The latest jobs report released last Friday shows payroll jobs rose by 261,000 last month even as employment according to DOL’s household survey fell by 328,000, causing the US unemployment rate to tick up to 3.7 percent. President Joe Biden nonetheless applauded the jobs report, saying it “shows that our jobs recovery remains strong” while marking “a record setting 10 million job increase” since he took office.

That characterization repeats one of the president’s closing arguments during this campaign season—that his administration is responsible for historic job creation. Last month he touted “the fastest job growth at any point of any President in all of American history. Historic progress.” In August he linked that job growth specifically to his March 2021 stimulus law, praising “the American Rescue Plan that helped create nearly 10 million new jobs.” Last week the White House spread the credit among its other big-spending plans, saying: “The Bipartisan Infrastructure Law—along with the CHIPS and Science Act, Inflation Reduction Act, and American Rescue Plan—are creating millions of good-paying union jobs.” 

As they often do, the president and his administration omitted key context behind the “10 million jobs” figure. The most important is that nonpartisan experts predicted historic job creation even without any of the administration’s trillion-dollar spending plans, as the economy continued to recover from massive pandemic layoffs. As Politifact put it in an August report (“Joe Biden Exaggerates Job-Creation Impact of American Rescue Plan”):

The Congressional Budget Office analyzed the American Rescue Plan while it was being debated. Its analysts in February 2021 projected that even without the bill’s passage, employment would organically rise by 6.25 million jobs in 2021 and 1.74 million jobs in 2022.

Let’s review what that means.

First, as I noted in January, the American Rescue Plan (ARP) failed to create any of the four million jobs the administration promised it would during calendar year 2021.

Second, even if one disregards the administration’s own timeline, their target is still not met. As displayed above, the administration argued the ARP would create 4 million jobs in 2021. But even if we strike “in 2021,” it turns out those promised additional jobs still haven’t turned up. Counting the change in payroll employment between March 2021 (144.4 million) when the ARP was enacted and October 2022 (153.3 million), there has been an increase of 8.9 million jobs. But recall that CBO projected millions of jobs would be created without the ARP. CBO’s pre-ARP estimates suggest some 6.5 million jobs would have been created during that same period without the ARP. Even if one implausibly assumes every additional job above CBO’s baseline is attributable to the ARP, that still doesn’t match the four million additional jobs the administration claimed the legislation would create.

Third, other CBO projections make clear that the administration always faced an uphill battle in arguing the ARP would create 4 million jobs in 2021. Comparing CBO’s pre-ARP estimate of 521,000 jobs created per month in 2021 with their post-ARP projection of 587,000, CBO expected monthly job creation to grow by only 66,000 jobs last year as a result of that law. Not only has that not been realized, but as noted above actual job creation in 2021 fell short of CBO’s projections without the bill:

That’s despite—or some might argue because of—the massive increase in benefits spending that immediately followed the ARP’s enactment. CBO separately projected the ARP would cost nearly $1.2 trillion in fiscal year 2021 (that is, from March through September 2021), reflecting almost two-thirds of the mammoth legislation’s $1.9 trillion total cost. Examples of  fiscal year 2021 spending increases include a third round of stimulus checks ($394 billion), more state fiscal relief ($284 billion), and more federal unemployment benefits ($194 billion). The temporarily expanded and monthly child tax credit, which ran from July 2021 through December 2021, cost taxpayers another $109 billion across fiscal year 2021 and early 2022. Only after the bulk of those massive benefit increases expired has job creation matched CBO’s projections.

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