Republicans in Congress and a prominent adviser to President Donald Trump wasted no time seizing upon the relatively positive May jobs report released Friday to throw cold water on the possibility of another federal coronavirus relief package—despite the fact that unemployment is still at historic highs and millions remain on the brink of financial ruin.
Stephen Moore, a right-wing economist and White House adviser, told NBC that “we certainly don’t need any new spending” after the Bureau of Labor Statistics announced that the official U.S. unemployment rate fell to 13.3% in May, down from 14.7% the previous month.
“It is imperative that policymakers do not take this as a sign that it’s time to stop providing necessary relief to workers, their families, and state and local governments. The economic pain will be long-standing without additional aid.”
—Elise Gould, Economic Policy Institute
“We don’t need another spending bill for sure… We are in the recovery stage and we’re no longer in the contraction stage,” Moore said. “The most important thing now is to get rid of the extra unemployment benefits.”
Moore’s argument against additional federal relief and in favor of letting boosted unemployment benefits expire on July 31 was echoed by Republicans in Congress—even as economists warned that failing to provide additional relief for the unemployed, frontline workers, and state and local governments could send the economy into another catastrophic tailspin.
A spokesperson for Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, said in a statement that the new jobs report “underscores why Congress should take a thoughtful approach and not rush to pass expensive legislation paid for with more debt before gaining a better understanding of the economic condition of the country.”
An unnamed Republican Senate aide told the Washington Post‘s Jeff Stein that the jobs report “definitively kills any chance of trillions of new spending.” Another anonymous GOP official told the New York Times, “Goodbye phase 4.”
But economists said the comparatively positive jobs report—which David Dayen of The American Prospect dubbed “the worst best economic news in history”—is a reason to continue spending and provide more relief to the vulnerable, not to cut off aid.
“This is exactly backwards, like stopping an antibiotic prematurely because you start to feel better,” former Treasury Department economist Ernie Tedeschi tweeted in response to Moore. “This is the first jobs report to reflect our fiscal response at full capacity. If we let support expire too soon, we could have a double-dip downturn.”
Elise Gould, senior economist at the Economic Policy Institute, issued a similar warning in a statement on Friday.
“While these are welcome gains (as long as the health consequences aren’t offsetting), jobs losses since February still total 19.6 million, and are currently 13% below its February level,” said Gould. “It is imperative that policymakers do not take this as a sign that it’s time to stop providing necessary relief to workers, their families, and state and local governments. The economic pain will be long-standing without additional aid.”
The unemployment rate declined to 13.3% in May, but is still up a whopping 9.8 percentage points since February. The unemployment rate would be 19.7% if we added in misclassified and sidelined workers.
See: https://t.co/h5687Fyjd6 for a description of this calculation.
9/n pic.twitter.com/0JAACPELMu— Elise Gould (@eliselgould) June 5, 2020
In a blog post Friday, Dean Baker, senior economist at the Center for Economic and Policy Research, wrote that an improvement from the unemployment rate in April “really should not have been surprising, since we should have expected more people to be working when it was legal to work than when it was not, due to the shutdown.”
“However,” Baker added, “we are still looking at unemployment that is far worse than the Great Recession and the recovery will be seriously impaired by more layoffs in the state and local government sectors unless there is a large rescue package.”
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Common Dreams | Radio Free (2020-06-05T17:26:52+00:00) Economists Warn of Disastrous Consequences as GOP Cites One Positive Jobs Report to Say “We Don’t Need” More Relief. Retrieved from https://www.radiofree.org/2020/06/05/economists-warn-of-disastrous-consequences-as-gop-cites-one-positive-jobs-report-to-say-we-dont-need-more-relief/
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