The U.S. Department of Labor released its April employment report, adding less than 300,000 jobs, well below previous expectations. Analysis suggests that the unemployment benefits provided by the Biden administration are the main reason for the decrease in employment.
The U.S. Department of Labor released its latest employment report Friday, showing that U.S. employment cooled rapidly in April, with nonfarm payrolls increasing by only 266,000, far below the market estimate of 1 million, and sharply lower than the 770,000 people added in March. At the same time, the unemployment rate rose to 6.1% in April, also higher than the expected 5.8%. The new employment data was a big disappointment to the market.
U.S. labor market analyst Nick Bunker: “To be honest, in terms of expectations, today’s report is perhaps one of the most disappointing reports ever.”
In the face of sluggish employment figures, President Joe Biden held a press conference at noon on Friday to defend his “bailout plan”.
President Biden: “We never thought that in just 50 or 60 days, everything would be better. Today, there’s more evidence that our economy is on the right track. But clearly, we have a long way to go.”
The U.S. economy is gradually strengthening amid the gradual liberalization of embargo measures and financial help from the White House, yet employers are generally responding to the difficulty of hiring enough people.
Economists pointed out that employment cooled in April, mainly because the Biden administration’s “relief plan” provided generous unemployment benefits, reducing the willingness of people to find jobs.
A recent Bank of America analysis shows that Americans earning less than $32,000 a year before the epidemic are now getting more money through welfare benefits than they would if they went back to work.
Xie Tian, a professor of economics at the University of South Carolina, said, “When you’re normally unemployed, the government gives you unemployment benefits every week and asks you how your job search is going. Unemployment benefits are paid so you can get by, but they don’t make you very comfortable. You if the benefits federal and state government add up, it’s about the same as your usual job, or even slightly less, it discourages people from going out to work.”
Faced with labor shortages, some U.S. states have begun to take action to encourage people to return to work. South Carolina Gov. Henry McMaster (R) announced Thursday that he is halting the payment of federal benefits to residents in addition to state benefits. Beginning June 30, South Carolina residents will lose $300 a week in federal unemployment benefits. Montana has announced a similar plan.
Xie Tian, professor of economics at the University of South Carolina: “This initiative certainly won’t be popular with a lot of people, but I think it’s necessary. Let people go out and actively work hard to get a job instead of staying home and waiting for welfare.”
The U.S. employment report for April also revealed some optimistic signals. The leisure and hospitality industry (leisure and hospitality industry) became the industry that added the most jobs, showing that restaurants and hotels, which were hit hardest by the epidemic, are starting to show signs of a rapid recovery.
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