As the naysayers, detractors and liberal politicians smugly waited for what was predicted to be the worst jobless report since the Great Depression, the U.S. economy rebounded with a bang in May, producing an increase of 2.5 million jobs and sending the unemployment rate down to 13.3 percent, in spite of the numerous virus-related restrictions and shutdowns that continue to hamper businesses.
In the Household Survey, which better measures hirings by new businesses, the number of jobs, 3.8 million, was even more impressive.
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America is not down for the count, by any means.
Economists surveyed by Dow Jones had expected a drop of more than 8 million jobs in May and an increase in the unemployment rate that would upped it to almost 20 percent.
They should have listened to investors instead.
Stocks were surging this week leading up to this report and pundits were wondering if investors had taken leave of their senses. But stockholders knew better than the so-called experts.
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The question now is what should we do to keep this positive momentum going?
President Trump’s tax cut was a huge success, jumpstarting an economy that had languished in a slow recovery during the Obama administration. We can build on that achievement by suspending the payroll tax -- labeled FICA on American's paychecks -- for a year.
The holiday would be a boon for workers and companies, immediately putting cash in consumers’ pockets and local economies. People making $40,000 year would see a $3,000 increase in net, after-tax pay, those making $50,000 would receive $4,000.
That’s a meaningful addition to middle-class family budgets. It would not only benefit workers but their employers as well, who pay half the 15.3 percent charge. When their costs go down they can hire more people, simple as that. Pres. Trump supports a payroll tax holiday, but Speaker Nancy Pelosi does not.
Suspending the payroll tax is a cheap way to stimulate economic growth. No new agency, no new bureaucracy, no checks needed, just don’t take money away from people to begin with.
The president should make this tax suspension a single proposal for an up -or -down vote in Congress. Let’s see how many Democrats will stay loyal to Pelosi’s naysaying.
We can also keep the economic rally rolling by continuing to open up businesses. People are tired of being cooped up in their homes – cabin fever is a real thing – and are ready and willing to go back to work. Let them.