The unemployment report showed that the economy is springing back as more Americans get their covid-19 vaccinations. It had long been obvious to anyone paying attention that pandemic restrictions, more than financial distress, have been keeping the economy down. Most of the missing jobs were in sectors such as education or restaurants, which were wholly or partially shut down by efforts to keep the virus in check. It stands to reason that as those restrictions are relaxed, jobs would return. That’s exactly what happened last month, as more than half of the 916,000 new jobs were added in the hard-hit entertainment and leisure and education sectors.
These increases occurred before a single dollar of Biden’s stimulus package found its way into Americans’ bank accounts. It follows that increased employment will naturally occur as more pandemic-based capacity controls end, and as more Americans are vaccinated and feel comfortable resuming their pre-pandemic lives. Biden’s $1,400 per-person checks may make those people likelier to spend more, but they won’t change the underlying employment dynamic. That was always being driven by government regulation and social fear. Instead, the new money will likely make Americans more willing to pay more for things they would have bought anyway. There’s a word for that: inflation.