• January 28, 2023

Opinion: Oh, No, the Labor Market Is Recovering

A man enters a restaurant with a sign reading “Now Hiring” on Thursday March 4th in Salem, NH


Photo:

Elise Amendola / Associated Press

Now we know why the Democrats who run all of Washington are so eager to go through their $ 1.9 trillion spending without negotiating with Republicans. They fear the economy is improving so quickly that Americans may wonder why Congress is having to spend all that money.

That was the story of Friday when the Labor Department reported an encouraging 379,000 net jobs in February. Private payrolls rose by an even more impressive 465,000. Add in net upward revisions of 38,000 over the previous two months, including 117,000 more jobs in January, and the U.S. labor market has shaken off its winter slowdown significantly.

Most of the job growth came from the service industry as pandemic lockdowns ease in most states. Leisure and hospitality created 355,000 new jobs a month as restaurants and bars continued to open. Retailers added another 41,100. The hiring pace is likely to escalate in March as the grand national reopening continues.

Investment advisor Donald Luskin notes that his socially distant index, which tracks data from cell phones, improved significantly after the week of February the Bureau of Labor Statistics took its employment sample.

While too many people are still unemployed, there is a shortage of jobs in many industries. One of them is building when home construction is sizzling. In this context, the additional weekly unemployment payments of $ 300 per week will slow the labor market recovery by giving millions a greater incentive to stay at home.

The February report is good news overall, except in Washington, where the timing is poor. Democrats are throwing themselves under the guise of Covid-19 relief on a bill that is a gigantic expenditure bill.

You need to get it passed soon or the political momentum may weaken as the public learns more about non-Covid-19 welfare and the political issues it encompasses. The $ 350 billion bailout package for states and municipalities that generate tax revenues is likely to be especially embarrassing if politicians were able to feel ashamed.

Democrats also want this goodbye quick, so they can pivot and appreciate the inevitable economic boom that would come this year anyway if the pandemic wears off, even if Congress does nothing. The Atlanta Federal Reserve’s GDPNow estimate for the first quarter just ended is 8.3%. Most private economists forecast rapid growth in the second quarter and beyond. This would be the worst “stimulus” calculation in history, except that it is really an income redistribution and very little stimulus.

All of this explains why President Biden responded to the February news with an urgent need. “Today’s job report shows that we believe the American bailout plan is desperately needed,” he said, noting that “we have a million fewer educators – a million fewer educators – than we had at this time last year.”

Yes sure. When teacher unions and school districts refuse to return to class as so many do, schools naturally employ fewer “educators”. Still, Mr Biden and the Democrats are offering the unions a $ 130 billion payout in their spending bill, even if they don’t return to the classrooms at all for the three months of this school year.

The $ 1.9 trillion spending bill passes as Democrats need to show their stakeholders the money. But nobody should believe that it will be responsible for the 2021 boom.

Potomac Watch: Democrats this week pushed aside concerns about mail-in and absentee ballots to vote for HR1, and gave up their own states’ right to set electoral rules. Image: Lenin Nolly / Zuma Wire

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Published in the print edition on March 6, 2021.

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