Job Market Ends the Year With a Bang

Pljus: Speaker Mike Johnson ponders his border play ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey President Joe Biden today gave his first campaign speech of 2024, warning that former president Donald Trump represents a threat to democracy. A day before the third anniversary of the January 6 insurrection, Biden visited Valley Forge, Pennsylvania, before delivering remarks recalling how George Washington spoke to his Revolutionary War army in 1777 about the “sacred cause” of democracy. “Today, we’re here to answer the most important of questions: Is democracy still America’s sacred cause?” Biden asked, saying, “It’s what the 2024 election is all about.” Trump responded by saying Biden’s record is one of “weakness, incompetence, corruption and failure” — and by mocking Biden for stuttering. Here’s what else is happening. Speaker Mike Johnson (Sipa USA) Border Talks Continue as Shutdown Deadline Nears Senate negotiators working on a bipartisan deal pairing border security measures with aid to Ukraine and Israel are hoping to have a framework prepared and be able to brief their colleagues about it when lawmakers return to the Capitol next week. But as those talks continue, House Speaker Mike Johnson reportedly may seek to directly negotiate border policy changes with the White House given concern among his members that any bipartisan immigration reform still being worked out in the Senate won’t meet their demands. Sen. Kyrsten Sinema, the Arizona independent who has been involved in the Senate talks, told reporters Friday that she had also spoken with Johnson. “You’ve got to get a bill through both chambers to get it signed by the president,” Sinema said, according to [Politico](. “So we're working very hard to ensure that this is a bill that can pass both the Senate, the House and get signed by the president.” But the White House downplayed the possibility of engaging in direct talks with the speaker, calling the idea “not serious.” “The last I checked, congressional leaders are having talks,” White House Budget Director Shalanda Young said at a breakfast hosted by the Christian Science Monitor. “There’ve been talks for weeks with Senator Murphy, Senator Sinema, Senator Lankford. I know where the speaker’s suite is — it’s right next to the Senate. So it’s a long trip down to the White House to do something that could be done right next door. The White House has been involved in those. … I’m sure no one’s gonna tell the speaker if he wants to be involved in that, that he can’t be involved in that.” As the Senate talks have continued, Johnson has previously called for Democrats to accept the more restrictive provisions in the border bill passed by House Republicans, known as H.R. 2. Democrats have dismissed such demands as non-starters that could scuttle the chance for a deal. In turn, some hardline conservatives have responded this week by saying that they’d favor shutting down the government if the Biden administration and Democrats don’t meet their demands. “We want to get the border closed and secured, first; and we want to make sure that we reduce nondefense discretionary spending. That is an important objective,” Johnson told reporters during a visit Wednesday to the Texas border. Highlighting the heated debate going on, Johnson’s deputy chief of staff for communications, Raj Shah, also released a [memo]( Friday charging the White House with using “previously debunked talking points to mislead the public about Republicans’ record and position on border security funding.” Shah was pushing back on White House claims that House Republicans had voted to eliminate over 2,000 Border Patrol agents and linked to fact checks that found the claim [false]( or [mostly false]( because it was based on a GOP bill that called for deep but unspecified spending cuts. Shah also criticized the Biden administration’s request for nearly $14 billion in supplemental border security funding, calling it “little more than misdirection and false advertising that would do little to secure the border.” Shah said that less than 17% of the money would go to Border Patrol operations and that the administration’s plan would do little to stem the flow of migrants entering the country illegally. “From the start of President Biden’s term,” Shah wrote, “his Administration has implemented policies that have undermined security and created a humanitarian crisis at the Southern border. Now, in a desperate attempt to shift blame for a crisis their policies have induced, they have argued it’s a funding problem.” The White House stood by its claims, with Young telling reporters that when Republicans say they want to cut non-defense discretionary spending, homeland security is included in that. Shutdown deadline looming: With just over two weeks to go before a January 19 deadline to fund portions of the government, Johnson and Senate Majority Leader Chuck Schumer are also negotiating overall spending levels for fiscal year 2024. Young on Friday argued that Republicans should stick to the deal they cut months ago. “We have to remind people this budget agreement was not a handshake, it was a vote of Congress. It is not optional. They have to keep their word and live by the numbers that were agreed to by – 70% of the House Republican caucus voted for the debt deal, 76% of Democrats voted for that deal, and that is the only way to get appropriations deals without the threat of shutdown.” But Young said she’s not particularly hopeful that a shutdown can be avoided. “I’m typically optimistic,” she said. “Don’t mark me down as optimistic this morning, especially after some of the remarks I’ve seen over the last couple of days.” The Job Market Ended 2023 With a Bang U.S. employers added 216,000 jobs in the final month of 2023, the Labor Department reported Friday, capping off an extraordinary year of growth that defied the expectations of many forecasters. The economy added 2.7 million jobs overall in 2023, and 167 million people were employed at the end of the year — a record high. The unemployment rate stayed