“Doomsday economists had predicted a loss of 8.5 million jobs in May, but the economy roared back and added 2.5 million jobs instead, thanks to President Trump's leadership and the solid foundation his policies have laid,” a statement from campaign manager Brad Parscale said.
Huh? As Krugman goes on to explain, the seemingly encouraging job report could actually “reinforce the White House inclination to do nothing and let emergency aid expire.”
That's alarming to Krugman and other analysts because what May's job numbers do seem to prove is that the Payroll Protection Program, which encouraged small businesses to keep workers on payroll during the pandemic, was instrumental in helping bring back workers in May. “U.S. unemployment [is] at 13 percent [with] trillions in government aids,” wrote The Washington Post‘s Jeffrey Stein. “What happens when huge infusion runs dry in July?”
But as of Thursday night, the Post was reporting that President Trump's recovery plan “largely amounts to optimism that as pandemic restrictions are loosened, the nation's economy will turn the lights back on by itself.” As the Post goes on to explain, Trump is hesitant to offer states further aid, and opposes extending the soon-to-expire $600 unemployment bonus for laid-off workers.
White House economic adviser Stephen Moore seemed to confirm Krugman's fears. “There's no reason to have a major spending bill,” he said in response to Friday's job numbers. “The sense of urgent crisis is very greatly dissipated by the report.”
Not everyone shares the opinion that the job report lets the federal government off the hook. “The jobless rate, even if it declines, I believe is going to stay extremely high through the end of the year,” former Federal Reserve chair Janet Yellen told the Post. “It's absolutely essential to have another package that will extend unemployment benefits beyond the summer. That's going to be tremendously needed.” Jeva Lange
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