President Joe Biden keeps seeing good economic news and bad public approval ratings.
The job market is what economists call “inefficiently tight,” a problem the United States also faced during the Vietnam War, the Korean War and World War II. The current tightness is as severe as it was at the end of World War II. This mismatch causes companies and consumers alike to feel as though the economy is in a rut, said Pascal Michaillat, an economist at Brown University.
This sounds like a good problem to have because it implies wages should increase. But economic theory suggests the only way to resolve this situation is for unemployment to rise. House Ways and Means Committee Chairman Jason Smith, R-Mo., said small-business owners “are telling us that Democrats’ anti-work policies have made it difficult to stock their shelves, hire workers and keep their doors open.”
Biden set out to use the COVID-19 aid dollars to get people back to work quickly and prevent the typical “scarring” in recessions that can leave people earning less for the rest of their careers and, in some cases, permanently jobless. He succeeded at that mission as the economy has about 4 million more jobs than the Congressional Budget Office forecasted it would at this stage.
The official, who spoke on condition of anonymity to discuss private conversations, said Biden's goal was to spur a burst of hiring that would cause strong growth in the long term. If the jobs recovery had dragged on, some people would give up hope and drop out of the labor force, reducing the ability of the economy to grow for decades to come.
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