Business

Joe Biden vows to ‘act fast’ on US stimulus amid weak January hiring

Read more at www.livemint.com

The closely-watched jobs data showed the unemployment rate dropped to 6.3 percent in January but the economy added only 49,000 jobs, the Labor Department said Friday.

Also Read | Vaccination drive picks up slowly

The anemic report made plain the ongoing struggles as Americans cope with the largest Covid-19 outbreak in the world.

“I believe the American people are looking right now to their government for help,” Biden said after a meeting with top Democratic lawmakers. “So I’m going to act, I’m going to act fast.”

Democratic House Speaker Nancy Pelosi said she would push for rapid approval of the package.

“Hopefully in a two week period of time we’ll send something over to the Senate,” she told reporters after the White House meeting.

Democrats in the wee hours of Friday won a procedural vote in the Senate, setting the stage for passage of the president’s relief bill, which includes a host of measures aimed at boosting the recovery including aid to small businesses and the unemployed, and funds to speed up vaccine distribution to contain the pandemic.

But in a sign of just how narrow a path to approval, Vice President Kamala Harris cast the tie-breaking vote to overcome the objections of Republicans, who have said balked at the high price tag.

Biden has shrugged off the criticism.

“The way I see it, the biggest risk is not going too big,” Biden said.

Analysts warn the monthly employment report indicates the economic recovery remains tied to the intensity of the Covid-19 pandemic.

“Hiring will pick up as restrictions are relaxed but gains will be stronger once the economy can fully reopen,” Rubeela Farooqi of High-Frequency Economics said. “Until then, generous fiscal support will provide a safety net for households and businesses.”

– Distress signals –

The United States last year endured its worst economic contraction since 1946, and the recovery has been uneven, with some sectors like housing bouncing back faster while other areas, such as travel and entertainment, are still suffering.

Unemployment in the world’s largest economy was at historically low rates before the pandemic struck, when massive business closures drove the jobless rate up to 14.7 percent.

It has declined in the months since, as some activity resumed, but at a progressively slower pace, and hiring in December fell.

There were warning signs for the economy throughout the latest data which showed the workforce is 6.5 percent — 9.9 million positions — smaller than it was in February before the pandemic struck.

At 61.4 percent, the labor force participation rate in January was at a level not seen since the 1970s, and Gregory Daco of Oxford Economics said adjustments meant to account for holiday related employment trends made the data appear better than it is.

“While favorable seasonal factors helped lift the monthly jobs count, the January gain nonetheless represented little progress toward recovery,” he said.

– Uneven recovery –

The number of people who are long-term unemployed rose to just over four million, or 39.5 percent of all jobless workers, which William Spriggs, chief economist of the AFL-CIO trade union federation, warned was a sign of a persistent employment crisis.

“These show it will be very hard to get the unemployment number down. We need help now to slow that growth,” he tweeted.

Job growth was strongest in the business services and private and public education sectors, but continued layoffs in industries like retail trade, health care and especially the hard-hit leisure and hospitality sector undercut the gains.

The pain was not spread evenly across the country, with adult men and women, as well as whites and Hispanics, seeing their unemployment rates decline, while for Black Americans the rate fell but to a still-high 9.2 percent.

“The labour market was frozen at the start of the year, and is completely dependent on the pace of reopening,” Ian Shepherdson of Pantheon Macroeconomics said.

This story has been published from a wire agency feed without modifications to the text.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Read more at www.livemint.com

Show More

Related Articles

Back to top button