For Biden, strong October jobs report arrived just in time

From: POLITICO's Morning Money - Monday Nov 08,2021 01:02 pm

Nov 08, 2021

By Kate Davidson and Aubree Eliza Weaver

Presented by Ripple

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Quick Fix

Every employment report is important when you’re still in the midst of a pandemic.

But heading into Jobs Day last Friday, October’s numbers felt especially pivotal for the Biden administration. The Delta wave had crested and economic activity had picked up, yet supply chain disruptions and price pressures loomed large as the Federal Reserve announced plans to pull back support for the economy.

Congress was closer to its elusive goal of passing a bipartisan infrastructure bill, but Republicans were ready with a message to send far and wide about a weak jobs report: President Joe Biden can’t deliver on his economic promises.

The news was unambiguously good. Employers added 531,000 new jobs last month , and an additional 235,000 more in August and September than initially estimated. The gains were broad-based, with nearly a third of new jobs coming from leisure and hospitality.

The employment ratio edged up as more prime-age workers — those age 25 to 54 — found jobs, helping to push the jobless rate down to 4.6 percent. Before the president’s $1.9 trillion Covid relief package was enacted in March, the Congressional Budget Office estimated it would take until the end of 2023 to hit that threshold.

A win for the full employment crowd: White House officials, who have made a priority of getting workers back into the labor force as quickly as possible, touted the report as evidence that the president’s agenda is working.

“Remember—every single Republican voted against the Rescue Plan,” Bharat Ramamurti, deputy director of the president’s National Economic Council, said on Twitter Friday , referring to the pandemic relief bill. “If they had gotten their way: no checks in pockets, no money for schools to reopen quickly and safely, no quick recovery to 4.6% unemployment.”

Ramamurti pointed to Biden’s remarks in May that the White House’s goal was to give workers more leverage to demand higher pay and better working conditions. In the same tweet, he also highlighted a Wall Street Journal story on how companies are easing certain job requirements in a bid to attract more job candidates.

Mission accomplished? The labor market still has a way to go. Not everyone is seeing the same progress. (For example, the unemployment rate for Black workers is nearly twice the rate for white workers, and the rate for Black men actually increased in October.) The labor-force participation rate has been stuck around 61.6 percent since April. The U.S. is still more than 4 million jobs short of its pre-pandemic level, and at the current pace of job creation, could take another year to close the gap.

Meanwhile, one of the biggest benefits of a tighter labor market — higher wages — is being undercut by rising inflation. In the 12 months that ended in September, wages and salaries rose 4.2 percent, as measured by the Labor Department’s employment cost index, but consumer prices during the same period increased by 5.4 percent.

Friday’s jobs report showed year-over-year wage growth accelerated in October. We’ll see how that measures up to inflation when we get new monthly consumer price data on Wednesday.

And of course, it’s just one month of jobs data. Continued progress ultimately depends on the virus, and we are still in a pandemic and headed into the winter months.

Going forward, the White House’s biggest hurdle may be convincing more Americans that they are better off at a time when many have turned pessimistic about the economy.

IT’S MONDAY — Crank up your Fed-speak translators, we’ve got a slew of central bank officials set to deliver public remarks this week. And since we’re all still waiting, I ask you again: Are you in touch with the White House about the Fed chair nomination? Do you know when Biden may announce his pick? Are you LEANDRA ENGLISH, chief of staff for the National Economic Council?

If so, we want to hear from you! Email us at kdavidson@politico.com or aweaver@politico.com, or reach out on Twitter: @katedavidson.

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DRIVING THE WEEK

World Bank President David Malpass speaks Monday at a Center for Strategic and International Studies discussion on the bank’s goals in a post-Covid world … National Association for Business Economics hosts its fifth Tech Economics conference on Monday and Tuesday … American Institute of Certified Public Accountants and SIFMA hold their national conference on the securities industry Monday through Wednesday.

Labor Department releases October consumer price data on Wednesday … Foreign Policy and Square Inc. hold a discussion on “Crypto’s Impact on Global Finance” on Wednesday … American Enterprise Institute holds a “monetary policy and the ‘everything’ asset price bubble” on Friday … Fed releases job openings and labor turnover survey on Friday.

FED SPEAK ROUNDUP—

— Fed Chair Jerome Powell speaks Monday at 10:30 a.m. at the Fed’s gender and the economy conference, and Tuesday at 9 a.m. at a joint conference hosted by the Fed, Bank of England, Bank of Canada and European Central Bank on diversity and inclusion in economics.

—Fed Vice Chair Richard Clarida speaks Monday at 9 a.m. on a panel with former Fed Chair Ben Bernanke and former New York Fed President Bill Dudley at the Brookings Institution.

—Fed Governor Michelle Bowman speaks Monday at noon on housing policy.

—Fed regional bank presidents: Philadelphia’s Patrick Harker and Chicago’s Charles Evans speak Monday; San Francisco’s Mary Daly and Minneapolis’s Neel Kashkari speak Tuesday; New York’s John Williams speaks Friday.

DON’T MISS CONGRESS MINUTES: Need to follow the action on Capitol Hill blow-by-blow? Check out Minutes, POLITICO’s new platform that delivers the latest exclusives, twists and much more in real time. Get it on your desktop or download the POLITICO mobile app for iOS or Android. CHECK OUT CONGRESS MINUTES HERE.

