White House hopes for a swift economic recovery from the miseries of the coronavirus pandemic received a major jolt on Friday with a surprise jobs report that found the unemployment rate fell in May and the country actually added 2.5 million jobs.
The report stunned economic observers and delighted a White House that up to that point had been embroiled in a difficult week dominated by controversy over President Trump’s handling of protests for racial justice across the country.
Trump quickly went to the Rose Garden to tout the figures while other administration officials made the rounds on cable television.
“Today is probably, if you think of it, the greatest comeback in America history,” Trump said. “It’s not going to stop here. It’s going to keep going.”
A strong economy has been central to Trump’s reelection campaign, and the national lockdowns caused by the pandemic had seemed to weaken his greatest strength.
People close to the White House said the new figures suggest the economy may be turning around more quickly than previously thought — and just in time for Trump.
“If there is a fast-moving recovery through the late summer and into the fall, it’s going to give him a tremendous amount of momentum,” said one former White House official.
Still, millions of Americans remain out of work, and public health experts fear a resurgence in coronavirus cases. Some economists are warning the recovery is likely to be a long one and that a double-digit unemployment rate is likely around the time of the election.
Mark Zandi, chief economist for Moody’s Analytics, said the new data showed that the U.S. economy turned a corner more quicly than expected. But he argued that the White House has been overly optimistic in predicting a “V-shaped” rebound, saying it could take until mid-decade to get back to full employment.
“I expected this kind of number in June, not May. The business reopening just happened earlier,” Zandi said. “It’s making a very strong case that the recession is over and the economy has turned.”
The White House had endured a week of bruising headlines that dwelled on the aggressive clearing of peaceful protesters before Trump staged a photo-op outside St. John’s Episcopal Church. Since then, numerous military officials, including former Defense Secretary James Mattis, have condemned Trump, who, according to a new set of polls, is trailing presumptive Democratic nominee Joe Biden.
Trump appeared energized by the jobs report, tweeting out positive reactions from cable news hosts and hastily arranging the Rose Garden event that lasted roughly an hour despite high heat and humidity.
White House aides and advisers were relieved and rejuvenated by the jobs numbers, officials said, particularly given the dire expectations among economic experts. Some had predicted the unemployment rate would inch toward 20 percent due to the pandemic.
“Today is a great day for America,” Vice President Pence declared in the Rose Garden.
Economic adviser Kevin Hassett hailed it as a “historic day” while acknowledging that “there’s still a lot of work left to do.”
One former White House official described the jobs report as “much-needed good news” for the president and said it lent credence to Trump’s prediction that the U.S. would see a swift economic rebound. But the person warned it would be premature for the White House to declare victory.
“There are four more reports after this one before the election, so it also isn’t the time for a ‘mission accomplished’ moment,” the former official said. “And those subsequent reports contain revisions to previous months. But for the next month at least he has a strong talking point to use to regain his footing.”
The White House has paused formal talks with Congress on the next round of stimulus, waiting to see the impact of roughly $3 trillion in relief that has already been implemented. Some outside advisers have recommended the White House rethink future stimulus spending in light of the new numbers.
“Everyone has been caught so off guard by this news that it’s time to rethink things,” said Stephen Moore, a conservative economist who said he spoke to the White House on Friday and recommended Trump advocate for a payroll tax cut if additional assistance is needed during the summer.
“I am not arguing that we are out of the woods by any means. We are not,” Moore said.
National Economic Council Director Larry Kudlow told The Hill in an interview Thursday evening that he expected formal discussions to resume in early July, noting that he and Hassett have been holding “informal” conference calls with bipartisan members of Congress on next steps.
Kudlow noted that Trump has expressed interest in a payroll tax holiday for workers, business tax deductions for restaurants and entertainment, liability limitations, and infrastructure investment but didn’t detail specific measures under discussion.
“I think that some rescue may continue, but we really need long-term growth incentives, and you can absolutely recover lost ground and get back to where we were,” Kudlow said.
Economists say that it would be a mistake for the administration to pull back on further stimulus, saying measures such as an extension of unemployment benefits and aid to states are necessary to keep the economy humming.
Forgoing another stimulus package is “the biggest risk right now to the directional improvement of an economy that is still in recession,” said Joe Brusuelas, chief economist at tax and audit firm RSM. “If the unemployment benefits aren’t renewed, what you’ll see is what financial professionals call ‘up the escalator, down the mineshaft.’”
A sustained economic turnaround will be critical to Trump’s reelection chances.
While Trump has consistently trailed Biden in the polls, with that deficit widening this week, voters generally give the president higher marks on the economy. Voters in Arizona, Wisconsin and Ohio said in Fox News polls released this week that they trust the president more than Biden to handle the economy.
Democrats downplayed the significance of the figures released on Friday.
“I don’t blame the president and his team for trying to hype the heck out of this. After all, they’ve had nothing but bad news and poll numbers for weeks now,” said Democratic strategist Jim Manley, communications director for former Senate Majority Leader Harry Reid (D-Nev.).
“But the reality is that these numbers are only a snapshot in time while the American people are increasingly upset about the direction this country is heading in,” he added.
For Trump, one challenge will be remaining focused on the economic recovery without muddling his message with controversies and incendiary statements.
As the president spoke in the Rose Garden about Friday’s jobs numbers, he veered into discussing George Floyd, a black man who died last week when a white Minneapolis police officer knelt on his neck for nearly nine minutes.
“Hopefully George is looking down right now and saying this is a great thing that’s happening for our country,” Trump said. “This is a great day for him. It’s a great day for everybody. This is a great day for everybody. This is a great, great day in terms of equality.”
While Trump’s remarks came amid comments about the need for equal treatment under the law for all Americans, they were widely criticized given that the broader remarks were about the jobs numbers.
Biden seized on the episode later Friday, calling it “despicable” for Trump to put words in Floyd’s mouth.
“And, the fact that he did so on a day when Black unemployment rose and black youth unemployment skyrocketed — tells you everything you need to know about who this man is and what he cares about,” Biden said in prepared remarks.
Sylvan Lane contributed.