Biden hails reduced jobless aid recipients

US President Joe Biden cheered news Thursday (Friday in Manila) that the number of Americans receiving unemployment benefits had fallen to the lowest level since 1969.

A little more than 1.3 million workers were receiving jobless aid in the week ended May 7, less than one percent of the labor force, the Labor Department reported.

“When I took office, there were nearly 20 million Americans on unemployment insurance to feed their families and keep a roof over their heads,” Biden said in a statement.

The figure peaked at more than 33 million in June 2020 at the height of the Covid-19 pandemic shutdowns, but now it is at a 52-year low.

“That’s millions of families moving from government support to earning a paycheck,” he said, crediting the “historic progress” to his economic policies.

With massive federal aid pumped into the US economy and record-low interest rates, the world’s largest economy has come surging back, creating a tight labor market that is pushing up wages, adding to red-hot inflation pressures.

The national unemployment rate in April was 3.6 percent, and there are nearly two job openings for every unemployed person. Biden said fighting inflation is his main focus.

Despite the good news, first-time applications for jobless benefits unexpectedly rose by 21,000 last week to 218,000, according to the Labor Department’s weekly data.

Still, economists do not expect a sudden surge in layoffs.

The jobs data “are telling a similar story, that the labor market remains tight and demand for workers is still strong,” said Rubeela Farooqi, chief US economist at High Frequency Economics.

“Layoffs are at extraordinarily low levels, not surprising given persistent labor shortages,” even though they rose from March when they were the lowest since 1968, she told Agence FrancePresse (AFP).

The Federal Reserve (the Fed) has begun an aggressive effort to cool the economy and the labor market by hiking interest rates.

“With the Fed aiming to rebalance supply and demand, the pace of job growth is likely to slow over time and layoffs will probably adjust up gradually,” Farooqi said.