INFRASTRUCTURE BILL CROSSES FINISH LINE — From our colleague Nicholas Wu: “Its House passage followed intense maneuvering from Democratic leaders to push past progressives who were insistent on pairing the infrastructure measure with a separate, more progressive party-line social spending bill.”

—More from our colleagues Heather Caygle, Sarah Ferris, Nicholas Wu and Olivia Beavers on how Democrats “broke a monthslong fever that has imperiled their entire domestic agenda, thanks to a truce from moderates and liberals brokered to advance more than $2 trillion in party priorities.”

SEC APPROVES AUDIT RULES AIMED AT CHINA — From our Kellie Mejdrich: “The SEC on Friday said it approved rules designed to ensure that regulators have access to audits of foreign companies that sell shares in the U.S. The rules the SEC blessed on Thursday came from the Public Company Accounting Oversight Board, the nation's accounting watchdog, as it implemented a law Congress passed last year to crack down on China.”

GOT MILK? YES, THE U.S. HAS TOO MUCH — A certain part of the Twittersphere was absorbed last Friday with a debate over the price of milk, thanks to one family’s concern about rising prices at their local grocery store. Our Meredith Lee reports that while food prices generally are up, “average U.S. milk prices aren’t skyrocketing — they’ve basically stayed the same since January.”

FEDERAL COURT BLOCKS BIDEN VACCINE MANDATE — From our colleague Rebecca Rainey: “A federal court in Louisiana has blocked the Biden administration's mandate that millions of workers get vaccinated against Covid-19 or be tested weekly, ruling in a suit filed by several states, companies and conservative religious groups.”

U.S. LAWMAKERS, CHINESE DIPLOMATS, SIZE EACH OTHER UP AT COP26 — From our colleague Zack Colman in Glasgow, Scotland: “A group of U.S. lawmakers said it received a blunt message from the Chinese delegation at the international climate summit on Saturday: The U.S. has not kept up its promises to the world to fight climate change.”

FED WATCH: Brainard visits the White House, too — MM readers will remember WSJ’s Nick Timiraos reported that Powell was spotted at the White House Thursday. Turns out Fed Governor Lael Brainard was there the same day, Bloomberg’s Jennifer Jacobs, Josh Wingrove and Nancy Cook report, citing people familiar.

Brainard, an Obama appointee who has served on the Fed board since 2014, is seen as the most likely successor to Powell if Biden decides to replace him. The president said last week he intends to announce his central bank picks “fairly quickly.”

—Would markets bat an eye if Brainard is the pick? Reuters columnist Jamie McGeever says no.

FIRST LOOK: PETERSON FISCAL POLICY PAPERS — The Peter G. Peterson Foundation is releasing a series of papers today by some of the top economists and analysts in the fiscal policy space, on the left and right, looking at challenges facing the U.S. economy in the wake of the pandemic.

The authors include Hamilton Project director Wendy Edelberg, Brookings senior fellow Bill Gale, Northwestern’s Kellogg School of Management professor Zhengyang Jiang, National Bureau of Economic Research President James Poterba, Manhattan Institute senior fellow Brian Riedl, George Mason University professor Sita Slavov, Evenflow Macro’s Marc Sumerlin, Grant Thornton economist Diane Swonk, the Conference Board’s Dana Peterson and Lori Esposito Murray, and Jason Fichtner and Shai Akabas of the Bipartisan Policy Center.

Jobs Report

Nicole Creola Kelly, a senior special counsel in the SEC’s general counsel office, has been appointed its new whistleblower program chief, WSJ’s Mengi Sunsi reports.

Anne DeCesaro is now policy director for the House Select Committee on Economic Disparity and Fairness in Growth. She most recently was director of policy and regulatory coordination for food, nutrition and consumer services at USDA. (h/t Daniel Lippman)

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Fly Around

THE ECONOMIC REBOUND FROM COVID WAS EASY. NOW COMES THE HARD PART — WSJ’s Tom Fairless, Mike Cherney and David Harrison: “The global economy’s comeback from last year’s deep contraction is approaching a delicate juncture, as policy makers and executives grapple with the bumpy transition from the post-pandemic reopening to a more normalized pace of growth.”

INVESTORS LOOK TO DIVERSIFY AMID BIG TECH RALLY — Reuters’ David Randall: “Rising valuations and hefty year-to-date gains for big technology stocks are pushing some investors to diversify away from the sector that has led markets for years. Tech stocks have soared this year, and their big weighting in the S&P 500 has helped push the index to records with a 25.1 percent year-to-date gain in 2021. Some investors are worried the valuations may have ascended into nosebleed territory.”

SMALL RETAILERS ARE LOSING THE SUPPLY CHAIN BATTLE — WaPo’s Abha Bhattarai: “Small retailers and manufacturers, already crushed by large national brands during the pandemic, are being disproportionately walloped by delays, shortages and other supply chain disruptions ahead of the holidays. In many cases, they’re losing out to giants like Walmart and Amazon, which are spending millions to charter their own ships and planes to move merchandise. Independent shop owners, who have no such recourse, say they’re often the last in line for products because manufacturers prioritize larger, more lucrative contracts.”

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