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Friday's jobs report indicates the U.S. economy is making a strong comeback. Wages are up and the unemployment rate is down -- at its lowest level since the pandemic began last year. But concerns remain over the highly contagious delta variant and how it could impact the economy's recovery. Jared Bernstein, a member of President Biden's Economic Council of Advisers, joins Judy Woodruff to discuss.
As we reported, today's jobs report indicates that the U.S. economy is continuing to make a strong comeback. Wages are up, and the unemployment rate is down, now at its lowest level since the pandemic began in March of last year.
But concerns remain about the highly contagious Delta variant and how it could affect the economy's recovery.
Jared Bernstein is a member of President Biden's Council of Economic advisers, and he joins us now.
Jared Bernstein, welcome back to the "NewsHour."
So, some good news to report today. Tell us, as you look at these numbers, what gives you confidence about this employment picture, and what do you see in there that concerns you?
Well, I think the — one of the main confidence-building factors here is not just what I saw in this report.
It's what I have seen in the last few reports; 943,000 jobs in July, of course, that's a big, important number, but, in fact, that's part of a trend. We never try to overemphasize one month, because you get variation in these kinds of what we call high-frequency data.
If you look at over the past three months, we have been adding over 800,000 jobs per month. Now, I know you have been tracking these job reports for a long time on the "NewsHour." And you know that those are big numbers.
Since the president got here, we have added four million jobs. That's historically unprecedented. The unemployment rate fell by half-a-point, and, as you mentioned, the wage story.
So, what we know is that Americans are coming back into work, the labor supply is up over a million since January. They're getting jobs. They're seeing wage gains. Shots and arms and checks in pockets are helping this economy get back to where the president wants to see it go.
And I also was asking you about what gives you concern.
As we know that, there were something like 6.8 million jobs that were lost at the start of the pandemic that still have not come back.
A lot of these low-wage positions, positions in the service sector, restaurant jobs.
Do you worry that, because of the way life is changing in this country, that many of those jobs may never come back?
Well, I'm paid to worry. And I earn my paycheck. So, yes, I worry about that and many other things.
I would say one thing about the report that we're looking at month to month is precisely this hole that you mentioned, which greeted us when we got here. That was about 10 million jobs missing relative to pre-pandemic levels. Now, that's 6.7 million.
So, we still have considerable room to make up. And that's one of the reasons, by the way, that the Rescue Plan continues to be important, providing aid to schools that need to reopen, providing housing assistance, particularly to people facing stressors in the rental markets.
And then moving on to the investment agenda through the Building Back Better and infrastructure programs.
Let me also, of course, ask you about COVID, the Delta variant.
These numbers were calculated, as we understand it, in the middle of the month of July. Since then, we have seen this surge in COVID infection, the Delta variant. How worried are you, Jared Bernstein, that that's going to create a real problem going forward?
It is, of course, a concern, and one we're tracking carefully.
But let me give you three contextual points that I think are really important to think about in this context. First of all, we have already talked about one of them. That's economic momentum. When you have a labor market adding over 800,000 jobs per month, when you have cut the unemployment claims by half in almost six months, a trend that typically takes more than a year to occur, when your GDP is back above its trend at least a year before forecasters expected that, you have got real momentum.
Two, vaccinations. When this president came into office, 1 percent, 1, percent, Judy, of adults were vaccinated. Now that number is 60 percent. Obviously, that's critically important to get that number up, but it's one of the reasons why we're not going back to lockdown, we're not going back to March 2020, or even January 2021.
And, three — and maybe this is the most important in terms of forward-looking — we have the public health scaffolding in place to meet this Delta challenge. Now, people are going to have to chip in. They're going to have to make sure that they get vaccinated. We are going to have to work carefully with state and local policy-makers to make sure both relief dollars get out, particularly to people in the rental sector, but also to make sure that we keep getting those shots in arms.
But we have that public health policy infrastructure in place. And that should give Americans a lot of confidence that these trends that we're seeing should persist.
Two other things to ask about, but, before I do, I just want to be sure.
If there are new restrictions that have to be imposed on people's lives because of this Delta variant or another variant afterwards, you're not concerned that that could put a crimp in the economy?
Well, I have tried to communicate that I'm concerned about all dimensions of things that could possibly push back against the recovery.
But, based on the momentum that we have had, 60 percent of adults vaccinated, and the scaffolding we have in place, I think we can meet these challenges, Judy.
Two other quick things, Jared Bernstein.
One is the administration announcement this afternoon that it's extending the moratorium on federal student loan repayments until January. A lot of Democrats are saying, you ought to just let it go permanently. Why not do that?
Well, that's a policy decision that's going to continue to be mulled over and one that we're going to look at carefully.
I mean, basically, you have got a lot of different people, a lot of different stakeholders in this. There are lenders. There are borrowers. There are people who are facing these loans who have very high earnings prospects and don't necessarily need a loan cancellation.
And then you have people for whom carrying student loans — and many of those are members of our minority communities — are really a serious barrier to their getting ahead. So, trust me, this is something that the president himself is looking at carefully and will continue to do.
Last thing, Jared Bernstein.
As you know, there are also the naysayers out there who are worried about inflation. They're saying, with all this money sloshing around in the economy, pent-up savings that people are starting to spend, all the money the administration is putting out there, that what the real worry is right now is overheating this economy, and prices spiking up.
In just a few words, what do you think?
Well, if we look at the labor market today, we have started to see one of the key supply constraints begin to ease.
And that is the key answer to your question. What we need to see is, where there are supply constraints in this economy, they have been related to the pandemic. They have been related to taking a $21 trillion economy, shutting it off, and then turning it on again, strong demand meeting some of this constrained supply.
But we're seeing some of those constraints ease. We're seeing that a little bit in lumber. We're seeing that a little bit in the labor supply today. We have seen a little bit of that in semiconductors. I'd like to see a lot more there. So that helps the auto sector.
But that's the way to think about this. Pandemic-related sectors, that's where you have these transitory or temporary pressures. And as those supply chains come back to life, those pressures will ease.
Jared Bernstein, who is part of the president's Council of Economic Advisers, thank you.
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