- A former top economist to Barack Obama said the April jobs report was “stunning.”
- “It’s going to be complicated and messy” for the economy to get back on track, Jason Furman says.
- He outlined 5 factors likely keeping people from returning to work, including virus fears and school closures.
- See more stories on Insider’s business page.
Jason Furman, a former top economist to President Barack Obama, said Friday’s April jobs report was a “stunning” one.
“But you should never be too stunned, as data is very noisy and we’re going through a very strange period,” he told Insider in an interview.
The latest jobs report showed the economy had recovered 266,000 jobs in April, a far smaller amount than March’s gain and far below projections of a gain of 1 million jobs. Economists had expected a massive job surge due to government stimulus dollars, increased vaccinations, and easing restrictions on businesses.
The unemployment rate stood relatively unchanged at 6.1%. But the job gains were a sharp reduction after businesses added 800,000 jobs in March. Treasury Secretary Yellen said the recovery would be “bumpy” at the White House on Friday.
Furman, now a professor at Harvard University and formerly the chair of President Barack Obama’s Council of Economic Advisers, laid out five factors that he believes are keeping workers sidelined to varying degrees:
- Fear of the virus,
- Early retirements,
- School closures,
- Lack of affordable childcare, and
- Enhanced unemployment insurance ($300-per-week).
“Very likely the biggest factor is the virus,” Furman said. “Some people, as the virus goes down, they’ll return. Some people retired early because of the virus and its an open question as to whether they’ll come back.”
Furman also said school closures and difficulties of accessing childcare were another pair of factors restraining the recovery. “That’s really important, especially for women with younger children in the economy.”
He also said federal unemployment benefits from President Joe Biden’s stimulus were another factor, but likely not the main one. “I don’t think there’s any evidence that it’s the main cause.”
After the report’s release, Democrats mounted a fresh defense of their $4 trillion infrastructure spending plans as Republicans pounced, citing the lackluster jobs report as proof that Biden’s spending is holding back hiring.
Furman said its spending would address longstanding problems and inequalities in the workforce. “It makes just as much sense in light of these numbers as it did before these numbers,” he said. “It’s designed to address our structural problems.
Furman said he was optimistic that overall trends are pointing in the right direction, but cautioned there could be a start-stop motion to the recovery.
“We’re gonna see pockets of strength, pockets of weakness, areas of overheating, areas where it is uncool — it’s going to be complicated and messy,” he said.