steady at 3.7% in December — the 23rd month in a row below 4% — and the average jobless rate for the year came in at 3.6%. Wages rose at a sold clip, too, with average hourly pay up 4.1% in December compared to a year earlier. That increase, though, could be troubling for the central bankers at the Federal Reserve as they contemplate potential interest rate cuts in 2024. Stronger-than-expected wage growth could push Fed officials to keep rates at peak levels for longer as they try to ensure that inflation continues its downward trend. Signs of cooling: At the same time, there were some indications of potential weakness in the report. Job growth in the previous two months was revised downward by 71,000, and December’s employment increase was concentrated in just a handful of industries, led by government (+52,000). In the final three months of the year, private companies added just 115,000 jobs per month on average, the weakest three-month average since the middle of 2020, when firms were still laying off workers due to the pandemic. And the labor force shrank by 676,000, pushing the labor force participation rate down to 62.5%, the lowest reading since February. Taken as a whole, the December report indicates persistent resilience in the labor market, even as it continues to downshift from the period immediately following the post-pandemic reopening of the economy. “A gradual labor market cooldown remains in place," said Scott Anderson, chief U.S. economist at BMO Capital Markets, per [Reuters](. “However, the lingering labor market resilience and strength in wage growth could keep the Fed on the sidelines for longer than the markets currently expect.” Yellen celebrates ‘soft landing’: Treasury Secretary Janet Yellen said Friday that U.S. policymakers are succeeding in their effort to reduce inflation without pushing the economy into a recession and causing major job losses. “What we’re seeing now I think we can describe as a soft landing, and my hope is that it will continue,” Yellen told [CNN](. “The path the labor market and economy and inflation have followed suggests they’ve made a set of good decisions,” she added. Yellen took a shot at the experts who have argued that a soft landing was highly unlikely and perhaps impossible. “There has been a lot of pessimism about the economy that’s really proven unwarranted,” Yellen said. “A year ago, most forecasters believe we would fall into a recession. Obviously, that hasn’t happened.” Analysts at Bank of America Global Research also had an optimistic take on the latest jobs data. “The December employment report continued to show a gradual cooling in the labor market that is more consistent with a soft landing than a recession,” they wrote in a research note Friday. “We think the overall tone of the report — despite the beat in headline payrolls — is supportive of the Fed's view that the labor market is coming into better balance.” Number of the Day: 650,000 About 650,000 people in the U.S. were sleeping on the streets or in shelters in December, according to an annual count of the homeless. It’s the highest number recorded since the count began in 2007, according to former Housing and Urban Development Secretary Shaun Donovan, who wrote about the issue at [The Hill]( on Friday. Donovan argued that we know how to reduce homelessness but have simply stopped doing so in a comprehensive and coordinated way. “[I]n some quarters, we’re seeing lawmakers threaten to withdraw support from housing first programs, baffling considering the merits,” Donovan wrote. “On top of that, we’re seeing growing support for encampment sweeps and the criminalization of homelessness — kicking people off park benches and writing tickets for sleeping in bus shelters — without providing alternatives. Pushing people out of a public park may remove them from public view, but it doesn’t solve the problem.” Instead, Donovan called for a return to the policies – including rent subsidies, enhanced social services and housing construction – that were put in place following the Great Recession of 2008-2009, when homelessness was reduced. “We’ve done it before,” he wrote. “We know what works.” --------------------------------------------------------------- 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's Budget Director Rejects Johnson's Pitch for New Border Talks: 'That Is Not Serious']( – Politico - [Speaker Johnson Weighs Talks With Biden on Border as Senate Stalls]( – Bloomberg - [Johnson Gets Direct Channel With Senate Border Negotiators]( – Politico - [Border Dispute Could Force Partial Government Shutdown]( – Washington Post - [5 Things to Know About the Border Bill at the Heart of GOP Shutdown Threats]( – The Hill - [Johnson's New Problem: Growing House GOP Interest in a Shutdown Fight Over the Border]( – Politico - [White House Says Johnson Border Memo Proves They ‘Struck Nerve’ With House Republicans]( – The Messenger - [Surprise Jobs Data Gives Boost to Biden]( – The Hill - [Yellen Declares US Economy Has Achieved Soft Landing]( – Bloomberg - [FDA Gives Florida Green Light to Import Drugs in Bulk From Canada]( – CBS News - [Treasury: Nearly 9,000 Auto Dealers Have Registered for Electric Vehicle Tax Credit]( – The Hill Views and Analysis - [The FDA Just Cleared the Way for Drug Importation. What Now?]( – Lauren Gardner, David Lim, Megan R. Wilson and Megan Messerly, Politico - [Republicans Don’t Want to Win an Immigration Policy Fight]( – David Dayen, American Prospect - [America Spreads the Wealth — and Redistributes It, Too]( – Tyler Cowen, Bloomberg - [Coming Rate Cuts Portend a 1980s-Style Economic Resurgence]( – Conor Sen, Bloomberg - [A Factory in Maine Proves ‘Made in America’ Is Still Possible]( – Rachel Slade, New York Times - [Public Pharma’s Biggest Barrier]( – Audrey Stienon, American Prospect - [The Sting in Biden’s Green Loans Is Their Success]( – Liam Denning, Bloomberg - [Whiplashed Bond Traders Are Still Missing the Point]( – Jonathan Levin, Bloomberg Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? 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