Analysis: Hiring slowdown menaces Biden despite upbeat talk

President Joe Biden promised an economy that could be firing on all cylinders next year

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President Joe Biden promised an economy that could be firing on all cylinders next year, but Friday's disappointing jobs report suggests a slowdown in growth could instead loom atop voters' minds in the 2022 elections.

Republicans quickly seized on the modest gains of 194,000 jobs in September as evidence that Biden's $1.9 trillion coronavirus relief package, enacted more than six months ago, has failed to deliver as promised.

Biden instead chose to highlight a drop in the unemployment rate to 4.8% as proof of “real economic progress” — even if it wasn't the boom he was touting months ago. And Democrats further offered the latest jobs report as a reason to pass their proposed multitrillion-dollar tax and spending program to help with infrastructure, school, child care, family leave and health care, saying it is needed to improve prospects for continued growth.

Biden, taking note of the rancorous debate over his spending plan in Washington pleaded for patience after the jobs report came out.

“Turn on the news and every conversation is a confrontation. Every disagreement is a crisis,” he said. “But when you take a step back and look at what’s happening, we’re actually making real progress.

“Maybe, it doesn't seem fast enough,” he allowed. “I'd like to see it faster and we're gonna make it faster.”

The jobs report revealed an economy still trying to heal from the coronavirus pandemic, but views of the pace and robustness of that recovery can easily fall prey to political spin. The U.S. economy is large and diverse enough that it can send conflicting signals.

Republicans can correctly assert that Biden is now unlikely to deliver on the 7 million new jobs he touted earlier this year. Democrats can simultaneously highlight what appears to be the strongest economic growth in decades.

Rep. Kevin Brady, R-Texas, was happy to offer a reminder that Biden repeatedly cited a report by Moody's Analytics that his relief package would create 7.2 million jobs, a total now unlikely.

The Republican said the infusion of government aid actually has discouraged Americans from seeking jobs and Biden's proposed corporate tax increases are now spooking employers.

“Frankly, the president’s leadership is to blame here,” Brady said. “I think one of the reasons economic optimism is down across the board significantly, not just with families but with businesses as well, is because they see these impending tax hikes. They know they’ll be crippling.”

But House Speaker Nancy Pelosi saw the jobs report as “additional proof” of a need for the programs those taxes would support.

“While historic progress to create jobs, lower unemployment and defeat the pandemic has been forged under President Biden and Congressional Democrats, more must be done,” she said.

Whatever the political spin, inflation running above 5% and job growth slowing will put Democrats on the defensive.

Glen Bolger, a Republican strategist and co-founder of Public Opinion Strategies, noted that independent voters tend to put a greater priority on the economy and their support will be decisive in the 2022 elections.

The latest jobs report is “not going to inspire confidence in either the Biden administration’s policies or the direction the country’s going economically,” he said.

But Bolger cautioned that what will really matter is the health of the economy a year from now, when voters begin to cast ballots. That is unknown, and the jobs report contained reasons for optimism — with rising wages and hours worked.

Total job gains were down in part because of seasonal adjustments that showed local school districts shed 144,200 jobs, a temporary setback that will likely disappear in future employment data.

Douglas Holtz-Eakin, president of the center-right American Action Forum, said the report indicates strong demand for labor and that would be a positive for growth. The slippage in hiring likely reflected the continued risk from the coronavirus' delta variant and that means the report will likely have no impact on Biden's efforts to get his economic and social agenda through Congress.

“I think the politics stay about the same,” he said. “The substance of the economy is in pretty good shape.”

The Moody's Analytics jobs estimate that Biden relied on came with a critical caveat. It assumed that the coronavirus would be under control by July 4. But that wasn't the case. The spread of the delta variant and the reluctance of many Americans to get vaccinated enabled COVID-19 to continue to weigh on the economy.

Yet Biden continues to rely on the Moody's estimates when stumping for his social spending package, saying the increased child tax credit, shift to electric vehicles, investments in passenger rail and establishment of universal pre-kindergarten programs and other initiatives would all lift up economic capacity.

The slowdown in hiring does not mean that Republicans have a better grip on how to achieve growth. One of their key talking points was undermined by the September jobs report. They told voters that the expiration of enhanced unemployment benefits that month would create a rush to employment, but Friday’s figures indicate that the exact opposite happened.

The labor force participation rate — which measures the percentage of people who have jobs or are seeking work — ticked down in September to 61.6%. That rate was 63.3% before the pandemic and to achieve that level now another 4.3 million people would need to join the U.S. labor force.

One thing that seems clear is the unique nature of an economy that is still muddling through a pandemic. It has experienced unprecedented layoffs, historic levels of government aid, bursts of job growth, cooling off periods as the virus reasserted itself and the uncertainty caused by workers and employers adjusting to these conditions.

More of the economic analysis needs to start by focusing on the relationship between public health and economic growth, said Lily Roberts, managing director of economic policy at the liberal Center for American Progress.

“We need to adjust our understanding of how this recovery is going to unfold,” Roberts said. “But we can’t just expect it to play out naturally.”

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EDITOR'S NOTE — Josh Boak covers the White House and has covered the economy for The AP since 2013.