Axios AM Thought Bubble
February 05, 2021
Good morning. Axios' Courtenay Brown and Felix Salmon here to unpack today's jobs data.
- Smart Brevity™ count: 386 words ... 1.5 minutes.
1 big thing: The Trump-COVID jobs legacy
The last major economic datapoint of the Trump era is out.
- The economy ended the Trump years with an unemployment rate of 6.3%. That's a lot lower than the pandemic-induced high point of 14.8% in April, but still well above the 4.7% unemployment that Barack Obama left behind.
Why it matters: Former President Trump inherited a flourishing labor market. He's handing President Biden one that has a ways to go before recovering from an unprecedented shock.
By the numbers: When Trump took office, the economy had 145.6 million jobs. The legacy he leaves Biden, as measured during the week of Jan. 11: 3 million fewer jobs, and a labor force of 160 million people that's 4.5 million people smaller than it was four years ago.
Flashback: Unemployment hit a 50-year low while Trump was in office. Jobless rates for Blacks, Hispanics, and Asians also hit record lows.
- This was a big deal: Policymakers said the prolonged low unemployment rate helped "first fired, last hired" groups that benefit most from a tight labor market.
Yes, but: The strong labor market was not robust enough to survive the combination of a pandemic and a weak federal response. The number of jobs in the U.S. fell by more than 20 million in April alone, and as of January remains about 10 million jobs below its all-time high.
- At January's pace of 49,000 jobs per month, it would take 200 months — almost 17 years — to regain the level we saw a year ago.
What's next: The Biden administration is banking on a massive relief bill to help shore up the labor market — and the broader economy.
What to watch: Unemployment could fall to 5% by year-end if Biden's $1.9 trillion relief package passes, economists at S&P Global predicted this week.
- But even without it, the CBO says the jobless rate will drop to 5.3% by Q4 2021 — though it’ll be another three years before all the jobs lost are fully recovered.
The bottom line: More than 1 million Americans have filed for unemployment in each of the past 46 weeks. We're still very much in the middle of a jobs crisis.