It is not difficult to see why the economy may not respond strongly to the latest stimulus law.
The strong economic recovery came to a surprising halt amid the federal government reporting only 266,000 new net jobs created in April. Axios adds that “forecasters had floated gains close to 1 million, making this the biggest miss, relative to expectations, in decades.” And that is not the only bad news: March’s booming 916,000 net jobs gain was also revised down to 770,000.
The unemployment rate that was projected by the Congressional Budget Office to continue falling toward 5.3 percent by the end of the year instead nudged up from 6.0 to 6.1 percent.
Notably, that CBO forecast of a strong labor-market recovery was released even before President Biden signed the latest $1.9 trillion “stimulus” bill into law on March 11. Advocates promised that adding this budget-busting legislation – with its relief checks, state- and local-government bailouts, school-renovation grants, and unemployment-bonus checks – would accelerate the recovery and drive down joblessness even faster than the CBO forecast. While it’s still early, the latest jobs figures suggest that the post-stimulus recovery is instead slowing down.
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