Record numbers of Americans quit their jobs as employers are desperately understaffed, and U.S. Treasury Secretary Janet Yellen attributes the new staffing dynamic to President Joe Biden’s pandemic relief programs and ongoing coronavirus fear.
“Americans are confident about the job market. The number of layoffs has risen to record highs, which is a sign that people are receiving offers from outside, ”said Yellen on Sunday in an interview with Face The Nation of CBS.
The Labor Department released its latest statistics on Friday, showing a record 4.4 million people left their jobs in September alone.
There were more job vacancies than 7.7 million unemployed in September, highlighting the difficulty many companies have in finding work.
Yellen admitted that the expected urgency in getting back to work after the pandemic wiped out so many jobs has been undermined by Biden’s American Rescue Plan and the CARES Act signed by former President Donald Trump.
She said they made Americans “feel good about their finances” despite the otherwise widespread economic damage.
Biden and the Democrats in Congress have made attempts to extend some of these programs, but have met opposition from Republicans and even moderates within their own party. Critics claimed extending the programs would discourage people returning to work.
That’s what Treasury Secretary Janet Yellen says @margbrennan In an exclusive interview that labor force participation is “pretty depressed” compared to pre-pandemic levels, she says this raises concerns about COVID exposure, especially in “public” areas like childcare. pic.twitter.com/I8pcIAnXsi
– Face the Nation (@FaceTheNation) November 12, 2021
In a CBS interview broadcast on Sunday, Treasury Secretary Yellen blamed both labor shortages and rising inflation on the ongoing coronavirus pandemic
Yellen also noted that the majority of the vacancies in September were front support jobs.
“I think some of that reflects concerns about COVID and exposure to COVID, especially in jobs that involve public-facing activities,” Yellen told host Margaret Brennan.
But the latest job report, released last week, shows the US is at least partially moving away from the job cuts forced by a pandemic.
She said people were leaving their jobs in droves, in part because Joe Biden’s American Rescue Plan put them in a better financial position than they would have been in any other economic downturn
It found that employers increased their hiring and added 531,000 jobs in October, while the unemployment rate fell from 4.8 percent to 4.6 percent. New hires rebounded as the delta wave that slowed job growth in August and September subsided.
The Biden official added that previous dropouts in the education and childcare industries forced some otherwise working parents to stay home to look after their children.
“The programs in place, the American Rescue Plan and CARES Act and other programs, should help households and families get through this so that their incomes are not too badly affected,” Yellen said. “In financial terms, Americans say they feel good about their finances, and that is no accident.”
In addition to the number of unemployed, there are about 5 million fewer job seekers compared to pre-pandemic trends, making it much more difficult for employers to recruit.
Yellen compared it to the slower economic recovery after the 2008 financial crisis – which she believed “devastated” the finances of many families.
“That didn’t happen this time, so that’s the good thing. But the spending is high and the labor supply has not returned to normal, ”she said. “Unemployment is low and labor force participation is quite low compared to pre-pandemic levels.”
“As I said, if we really have the pandemic under control, I think the labor supply will normalize again. But yes, we have a tight job market, not a loose job market. ”
In addition, the report said there were 10.4 million vacancies on the last day of September, up from 10.6 million in August
A report by the US Department of Labor on Friday found that 4.4 million people left their jobs in September, about 3 percent of the country’s workforce. That is 4.3 million in August and well above the pre-pandemic level of 3.6 million
The record number of jobs indicate a historic level of turmoil in the labor market as newly empowered workers leave their jobs, often for higher wages or better working conditions.
Income is rising, Americans are spending, and the economy is growing, and employers have increased their attitudes to keep up.
However, rising inflation offsets much of the wage increases for workers.
And just like the job market, Yellen believes inflation will “depend on the pandemic”.
US consumer prices rose 6.2 percent year-over-year in October, bringing families to the highest inflation rate since 1990, the Department of Labor said on Wednesday.
From September to October prices rose by almost a whole percentage point.
“I think it’s important to realize that the cause of this inflation is the pandemic. It almost brought our economy to a standstill. It has pushed unemployment up to almost 15 percent and we have opened up in phases. And the pandemic, in its effects, is really responsible for the inflation we’re seeing, ”Yellen said.