing this fast right now, any President would be talking non stop about how great the recovery is going.
bluewater
(5,376 posts)Since government stimulus has been shown to work to help the economic recovery.
President Biden's 3.5T Build Back Better agenda needs to be supported more, not watered down and cut, in the upcoming reconciliation bill.