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‘The sun is coming out in America’: Biden invokes Ronald Reagan after US beat expectations by adding 850,000 jobs in June in report that sent the S&P to a record high
- The Labor Department released their June jobs report on Friday
- The increase in Americans on nonfarm payrolls beat expectations of 706,000
- But the unemployment rate was expected to fall to 5.7%
- Hiring has accelerated as the country returns to normal and more are vaccinated
- But there are still concerns of labor shortages across the country
- There are a record 9.3 million job openings
- Biden hailed the gains in remarks at the White House – but bristled when he got questions about the situation in Afghanistan
- The Dow made gains and was in record territory on the news
President Joe Biden on Friday touted a new economic report showing the U.S. added 850,000 jobs in June – heralding the jobs gains and calling for ‘critical’ investments in infrastructure, only to swat down reporters who tried to ask him about his Afghanistan draw-down.
‘More jobs, better wages. That’s a good combination,’ Biden said.
He pointed to forecasts of rapid growth, and post-pandemic gains as markets hit record territory.
‘Our economy is on the move, and we have COVID-19 on the run,’ Biden said in remarks at the White House Friday, where his up-beat pronouncements soon led to tense exchanges with reports who asked him about the U.S. troop withdrawal and signs of instability in Kabul.
‘We’re on track and we’re on the right track. Our plan is working, and we’re not going to let up now,’ said Biden, as he talked up job gains in hospitality, restaurants, bars, and amusements parks – and tried to keep the focus on July 4th barbecues and ball games.
He also quoted Republican lode star Ronald Reagan and his ‘Morning in America’ theme by pointing to economic growth figures he said weren’t seen since 1984.
‘The last time the economy grew at this rate was in 1984, and Ronald Reagan was telling us it’s morning in America. Well, it’s getting close to afternoon here, and the sun is coming out,’ Biden said.
The US added 850,000 jobs in June but unemployment rose from 5.8 percent to 5.9 percent, the Labor Department revealed Friday. Joe and Jill Biden are pictured arriving at the White House after their trip to the collapsed Miami condo on Thursday
When a reporter asked Biden after his remarks about the U.S. leaving Bagram Air Force Base in Kabul, Biden said: ‘I want to talk about happy things, man.’
The S&P 500 index of Blue Chip companies was on track to hit a record for the seventh-consecutive trading session on the news.
Even in a report filled with bright spots, unemployment rose from 5.8 percent to 5.9 percent, the Labor Department revealed Friday.
The increase in Americans on nonfarm payrolls beat expectations of a rise of 706,000, but the unemployment rate was expected to fall to 5.7 percent.
Biden used the occasion to promote his enacted $1.9 trillion American Rescue Plan, while pushing his other big investments in the legislative pipeline.
‘At the time people questioned whether we should do that even though we didn’t have bipartisan support. Well, it worked,’ he said – in a line amid negotiations about how much to push through on a likely partisan ‘reconciliation’ vote.
There are concerns about rising inflation amid fast growth projections, but Biden highlighted another aspect of the job market: pressure leading to rising wages.
The U.S. added 850,000 jobs in June, according to the latest government statistics
The unemployment rate ticked up to 5.9 per cent, with 9.5 million unemployed, even as jobless claims drop during the recovery
‘Employers are competing with each other to attract workers,’ he said, bringing higher wages. ‘It also gives them the power to be treated with dignity and respect in the workplace.’
Biden also credited the vaccine rollout as bringing back the economy. Average infections are substantially down, although there remain outbreaks of concern with variants on the rise and vaccination dramatically lower in some rural areas.
‘I want to thank everyone, wish you all a. happy Fourth of July. We’re going to be able to go to ball games, you’ll be able to sit in stadiums, you’re going to be able to be with your families in backyard barbecues as we hoped. And we’re going to make more progress.’
Hiring has been accelerated as the country returns to normal and more people get vaccinated, but there are still concerns of labor shortages across the country.
Politicians, businesses and some economists have blamed enhanced unemployment benefits, including a $300 weekly check from the government, for the labor crunch.
Lack of affordable child care and fears of contracting COVID have also been blamed for keeping workers, mostly women, at home.
The jobless rate has been understated by people misclassifying themselves as being ’employed but absent from work.’
The labor force participation rate was unchanged at 61.6 per cent.
Markets rose in early trading following the news, and President Joe Biden was scheduled to speak on the new data Friday morning.
There are a record 9.3 million job openings. Economists polled by Reuters had forecast payrolls advancing by 700,000 jobs last month and the unemployment rate dipping to 5.7 percent.
Average hourly earnings rose 0.3% last month after increasing 0.4% in May. That raised the year-on-year increase in wages to 3.6% from 1.9% in May. Annual wage growth was in part flattened by so-called base effects following a big drop last June.
The report suggested the economy closed the second quarter with strong growth momentum, following a reopening made possible by vaccinations against COVID-19. More than 150 million people are fully immunized, leading to pandemic-related restrictions on businesses and mask mandates being lifted.
Some economists are now projecting economic growth will extend as high as 10 per cent in the second quarter, a figure well above historical norms for the U.S. economy.
But as in prior monthly reports, there are data points that are cause for concern even as the economy rebounds.
Markets rose on the news Friday in record territory
The number of long-term unemployed ticked up to 4 million in June, an increase of 233,000, a figure about 3 million higher than it was in February 2020 before the pandemic hit. That followed a decline of 431,000 in May.
Manufacturing jobs are still down nearly 500,000 from pre-pandemic levels.
Some of the biggest gains have been in the hospitality industry hard-hit by the pandemic.
It gained 340,000 jobs amid an industry hiring spree boosted by vaccinations, reopenings, and the resumption of travel. The figure includes 194,000 job gains in bars and restaurants – even as the overall employment in the sector lagged pre-pandemic levels by more than 2 million jobs.
There have also been pandemic-related retirements as well as career changes. Economists generally expect the labor supply squeeze to ease in the fall as schools reopen and the government-funded unemployment benefits lapse but caution many unemployed will probably never return to work.
Record-high stock prices and surging home values have also encouraged early retirements.
According to job search engine Indeed, 4.1 percent of jobs postings advertised hiring incentives through the seven days ending June 18, more than double the 1.8 percent share in the week ending July 1, 2020.
The incentives, which included signing bonuses, retention bonuses or one-time cash payments on being hired, ranged from as low as $100 to as high as $30,000 in the month ended June 18.
Some restaurant jobs are paying as much as $27 per hour plus tips, according to postings on Poachedjobs.com, a national job board for the restaurant/hospitality industry.
The federal minimum wage is $7.25 per hour, but is higher in some states.
With employment not expected to return to its pre-pandemic level until sometime in 2022, rising wages are unlikely to worry Federal Reserve officials even as inflation is heating up because of supply constraints. Fed Chair Jerome Powell has repeatedly stated he expects high inflation will be transitory.
The U.S. central bank last month opened talks on how to end its crisis-era massive bond-buying.
There are continuing racial differences, with black unemployment at 9.2 per cent, compared to 5.2 per cent among whites. Asian unemployment was 5.8 per cent, while it was at 7.4 per cent for Hispanics.
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