By Victor Reklaitis
Former Obama adviser warns Biden's plan may be too big
President Joe Biden on Friday continued to make the case for his $1.9 trillion economic relief plan, with his pitch coming after a monthly employment report (link) showed the U.S. economy added a meager 49,000 jobs in January.
The report also said the private sector created just 6,000 jobs last month, while the unemployment rate fell to 6.3% largely because people dropped out of the labor force after giving up on job searches.
"We saw the jobs report -- only 6,000 private-sector jobs have been created," Biden said, as he met with House Democrats at the White House about his COVID-19 aid proposal. "At that rate, it's going to take 10 years before we get to full unemployment. That's not hyperbole. That's a fact."
Biden said a lesson for the present time from the stimulus package after the financial crisis of 2009 is that, "We can't do too much here. We can do too little."
"Real, live people are hurting, and we can fix it," he added.
Related:The coronavirus pandemic has remade our working lives, and it's been anything but fair (link)
Biden is scheduled to deliver a speech at 11:45 a.m. Eastern about the state of the economy and the need for his aid proposal, which is called the "American Rescue Plan."
Joseph Brusuelas, chief economist at RSM US, made a similar point as the president as he assessed the latest jobs report.
"The soft January US employment report strongly implies that the next round of fiscal aid/stimulus needs to avoid an error on the side of caution and go big. Outside of professional business and services hiring this report is undeniably weak," Brusuelas said in a tweet (link).
Read more:U.S. labor market displays 'faint heartbeat' -- economists react to January jobs report (link)
But economist Larry Summers, who was a top adviser in the Obama administration, warned in a Washington Post column (link) on Thursday that Biden's plan could be too big and might "set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability."
Democratic lawmakers have signaled they're ready to use a process called budget reconciliation to push through Biden's $1.9 trillion plan without any Republican support (link), with the Senate voting early Friday (link) in favor of a budget resolution that will allow for fast tracking it.
See:Feb. 16 is the next big day for Biden's economic plan (link)
-Victor Reklaitis; 415-439-6400; AskNewswires@dowjones.com
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02-05-21 1140ETCopyright (c) 2021 Dow Jones & Company, Inc.