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On Tuesday, the Biden administration defended its economic plan following a weak April employment report and a fragile recovery. Listed data in a memo addressed to the US National Economic Council director Brian Deese and Council of Economic Advisers chair Cecilia Rouse showing their strategy was working. There was also a downward trend in the initial unemployment insurance claims and a robust first quarter GDP estimate. Moreover, both have pointed out that it would take time for the economy to transition from pandemic lockdowns to consistent growth. The memo also said, “Reawakening dormant sectors of the economy has led to temporary imbalances between supply and demand, in addition to specific and limited supply chain bottlenecks. But it is an encouraging sign that consumers are returning to sectors of the economy that retreated dramatically in the recession for restaurants, hotels, rental cars, airlines, and many others”.

It is important that the White House also addressed employment concerns as governors from many states announced the end of the $300 federal unemployment bump as businesses struggle to find workers. 22 US States have decided to end their participation in the federal unemployment insurance assistance program. They believe it has served as a deterrent for reemployment. The White House said that available data suggests the largest barrier for returning to work is Covid-19. Deese and Rouse said, “As we get the majority of working age adults fully vaccinated, we anticipate companies that provide fair wages and safe work environments will find Americans eager to work. In some cases, employers will raise wages to attract workers. This is a positive development, particularly for lower wage workers who have seen little wage growth over the past decades”.

President Biden has announced 2 trillion-dollar spending packages that are being worked on in Congress. There are several headwinds threatening an economic recovery as more Americans have become fully vaccinated and the government starts to lift mask requirements. Consumer prices increased more than 4% in April, including the gasoline and food prices are on the rise beyond widely labor shortage. The supply chain shortage is contributing in certain industries, including fuel after a ransomware attack recently shut down a major East Coast supplier. However, the low inventory in the housing market has also increased prices. The median existing home sale price in March rose 17.2% year over year to a historic high of $329,100. It is noteworthy that the US economic added 266,000 jobs in April, but it is still at least 8 million jobs below pre-pandemic levels.