Although last May’s job report - released on Friday with great optimism - brought joy to the hearts of most Americans, others did not feel the same way, but Democrats Nancy Pelosi (Speaker of the US House of Representatives) and Chuck Schumer () The Democratic Leader of the Senate was disappointed, ignoring the progress the economy had made and calling for more federal funds to be pumped. What are their biases against good economic news? The American Wall Street Journal asks
The newspaper says in its report that the flexible American economy surprised almost everyone by creating 2.5 million new jobs in the month, while the unemployment rate fell from 14.7% to 13.3% last April, and the number of unemployed decreased by a total of 2.1 million to a total of 21 Two million, a figure still terrible.
The numbers look better given the mid-month job survey, before easing economic restrictions in most parts of the country.
According to the newspaper, the economy has reached its lowest levels, but is now on the way to prosperity, as it will gain more speed this June with the reopening of more countries and the revival of the semi-dead private economy.
Labor market recovery
Hints of the job market boom this week emerged through initial jobless claims for the week that ended on May 23, as the number of applications fell sharply in a number of states, the construction sector rebounded in Florida and tourism began to return.
The newspaper pointed out that the federal salary protection program also succeeded in its main goal, which is to make small companies retain workers, and this program had to succeed due to its cost, which amounted to approximately $ 659 billion.
Congress passed a beneficial reform of the payroll protection program, which allows companies to spend loan funds in a period of up to six months instead of two months on costs other than salaries.
The newspaper says that although tens of thousands of companies will never be reopened, service companies are beginning to re-employ workers, with job gains in retail trade reaching 368,000, in the entertainment and hospitality sector 1.2 million, and in health care 312,000.
The closure hurt the black
Last May's report highlighted how the closure has hurt African Americans and low-skilled workers even more. While the unemployment rate decreased among whites and Hispanics, this rate remained at 16.8% for blacks. The newspaper states that a year ago, the unemployment rate among blacks was 6.2%, recording a record low.
However, the job market started to recover, but Mrs. Pelosi and Mr. Schumer will not admit it. The US House Speaker issued a statement saying that “About 600,000 critical government employees lost their jobs last month, and that hundreds of thousands of lines workers The foreground is at risk of layoffs, including teachers ... basic hospital personnel, nursing care, sanitation, transportation, and the food and postal sector. "
Its solution was to pass the $ 3 trillion law of heroes, at a time when Schumer was equally pessimistic and offered the same solution.
The worst interference
There may be no need to spend more money - the report says - states will not receive significant revenue losses if the economy and the labor market recover faster, and they can borrow from the Federal Reserve, and consumers have increased their savings and have money to spend again while returning to work .
And the extension of Congress in the $ 600 unemployment benefit per week, which gives workers an incentive not to return to work, would be the worst intervention.
In this regard, the Congressional Budget Office said this week that five out of every six workers receive more benefits than they receive as wages, and work will be less later this year if the $ 600 benefit extension is extended until 2021.
According to the newspaper, the biggest challenge will be to regain the spirit of risk and investment, given the uncertainty about the occurrence of a second wave of the Covid 19 virus in the fall and winter, and there will be no need to impose a second closure if the political class prepares better this time by fortifying the health care system. Creating a vaccine for the virus saves the situation, but it's best to prepare as if that wouldn't happen.
The newspaper concluded that the American economy is a dynamic engine that will grow if left to operate with its own devices, so the economy should have a chance to recover before Congress spends another trillion dollars, an amount that the private economy will provide sooner or later.