New unemployment claims dropped to 184,000 last week, the lowest since 1969. It sure is going to be interesting watching the media find a way to turn that into bad news for President Joe Biden. Perhaps Vice President Kamala Harris will be too concerned about information security or buying a kitchen implement that costs less than half what many guns cost, and that can dominate the headlines instead.
It is the case that the jobless claims numbers come with caveats: This remains a volatile, unpredictable economic recovery, and seasonal adjustments, which played a significant factor in the historically low number, are harder for Labor Department economists to pin down than in a usual year. But according to the best available data … new unemployment claims were at a 52-year low, even as the headlines have been dominated by talk of how the economy is dragging Biden’s presidency down.
When we look at the economic recovery from the lowest lows of the COVID-19 pandemic, one key question is what effect the federal government’s relief packages had. The Roosevelt Institute is out with a review answering that question about the American Rescue Plan, and the conclusion is that it fulfilled the most optimistic predictions.
In fact, unemployment has dropped faster than the Congressional Budget Office and the Federal Reserve’s Federal Open Market Committee projected even after the American Rescue Plan was passed.
People aren’t just employed at higher rates than expected at the beginning of 2021. “Using the Atlanta Fed’s Wage Growth Tracker, we see younger workers (16-24 years old) saw a 9.7 percent wage increase, and the bottom 25 percent of earners saw a 5.1 percent raise,” Mike Konczal and Emily DiVito write. “Workers with a high-school education and those at the bottom of the income distribution all saw wage growth stronger than average for recovery periods. This is still true when you account for the effects of inflation. Multiple sourcesfind that around the bottom 70 percent of workers had real hourly wage increases over the past two years.”
Additionally, low-income families have gained wealth thanks to the investments of the American Rescue Plan and other relief packages—but especially thanks to the expanded child tax credit.
It’s not that everything is perfect. Thursday’s Job Openings and Labor Turnover Survey (JOLTS) showed continuing weakness in state and local government jobs, particularly in education. There are still millions of missing jobs relative to February 2020. The recovery remains unequal, with Black and Latino workers facing higher unemployment rates. Women are returning to the paid workforce, but the lost ground is likely to take years to regain.
But. With the bad news, there is plenty of good news, and in particular there’s evidence that Biden’s economic policies are working as planned, and lifting up the economy and the families in it. Not that the media is as interested in talking about that as it is in talking about the price of milk.