September 23, 2023

WASHINGTON – President Joe Biden responded to the May job report on Friday, saying the steady growth in jobs and falling unemployment are evidence that his economic plan is working.

“Neither of these successes is an accident,” said Biden, who spoke in Rehoboth Beach, Delaware. “It is not luck. It is not least thanks to the cooperation of the American people” who wore masks and had themselves vaccinated against Covid-19.

“And that is not least due to the courageous measures we have taken with the American rescue plan,” said Biden, referring to the massive Covid relief bill that the Democrats passed in March.

“This is progress that is taking our economy out of the worst crisis in 100 years,” said Biden.

Non-farm workers created a solid 559,000 jobs in May, the Ministry of Labor reported. But the number fell short of the 671,000 jobs that economists polled by Dow Jones had expected.

The unemployment rate fell from 6.1% to 5.8%, which is better than the estimate of 5.9%. An alternative measure of unemployment, which includes discouraged workers and part-time workers for economic reasons, also fell to 10.2%.

“Covid cases have decreased. Covid deaths have decreased. Jobless claims have decreased. Hunger has decreased and vaccinations have increased,” Biden said. “Jobs have increased. Wages have increased. Production has increased. Growth has increased. The people who get health insurance have increased. Small business confidence has increased. America is finally on the move again.”

Despite the gains, the US is still about 7.4 million jobs behind pre-pandemic times.

Although they are called “May Job Numbers,” the actual number is calculated on the second week of the month based on that week’s data. This is particularly relevant to understanding May’s numbers related to the pandemic recovery.

Biden found that in the three weeks since the employment figures were calculated in May, more than 21 million working-age adults have been fully vaccinated and are now more likely to return to work, spend on recreational and consumer goods, and plan summer trips.

Another milestone that was not fully captured by May digit numbers is the impact of the CDC’s May 13 announcement that fully vaccinated adults will no longer need to wear masks outdoors in crowds or in most indoor spaces.

The announcement had a knock-on effect on state-level mask mandates and helped pull Americans back into office buildings, health care providers, and other activities they’d avoided over the past year.

As Biden prepared for a meeting with the G-7 in England next week, he noted that “no other major economy in the world is growing as fast as ours. No other large economy is gaining jobs as quickly as ours. “

U.S. President Joe Biden gives a speech at the Rehoboth Beach Convention Center in Rehoboth Beach, Delaware, United States, on Jan.

Kevin Lemarque | Reuters

A notable part of the report was an acceleration in wage increases, which rose 2% y / y after rising just 0.4% in April.

Economists had largely dismissed average hourly wages for much of the post-pandemic period, noting that the majority of new hires were in higher-income positions, making wages look like they were going up for everyone but leaving many low-wage workers out of profits.

With more hospitality workers returning in May, the numbers are now more relevant, pointing to rising wage pressures across the economy, not just for high earners.

Some economists fear that rising wages could lead to further inflation, and they blame the increase in unemployment benefits for a “labor shortage” that forced giant corporations like Bank of America and McDonald’s to raise their minimum hourly wages.

Biden rejects this view of the economy. “When it comes to the economy we are building, rising wages are not a mistake, but a feature,” he said in a speech in Ohio last week.

In the same speech, Biden renewed his call for Congress to raise the federal minimum wage to $ 15 an hour.

The May job report is the first full measurement of the labor market since the shock in April numbers, which fell far short of what economists originally expected.

– CNBC’s Jeff Cox contributed to this report.