The American economy added more jobs than expected last month — yet continued to fall short of the Biden administration’s promises for economic recovery.
As reported by the Bureau of Labor Statistics, total nonfarm payroll employment rose by 943,000 in July; the unemployment rate, therefore, dropped to 5.4%. Economists polled by Dow Jones expected 845,000 new jobs and 5.7% unemployment, with particularly strong gains occurring in sectors such as leisure and hospitality, local government education, and professional services.
The Biden administration had hoped for 2.4 million new jobs in the second quarter of 2021, based on a Moody’s Analytics report the White House repeatedly cited when selling its $1.5 trillion “jobs plan” earlier this year. As Republicans on the House Ways and Means Committee detail, the President entered the third quarter with nearly 700,000 fewer jobs than Moody’s predicted, even when the June report — the final report of the second quarter — is added into the total.
Although July’s report met expectations, the White House still failed to close the gap.
The labor force participation rate — the proportion of working-age adults who hold jobs — remained virtually unchanged. Meanwhile, average hourly earnings for all employees on private nonfarm payrolls between June and July rose by $0.11 to $30.54 — a slightly slower rate of increase than the change between May and June. The Bureau of Labor Statistics noted that the increase is due to “the rising demand for labor” associated with the recovery from COVID-19 and the lockdown-induced recession.
The July jobs report matches predictions offered by Rep. Kevin Brady (R-TX) — the Ranking Member of the House Ways and Means Committee — to The Daily Wire on Thursday.
Brady told Americans to watch for whether President Biden would successfully close the deficit in his administration’s promised job growth from the second quarter of 2021. According to Brady’s Friday morning press release, the economy is still 298,000 positions short of the President’s overall forecast.
On Friday, Brady also pointed out that the stronger-than-expected job growth is partially attributable to “Republican governors removing the Biden work barrier that pays the jobless more to stay home than to work” — a reference to enhanced federal unemployment insurance approved by the American Rescue Plan.
Likewise, Brady noted on Thursday that labor force participation is “stuck at a very low rate” and “hasn’t budged in six months under President Biden.” The July report appears to follow that trend — meaning that Americans will “continue to see those higher prices and those slower deliveries in a major way.”
Indeed, Brady said on Friday that the metric is “a red flag for tepid growth ahead.”
The slim deceleration in average hourly earnings confirms Brady’s prediction that rising price levels could “continue to outstrip wages for the seventh consecutive month.” Brady commented Friday that “it appears rising prices will continue to beat wage growth for a seventh consecutive month” — a reality that will be confirmed once the July inflation report is released later in August.
As Brady previously explained to The Daily Wire, “the biggest mistake Congress could make” at this point in the economic rebound “would be to double down on government spending.”
“A double down on endless government checks and the creation of new entitlements will increase dependency on government and discourage people from work and self-sufficiency,” he said. “Those are the biggest worries I think we have right now.”