October 12, 2013: Could it be? A shutdown thaw?!
Is Shutdown City, now in its tenth day, showing signs of a political thaw? The scuttlebutt from major media organizations says House Republicans are headed to the White House today to discuss a possible – just a possible – short-term hike to the federal debt ceiling. The government is due to hit its borrowing limit next week, and if it does the economic consequences would be dire.
So: Holy smokes! Does this mean Washington clearing its logjam? Nope, sorry.We’re not there yet. Raising the debt ceiling would be a temporary fix to a pressing problem, but the shutdown would continue apace. Patrick O’Connor, Janet Hook, and Carol E. Lee for the Wall Street Journal (WSJ) report:
Solving an immediate impasse over the debt ceiling wouldn't necessarily resolve the spending fight that has closed the government. Many of the same conservatives who backed a short-term extension of the country's borrowing authority said they are willing to keep parts of the government shuttered in order to keep fighting over the health law.
Well, it’s nice to know that Congress will stave off immediate economic chaos so it can continue grandstanding through a federal budget debate. But while this “manufactured crisis” (to quote the Treasury secretary) drags on, its real, damaging effects simply play out in the wider economy.
Elsewhere around the web:
In the midst of all the political stagnation, President Obama has nominated Janet Yellen to be next chief of the Federal Reserve. Reporting for Reuters, Jeff Mason and Mark Felsenthal say Yellen is expected to continue the policies of current Fed Chair Ben Bernanke. She’s also made clear her focus would be on continuing the Fed's efforts to strengthen the economic recovery and to boost employment. Here’s Yellen in her own words:
While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they'll pay their bills and provide for their families.
The Federal Reserve can help if it does its job effectively.
It’s getting more expensive to do business in China, according to a survey of American executives with operations there, but it’s still plenty profitable. WSJ’s John Bussey sums up the data compiled by the U.S.-China Business Council:
The cost of labor particularly has been rocketing in China, by double digits for many businesses the last few years. That’s prompted some U.S. manufacturing to leave China for other shores – including the U.S. and Mexico. …
Overall, though, sentiment hasn’t changed much from the “tempered optimism” of recent years. Companies say that a range of longstanding problems – such as delays in licensing and other market barriers – generally have not improved.
The unemployment rate – the current rate of which we don’t officially know because last month’s jobs report was a casualty of the government shutdown – is likely worse than its most recent 7.3 percent. That’s the finding of the Economic Policy Institute, which points out that many of the unemployed have given up looking for work in a weak job market: “Because jobless workers are only counted as unemployed if they are actively seeking work, these missing workers are not reflected in the unemployment rate.” Emphasis added.
Okay. So how many workers in this weak job market are going unreported? The EPI estimates there are nearly five million of them. If we count them as well, the official jobless rate would be closer to 10 percent.
Speaking of that missing jobs report: Because the monthly government update on America’s employment situation was considered nonessential, the Alliance for American Manufacturing (AAM) has issued its own. We asked our supporters across the nation to send in a jobs report as they saw it from their communities, and the results painted a picture of the American economy that the usual data dump can’t.
So no jobs report? No problem. Help us tell the jobs story that Washington won’t. Have you – or your friends, family, or neighbors – started looking for work recently? Have you stopped? Send in the jobs report from your town to info [at] aamfg [dot] org, tweet it to us at @KeepitMadeinUSA, or contact us via Facebook. And read the report right here.
Happy Thursday, America.
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