Facing a stymied legislative agenda and rapidly falling polls, President Joe Biden has tried to revive his flagging fortunes by extolling the administration’s economic record. For example, this week he stated, “We’re entering 2022 in a position of a unique economic strength. Six million new jobs, a record number for a new president, have been created since January last.” While the president is right that millions of jobs returned this year, as was widely expected following unprecedented pandemic layoffs in 2020, the latest jobs report shows that gain doesn’t match nonpartisan projections for job growth resulting from the policies Biden inherited. That also means the $1.9 trillion American Rescue Plan Democrats enacted in March 2021 has not created any of the additional four million jobs supporters promised it would this year.
The nonpartisan Congressional Budget Office projected on February 1, 2021 that monthly job growth in 2021 (specifically, the change in payroll employment between the fourth quarters of 2020 and 2021) would average 521,000 — without enactment of the American Rescue Plan. As displayed in the chart below, that would mean a gain of 6.252 million jobs over those four quarters. With the release of today’s data for December 2021, we now know payroll employment in the fourth quarter of 2021 averaged 148.735 million — an increase of 6.116 million compared with the average of 142.619 million in the fourth quarter of 2020. That means the job growth the President praised this week has fallen 136,000 jobs short of what was expected under the policies he inherited.
But the story doesn’t end there. As I reviewed last month, President Biden and congressional Democrats promised their $1.9 trillion American Rescue Plan would create millions of additional new jobs this year — on top of what White House economists called the “dire” baseline of 6.252 million new jobs reflected in CBO’s projection without that enormous legislation. The White House on February 3 stated that legislation would mean “a difference of 4 million jobs in 2021.” House Speaker Nancy Pelosi (D-CA) repeated that claim, stating that “if we do not enact this package, the results could be catastrophic,” including “4 million fewer jobs.”
Yet as the chart above displays, not one of those four million additional jobs supposedly resulting from that $1.9 trillion spending plan has appeared, as job creation in 2021 did not even match CBO’s projection without that legislation. But that hasn’t kept the President from rebranding what Democrats formerly described as a “dire” and “catastrophic” outcome when selling their massive spending plan as now being a sign of “unique economic strength.”
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