Why a blowout jobs number would be bad for Biden – POLITICO

by | Jul 5, 2022 | Jobs

Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.Welcome to jobs week — It’s that time again. The June jobs report due out on Friday is expected to show a decline from May’s very strong 390,000 to closer to 200,000, which would also be a solid number. Wall Street is looking for a “goldilocks” figure in the 200K-300K range to ease rising concerns about an imminent recession without spurring the Federal Reserve into bigger, faster rate hikes.The number takes on added importance as economic data came in decidedly mixed last week. Inflation as measured by the Fed’s favorite indicator, PCE, stayed steady on the headline at a 6.3 percent annual rate while core price increases excluding food and energy slowed to a 4.7 percent rate in May from 4.9 percent in April. But spending adjusted for inflation dipped 0.4 percent, a potentially worrisome sign about consumers’ ability to keep up with an inflation rate still far above the Fed’s long-term target of 2 percent.Manufacturing also came in soft with the ISM report notching its biggest monthly decline since Covid hit, dropping to a two-year low of 53 percent. Anything above 50 means growth, but the latest reading was the worst since June of 2020. A surprisingly soft jobs on Friday number might boost markets by taking pressure off the Fed, but it would add to concern that recession is near.Technically, it may already be here. The U.S. economy shrank by 1.6 percent in the first quarter, according to the latest revised data. And forecasts for the second quarter are for another, perhaps slightly larger, decline. Tha …

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