Happy Friday! As House Republicans work to figure out who they want to succeed deposed Speaker Kevin McCarthy, they briefly planned a televised Fox News forum next week with three top contenders for the job, Reps. Steve Scalise, Jim Jordan and Kevin Hern. But the plan, labeled a “joint interview” rather than a debate, drew a backlash from House Republicans and the candidates backed out. “We need to make this decision as a conference, not on TV,” Hern wrote on social media. “The Republican conference needs a family discussion.”
That family discussion should make for another wild and historic week starting on Monday, and we'll be back in your inbox on Tuesday. Until then, here’s what you should know.
September's Jobs Report Was Stunningly Strong
The U.S. economy added 336,000 jobs in September, stunningly strong gains that roughly doubled economists’ forecasts.
The blockbuster number, released Friday by the Bureau of Labor Statistics, reflects the continued — and somewhat surprising — resilience of the job market in the face of efforts by the Federal Reserve to cool the economy and rein in inflation.
In fact, September’s gains topped the average monthly increase of 267,000 over the prior 12 months. The new report marks 33 straight months of job gains, and the increases from July and August were revised higher by 119,000, providing further evidence that the labor market remains hot.
The unemployment rate held steady at 3.8%, and the labor force participation rate was also unchanged, at 62.8%.
Average hourly earnings also remained stable— up 0.2% in September, the same as the previous month. That may help ease the Fed’s concerns that a tight labor market could drive up wages and contribute to inflationary pressures. Over the past 12 months, average hourly earnings have risen 4.2%, a slightly faster pace than inflation, which stood at 3.7% as of August.
Employers were hiring across a range of sectors last month, but the strongest gains were in leisure and hospitality, which added 96,000 jobs to finally return to pre-pandemic levels. Government employment, meanwhile, rose by 73,000 and prior months’ estimates of government payrolls were raised by 131,000. Healthcare added 41,000 jobs.
President Joe Biden hailed the new data as an indication that his economic plan is working. In a speech from the White House, Biden noted that the economy has added 13.9 million jobs since he took office and the unemployment rate has been below 4% for 20 months in a row, which he said is the longest stretch in 50 years.
“We’re creating good jobs in communities all across the country — including in places that have been left behind for the last, in some cases, 20 years because the factories they used to work at for years and years shut down, leaving them with no options, no jobs in that community — all over the Midwest and all over the Northeast,” Biden said.
Why it matters: The report could provide Fed policymakers more reason to raise interest rates yet again, or to hold rates higher for longer. The 10-year Treasury yield topped 4.88% on Friday, reportedly the highest level since 2007, as investors digested the new data.
Those higher interest rates themselves also act as a drag on the economy in a way that could limit the Fed’s need to tighten. “The bond market is doing heavy lifting for the Fed now,” Diane Swonk, chief economist at KPMG , told Bloomberg News. “That said, the acceleration in growth justifies higher rates and hawks will remain concerned about backsliding on progress made on inflation as they meet in November.”
Other economic indicators will ultimately determine the Fed’s path. “While we’re sticking with our call for rates on hold, if today’s number is followed by hot inflation data the Fed may get pulled into another hike,” J.P.Morgan Chief U.S. Economist Michael Feroli said in a note to clients. “And if that happens the already-tenuous case for avoiding recession next year gets harder to make.”
Quote of the Day
“Quite frankly, I’m sick and tired of Republicans in the House saying they want to cut the deficit when all they really want to do is once again cut taxes for the very wealthy and big corporations, which will only add to the deficit.”
‒ President Joe Biden, in his remarks Friday about the September jobs report and National Manufacturing Day.
Biden also called on House Republicans to avoid further crises and get back to work on funding the government and avoiding a shutdown ahead of a November 17 deadline. “It’s time to stop fooling around,” Biden said. “House Republicans, it’s time for you to do your job — continue our progress growing the economy, investing in America, investing in the American people.”
Asked about the disconnect between the strength of the economy and people’s feeling about it, Biden blamed media negativity in part but also cited the congressional Republican dysfunction on display in the showdown over government funding and the ouster of House Speaker Kevin McCarthy: “If you just watched what happened last week in the Congress, how excited are you going to be about much of anything?”
Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to sign up here for their own copy of this newsletter.
Fiscal News Roundup
- Biden to House Republicans: ‘It’s Time to Stop Fooling Around’ on Funding Government – The Hill
- Trump Endorses Jim Jordan for House Speaker After Kevin McCarthy Ouster – Washington Post
- As Speaker, ‘Fire-Breather’ Jordan Would Have to Become Deal-Maker – Roll Call
- Hakeem Jeffries Pitches Coalition Governing in the House, and Major Changes to the Rules – Politico
- Inside the Bipartisan Deal That Might Have Saved Kevin McCarthy – Politico
- Fed Will Lean Toward Another Rate Hike After Blowout Payrolls – Bloomberg
- Postal Service to Increase Stamp Prices Again in 2024 Due to ‘Inflationary Pressures’ – The Hill
- Inflation Is Transforming Wall Street’s Thinking About Biden’s Economy – Politico
- Kaiser’s Largest US Health-Care Strike Is Latest Blow to Struggling Hospitals – Bloomberg
- How Do Americans Feel About Politics? ‘Disgust Isn’t a Strong Enough Word’ – New York Times
- Presley Highlights Medicaid in Campaign to Unseat Mississippi’s G.O.P. Governor – New York Times
Views and Analysis
- A Bipartisan Coalition Is the Way Forward for the House – Rep. Hakeem Jeffries (D-NY), Washington Post
- Moderates Could Unite Amid House Speaker Chaos. Why Don’t They? – Jacqueline Alemany, Marianna Sotomayor and Leigh Ann Caldwell, Washington Post
- If Moderate Republicans Were Brave, They Could Save the House – Michelle Goldberg, New York Times
- Why McCarthy’s Ties to K Street Helped Bring Him Down – Theodoric Meyer and Leigh Ann Caldwell, Washington Post
- To Tame the Deficit, America Needs a National Sales Tax – Fareed Zakaria, Washington Post
- 3 Milestones From a Stunning Jobs Report – Catherine Rampell, Washington Post
- Bonds Are Still Living in Phillips Curve World. The Fed Isn’t. – Jonathan Levin, Bloomberg
- Time to Go Big on Ukraine Aid – Josh Rudolph, The Hill
- Will Medicare Part B Premiums Go Up Again in 2024? – Joseph Choi, The Hill
- The Kaiser Strike Isn’t Your Typical Labor Action – Craig Spencer, New York Times
- Will Voters Send In the Clowns? – Paul Krugman, New York Times