America’s employers added a stunning 528,000 jobs last month despite raging inflation and anxiety about a possible recession, restoring all of the positions lost in the coronavirus recession. Unemployment fell to 3.5%, the lowest level since the pandemic struck in early 2020.
There were 130,000 more jobs created in July than there were in June, and the most since February.
The red-hot jobs numbers from the Labor Department on Friday arrive amid a growing consensus that the economy is losing momentum. The U.S. economy shrank in the first two quarters of 2022 — an informal definition of recession. But most economists believe the strong jobs market has kept the economy from slipping into a downturn.
Friday’s surprisingly strong report will undoubtedly intensify the debate over whether America is in a recession or not.
“Recession – what recession?” wrote Brian Coulton, chief economist at Fitch Ratings, after the numbers came out. “The U.S. economy is creating new jobs at an annual rate of 6 million – that’s three times faster than what we normally see historically in a good year. ‘’
Economists had expected only 250,000 new jobs in July.
Friday, August 5, 2022
The "Are we in a recession?" nonsense was ended thunderously in the negative with Friday's spectacular July jobs report.
GDP may have slowed down, but jobs are roaring ahead. Is it possible that Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell might actually know what they are doing?
With the Inflation Reduction Act having gotten past Joe Manchin, this week is Kyrsten Sinema's turn, and as expected, her price is to remove all the tax hikes on billionaires and corporations.
Senator Kyrsten Sinema, Democrat of Arizona, announced on Thursday evening that she would support moving forward with her party’s climate, tax and health care package, clearing the way for a major piece of President Biden’s domestic agenda to move through the Senate in the coming days.
To win Ms. Sinema’s support, Democratic leaders agreed to drop a $14 billion tax increase on some wealthy hedge fund managers and private equity executives that she had opposed, change the structure of a 15 percent minimum tax on corporations, and include drought money to benefit Arizona.
Ms. Sinema said she was ready to move forward with the package, provided that the Senate’s top rules official signed off on it.
Ms. Sinema had been the final holdout on the package after Senator Joe Manchin III, Democrat of West Virginia, struck a deal with top Democrats last week that resurrected a plan that had appeared to have collapsed.
Sinema got her price: preserving tax cuts for the billionaires that fund her, preserving tax cuts for some corporations (manufacturers) and securing billions for Arizona's catastrophic drought, as Phoenix remains the least sustainable city in the US.
Ms. Sinema insisted on the removal of a provision that would have limited the preferential tax treatment of income earned by some wealthy hedge fund managers and private equity executives. Democrats instead added a new 1 percent excise tax that companies would have to pay on the amount of stock that they repurchase, said one Democratic official, who disclosed details of the plan on the condition of anonymity.
That provision, the official said, would ensure that the package still reduces the federal deficit by as much as $300 billion, the same amount Democrats aimed for with the original deal and a key priority for Mr. Manchin.
Democrats also agreed to a request by Ms. Sinema to include billions of dollars to combat droughts, according to officials briefed on the emerging plan, something that is crucial to Arizona as it suffers from a devastating megadrought. They were expected to restructure the 15 percent minimum tax on corporations to make it less burdensome on manufacturers. Earlier this week, business leaders in Arizona appealed directly to Ms. Sinema to simplify that proposal, which was included in part because she had resisted increasing tax rates as part of the plan.
“Manufacturers remain concerned that this bill will stifle new cures and therapies,” Jay Timmons, the president and chief executive of the National Association of Manufacturers, said on Twitter, even while praising the removal of certain tax provisions. He added, “We remain skeptical and will be reviewing the revised legislation carefully.”
Look, this is a win for Dems. It's an "Art of the Possible", "Don't let the Perfect become the enemy of the Good", "Don't ask how the Sausage is made" win.
The new agreement with Sinema includes a new 1 percent excise tax on stock buybacks that will bring in $73 billion, far more than the $14 billion raised by the carried interest provision, according to a Democrat familiar with the deal.
Now if this is true, then this is actually a very good deal. Sinema can certainly keep the Bernie wing of the Democrats happy with that provision, because its a good provision.
Still a long road to go with a test vote on Saturday. Still could fall apart, still could run into issues in the House.