Two recent blockbuster jobs numbers appear to indicate the U.S. economy is recovering – but as experts caution there could be more challenges on the way, they worry the positive news may discourage lawmakers from passing additional stimulus measures to help individuals in need of continued support.
About 4.8 million jobs were created in June after 2.5 million positions were added in May – marking two record months of U.S. job creation.
However, experts are warning that the economy is far from out of the woods and fear the positive data could mask the underlying obstacles.
“It is a fundamental concern that policymakers will have a false sense of optimism from the latest official, national, unemployment rate, which was again understated, but directionally a movement in the right direction,” Brian Marks, senior lecturer at the Pompea College of Business at the University of New Haven, told FOX Business. “This directional improvement was in advance of recent pauses in re-engagement. The numbers remain daunting and rationale for relief remains in effect.”
The government attributed June’s historic increase to “continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.”
As lawmakers debate whether to pass another stimulus bill on Capitol Hill this month, some prominent Republicans say there may not be a need for it.
Mick Mulvaney, the former Office of Management and Budget director and former White House chief of staff, for example, recently told FOX Business now may not be the best time to implement additional stimulus measures, citing in part the 7 million jobs that have been added between May and June.
“Things are coming back I think a little bit quicker and a little bit better than we expected, now is probably not the best time to look at another stimulus,” Mulvaney said.
Other fiscal-minded Republicans appear to agree with Mulvaney’s thought process centered on not adding more onto mounting national debt. Sen. Bill Cassidy, R-La, recently said there may not be a need for another round of stimulus payments given the sharp uptick in economic data.
Administration officials have said additional legislation would be conditional upon the economic recovery.
But the other danger in the underbelly of the recovery is that expanded unemployment benefits are scheduled to expire at the end of the month. When those funds dry households may have trouble paying their bills and may cut back on spending.
Marks described this scenario as a “perfect storm” as the additional unemployment funding ends and cases continue to climb.
The good news is that Senate Majority Leader Mitch McConnell, R-Ky., appears to be open to passing more legislation. However, a Capitol Hill source told Fox News another bill is not a foregone conclusion.
There are discussions about a second round of direct payments, though the income threshold could be lowered.
While more than 7 million jobs have been added over the past two months, the U.S. economy has only recovered about one-third of pandemic-related job losses.