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A red-hot labor market indicates that Fed Chair Jerome Powell could face a more difficult path to bring down prices. | Manuel Balce Ceneta/AP Photo
WOWZA — This morning, we previewed that economists expected the July jobs report to show a slowing pace of job growth in the neighborhood of a quarter-million new hires, which the Biden administration was already pre-spinning as a “transition” to “stable and steady growth.”That’s not what we got. The numbers blew past all expectations, as the U.S. added a rip-roaring 528,000 jobs last month in the biggest leap since February.A couple of notable data points really laid down a marker for how far we’ve come: (1) The country has now made up the entirety of lost employment when the coronavirus pandemic hit in 2020, and (2) the new unemployment rate of 3.5% beats every month since that recession. Economist JUSTIN WOLFERS found that it’s actually the lowest unemployment in half a century. Details from the APAs always with economic data these days, the numbers are cause for both optimism and concern — and perhaps confusion above all.A shockingly robust jobs market is good news for American workers — and makes recession risks look much more remote at the moment. The July data caps a remarkable summertime stretch of positive developments (reconciliation, chips, falling gas prices, etc.) for a Biden White House that was mired in malaise for months.President JOE BIDEN took a victory lap in a statement this morning: “[I]t’s the result of my economic plan to build the economy from the bottom up and middle out. I ran for president to rebuild the middle class – there’s more work to do, but today’s jobs report shows we are making significant progress for working families.”But, but, but: A red-hot labor market indicates that the Fed could face a more difficult path to bring down prices. And with inflation still the principal financial irritant for many Americans, pocketbook relief could be a long way off. Notably, wages jumped 0.5% in July — putting more money in workers’ bank accounts, but also helping keep inflation elevated.“By defying expectations of an economic slowdown, the report will make it harder for the Federal Reserve to dial back the pace of rate increases at its meeting next month,” writes WSJ’s Gabriel Rubin.“Uncomfortably hot jobs report,” said JASON FURMAN. “Not the sweet spot.”BACK ON THE TRAIL — Pennsylvania Lt. Gov. JOHN FETTERMAN, whose stroke has kept him largely out of the public eye for months, is finally hitting the trail again in his Democratic Senate campaign, Holly Otterbein scooped. He’ll hold his first in-person event in Erie on Aug. 12.THEY’RE GOING TO WISCONSIN — We knew it was coming, but the RNC today officially voted to hold the 2024 Republican National Convention in Milwaukee. Backstory from the Journal Sentinel’s Bill Glauber on how the city landed itHappy Friday afternoon. Send us your favorite Wisconsin travel spots. Are you a fan of the Mars Cheese Castle in Kenosha?
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THE WHITE HOUSEPOTUS ON THE ROAD — Biden and first lady JILL BIDEN will travel to eastern Kentucky on Monday in the wake of devastating flooding in the region, the White House announced.PRESIDENTIAL HEALTH UPDATE — Biden is still testing positive for the coronavirus nearly a week into his rebound case, doctor KEVIN O’CONNOR said in his latest memo. The president’s cough is almost entirely gone, and he’s still feeling good.CONGRESSRECONCILABLE DIFFERENCES — The rapid progress of Democrats’ Inflation Reduction Act has spurred a furious lobbying effort to try to change the bill, stop it or push it to victory, WaPo’s Yeganeh Torbati and Jeff Stein report. The health care and drug pricing provisions are the subject of perhaps the most intense pressure campaigns on both sides. “But one K Street lobbyist, speaking on the condition of anonymity to discuss sensitive talks, said the [tax] opposition among industry groups was muted in part because they had just last year been bracing for multitrillion-dollar tax hikes — rather than the diminished measures that have emerged.”— “What will vote-a-rama be like? It’ll be like hell,” Sen. LINDSEY GRAHAM (R-S.C.) said today, per NBC’s Frank Thorp.— Senate Majority Leader CHUCK SCHUMER said Sen. KYRSTEN SINEMA (D-Ariz.) drew a red line on narrowing the carried interest loophole, refusing to support the bill unless the provision was chucked, per Burgess Everett.— Sen. BERNIE SANDERS (I-Vt.) has grown far less enthusiastic about the much-reduced bill: “You can do something significant with 50 votes,” he tells WaPo’s Tony Romm. “Does this bill do that? No. Might it be better than nothing? Yes.” Sanders sees it as a massive missed opportunity at a time when Democrats control Washington, especially compared to the bill’s major expansion of the social safety net in its 2021 form. And he hasn’t yet committed to voting for this iteration: “I’m taking a hard look … We’re going to have to see.”— The oil and gas industry is skeptical of a compromise Sen. JOE MANCHIN (D-W.Va.) brokered that aims to soften the impact of a methane emissions tax, WSJ’s Katy Stech Ferek and Benoît More …