Surprise jobs report adds doubt to second round

Once Washington absorbed Friday’s surprise jobs report showing a gain of 2.5 million jobs in May (after forecasts for 8 million jobs lost) many turned the question of how the news impacts the long awaited negotiations for an additional phase 4 stimulus deal.

“We’ll be asking for additional stimulus money,” President Trump said Friday morning as some speculated that a deal might now be off the table. The president did leave open many questions about what would be in a package. Trump focused most of his remarks on his idea for a payroll tax cut, something Democrats have repeatedly said is a non-starter.

He also talked about additional provisions for restaurants and the entertainment industry. “We’ll be announcing it pretty soon,” he said. Before the employment numbers came in, the White House was reportedly pushing for about $1 billion in stimulus, a much lower level than what Democrats say is necessary.

In an interview with the Washington Post, Peter Navarro, director of Trade and Manufacturing Policy, also signaled that the White House might not be looking toward big stimulus packages. “You can’t solve an underlying structural process solely with Keynesian stimulus,” he said, discussing whether more money should be pumped into the economy.

President Trump speaks during a news conference in the Rose Garden at the White House on Friday. The U.S. Labor Department announced the unemployment rate fell to 13.3 percent in May, a surprising improvement in the nation’s job market. (Chip Somodevilla/Getty Images)

Treasury Secretary Steven Mnuchin, in his remarks Friday, said the focus of any new legislation would be on getting “every American back to work,” implying that measures like expanding unemployment insurance and additional stimulus checks might not be a White House priority.

Larry Kudlow, director of the White House’s National Economic Council, echoed the point in a Fox Business interview. He said he thought the economy needed “less ‘rescue,’ and more incentives,” so that it “pays more to work, to invest, and to take risks.”

‘It validates the stimulus we had in place’

Democrats, by and large, continued their push for a big stimulus package

The number “validates the stimulus we had in place,” said Rep. Don Beyer (D-VA) in an interview with Yahoo Finance. Beyer, who serves as the Vice Chairman of the Joint Economic Committee, tried to say that the bump this month, which Trump was quick to take personal credit for, was a result of the “wholly bipartisan” legislation.

The May jobs report showed an unexpected rise in non-farm payrolls (David Foster/Yahoo Finance)

The Democratic leadership was blunter about the need for more stimulus. ”It’s a very strong likelihood things will go down again if there’s no new stimulus,” said Sen. Chuck Schumer (D-NY) during an MSNBC interview. House Speaker Nancy Pelosi added, in a statement, that without passage of the HEROES Act – the House Democrats’ $3 billion proposal which passed the House but has been ignored in the Senate – “this fragile progress will collapse.”

The news Friday appeared to bolster Republican efforts to move slow on another deal. “I reckon they’ll resume after the July 4 holiday weekend,” Kudlow said of additional negotiations. Previously, lawmakers had discussed hammering out at least some parts of a deal in June.

Kudlow’s remarks suggest negotiations might not even begin until after the next jobs report, scheduled for release on July 3, is in the books. 

Ben Werschkul is a producer for Yahoo Finance in Washington, DC.

Read more:

May jobs report: US economy unexpectedly adds 2.5 million payrolls, unemployment rate falls to 13.3%

Cory Booker calls on lawmakers to get ‘their act together’ on new coronavirus stimulus

Coronavirus stimulus checks: What would need to happen before a second round

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