US economy shows gains

7 March, 2021 12:00 AM printer

WASHINGTON: US Democrats pushed ahead with President Joe Biden’s massive Covid-19 relief package early Saturday after reaching a compromise on unemployment benefits and setting the $1.9 trillion stimulus bill on a path towards a final vote.

Negotiations in the evenly divided Senate had frozen the chamber’s action for some nine hours before the Democrats reached agreement with moderate Senator Joe Manchin, who had balked at the scale of the benefits, reports AFP.

“This agreement allows us to move forward on the urgently needed American Rescue Plan,” White House spokeswoman Jen Psaki said.

Votes on more amendments to the bill were set to occur through the night and into Saturday, with a final vote expected some time this weekend.

The breakthrough came against a backdrop of strong US economic data signaling that the world’s largest economy may finally be healing.

They included better-than-expected hiring in February as businesses battered by the pandemic began recruiting again.

Payrolls jumped by 379,000 last month, which was almost double expectations and pushed the unemployment rate down slightly to 6.2 percent, the Labor Department reported.

The vast majority of the gains were in the leisure and hospitality sector, which was devastated in the pandemic’s early months.

Yet the economy was still short 9.5 million jobs compared with February 2020, before the pandemic began, the report said.

Biden said the data underscored the need for lawmakers to approve his plan for nearly $1.9 trillion in aid, and his economic advisers said the current pace of job gains meant it would take two years to recover to pre-pandemic levels.

“We can’t go one step forward and two steps backward,” Biden said at the White House. “The rescue plan is absolutely essential to turning this around.”

But on Friday the whole bill had appeared to be under threat.

The Senate impasse was over the amount and duration of supplemental unemployment insurance benefits for people left jobless during the pandemic.

Democrats had struggled to keep Manchin’s support for expanded unemployment aid in the measure, but ultimately he agreed to a compromise that reduced jobless benefits from $400 to $300 but extended them to September 6.