Biden says surge in hiring shows his economic plan is working

US president is urging Congress to advance legislation funding areas such as public works and education

US President Joe Biden said July’s expectations-beating jobs report shows that his economic policies are working and he urged Congress to advance legislation that would spend trillions of dollars on public works, education and other priorities.

“The Biden plan is working,” the president said at the White House on Friday. “The Biden plan is producing results. And the Biden plan is moving the country forward.”

US payrolls climbed by 943,000 in July, the Labour Department reported, the biggest addition in nearly a year, exceeding the median estimate of an 870,000 gain in a Bloomberg survey of economists.

The unemployment rate dropped by half a percentage point to 5.4 per cent, fuelled by a surge in economic activity as more Americans were vaccinated against the coronavirus.

The rosy report — which also saw stronger-than-expected earnings and an upwards revision of the June jobs figures — offers momentum to the White House as Mr Biden seeks to build congressional support for a $550 billion bipartisan infrastructure bill, as well as a Democrat-only spending-and-tax package that could total as much as $3.5 trillion.

Senate efforts to rush a vote on the infrastructure plan were thwarted on Thursday amid disagreements over cryptocurrency reporting requirements and allowing state and local governments to reallocate coronavirus aid to public works projects.

The president has argued that the economic success of his early months in office was facilitated by his administration’s vaccination effort and the $1.9tn pandemic relief plan passed during his early days in office, and that additional federal spending is necessary to further those gains.

“We put in place the necessary tools early in my presidency … [to] fight the virus and fight the economic mess we inherited,” he said.

His policies, he added, will prevent the recent surge in Covid-19 cases from the Delta variant of the virus from “shutting down our schools, our businesses and our society”. He didn’t respond to questions.

A 'Help Wanted' sign is posted at a restaurant in Los Angeles, California. AFP

Republican detractors have said that federal spending is driving up inflation and that trillions of dollars more will be unnecessary to encourage robust economic growth.

“Tennesseans are paying more at the gas pump and grocery store. Meanwhile, Biden and the Democrats want to pass a reckless multitrillion dollar tax and spend plan,” Marsha Blackburn, a Tennessee Republican senator, tweeted following the jobs report release on Friday.

Republicans have also said that expanded unemployment benefits and government aid have discouraged people from returning to the workforce — and about half of states have ended those benefits before their planned expiration in early September.

Americans classified as long-term unemployed, or those who have been unemployed for 27 weeks or more, declined by 560,000 in July — the biggest drop on record. Still, payrolls remain 5.7 million short of pre-pandemic levels — a figure Democrats say justifies additional investment, particularly as new, more contagious variants of the coronavirus circulate.

“We must sustain this growth and ensure that all can share in its benefits by passing transformative infrastructure and reconciliation bills that truly meet families’ needs,” House Speaker Nancy Pelosi said in a statement on Friday. “At the same time, Democrats will continue to fight for families struggling as the Delta variant accelerates.”