Rep. Kevin Brady: The U.S. economy is recovering

Rep. Kevin Brady: The U.S. economy is recovering

The July jobs report will give lawmakers a look at the strength of the U.S. economy as COVID - 19 cases climb and multitrillion spending plans make their way through Congress.

Texas Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, told FOX Business that he is looking at three key indicators within the report as measures of how well the U.S. economy is recovering under the current administration's policies.

One of those indicators is wages, which Brady noted have grown during the year at a slower pace than inflation. The consequence has been a reduction in Americans' purchasing power.

Wages were up 0.3% month over month and 3.6% year over year in June.

However, the nonsupervisory average hourly production and real workers dropped by 2.2% year over year, according to the Bureau of Labor Statistics.

Consumer prices grew for the month ended June 5.3%.

I'm convinced the reason economic optimism is down, and consumer sentiment is down, and the president's net job approval rating on the economy is down, is because people are seeing rising prices in nearly every aspect of their lives, Brady told FOX Business.

Another concern of businesses around the country is moving more workers from the sidelines into the labor force.

The labor force participation rate in June was 61.6%, representing the active workforce of the economy. That is 1.7 percentage points below pre-pandemic levels.

Brady raised concerns about not only expanded jobless benefits that are still in use in roughly half the country, but also expanded Child Tax Credit, which he said may already be discouraging workers from seeking out employment opportunities.

Now with the child tax credit kicked in, we're hearing from businesses that they are losing workers as a result of that or that they're worried that this is yet another reason why they are not seeing applicants, Brady said.

The expansion of Child Tax Credit is $3,600 for children under 6 and $3,000 for children between 6 and 17 years old.

The IRS will claim half of the total credit in advance monthly payments from July 15, while taxpayers will pay the remainder when they file their 2021 return.

The Federal Reserve chair Jerome Powell said during a press conference last month that it is an unusual situation to have the ratio of vacancies to unemployed as high as it is. He explained that the Central Bank believed that people are not seeking to return to their old jobs, but looking for new opportunities and some are still hesitant to return because of the health risks posed by virus.

Brady said, in addition to Brady's arguments, the number of jobs that are created will be important, referencing a projection the White House gave Congress regarding the number of positions the American Jobs Plan would create.

As of June, the economy was down nearly 700,000 jobs from that goal. In June, the U.S. economy added 850,000 jobs.