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The U.S. economy created 266,000 jobs in April, a big failure compared to the rapid spread of U.S. vaccines and fiscal stimulus measures that would generate about 1 million jobs.
The conclusion of the recovery is that the rise in the U.S. boom in coronavirus cases is not as strong as previously thought. Official data released on Friday validate the long-held opinion of the Federal Reserve that the U.S. recovery is far from over and will alleviate some fears of rising inflation and overheating.
But it also casts doubt on the Biden administration’s hopes of improving the economy quickly and the predictions of Treasury Secretary Janet Yellen that the U.S. could return in full. employment for next year.
So what is the culprit for the disappointing data? Here are some compelling explanations.
Volatile numbers
Economic data in a time of great economic change in the labor market, such as the reopening of many activities, can be variable, irregular and non-linear, which can lead to large forecast errors.
In the early rebound of the pandemic last spring, economists greatly underestimated the strength of the recovery, which was clearly overestimated last month. Federal Reserve officials have often said they don’t judge the economy based on one-month data, and that’s even more so pandemic. Most economists reacted to the figures by treating it as a problem – a temporary slowdown in the recovery – in the face of a signal that is already igniting.
The coronavirus has not disappeared
Economists would lead a brighter pace of vaccination in America and the benefits this would bring to the labor market. Although the Biden administration achieved its goal Administering 200m coronavirus shootings last month, and 100 million Americans are now fully embedded. The labor report was collected in the week of April 12, when the right to own was not extended to all Americans. This meant that some unincorporated workers were not yet ready to return to the labor market and that companies were not hiring as quickly as expected, solely for health reasons.
It may create some job shortages
With 8.2 million fewer Americans working than in February 2020, it’s hard for employers to think of a situation where they have trouble finding employees to fill positions.
But a mismatch in labor supply and demand may begin to hinder recovery. After more than a year of the coronary heart disease crisis, some employees may have severed relationships with their former employers, relocated or relocated to a reconfigured family situation that hinders their ability to return to work. In the meantime, some public transport the systems operate on limited hours, reducing the mobility of some employees.
Government support can be very clear
Republican lawmakers and some business groups quickly identified what they preferred to blame for the job creation figure: generous government benefits. The U.S. Treasury is sending $ 1,400 stimulus checks to most American families to ease the pressure on their home economies, but charging $ 300 in weekly unemployment benefits until the beginning of September.
It is critical that these payments reduce the incentive for Americans to look for work. But other labor market data do not support this thesis. For example, the weekly final amounts of initial jobless claims fell in claims for unemployment benefits Below 500,000 for the first time since the early 2020 blockades.
Many parents are still stuck
Employment data have revealed that, as has become common throughout the pandemic, the gender gap in the nature of the recovery is faltering. While men continued to return to the labor force last month, women retreated, that is fewer females they were at work or looking for work compared to March.
This is probably due to the fact that many schools have been partially reopened and there are still no services such as out-of-school care for children. Because women who suffer from excessive weight gain from caring for children, they are hesitant to return to full-time work. They can postpone any move to September, given the uncertainty about the availability and conditions of the camps.
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