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The big idea

Biden gets some good news from consumer spending and jobs revisions reports

The pandemic isn’t over — more than 1,000 Americans are dying daily. Things aren’t back to normal — widespread vaccinations haven’t fully smothered the coronavirus. But perhaps, if we trust the latest data on jobs and consumer spending, things are moving toward normal-adjacent.

That’s a term borrowed from Los Angeles real estate. “Beverly Hills adjacent” isn’t in Beverly Hills but it’s … nearby. I’ve been answering “how are you?” with “well-adjacent” for 18 months.

President Biden recently got two clues the American economy may be edging toward normal-adjacent: hungry consumer spending data for October and notable upward revisions to job-creation numbers for most of 2021.

Biden and his Democratic colleagues still face considerable head winds heading into a midterm election cycle in which the party — if history is any guide — risks losing its razor-thin majorities in the House and Senate. Some are economic, like inflation that has throttled real wage growth.

So they’ll take good news where they can

Consumer spending

Let’s start with consumer spending. My colleagues Abha Bhattarai and Aaron Gregg reported Tuesday:

“Americans might say they’re upset about rising prices and losing confidence in the economy, but that hasn’t stopped them from snapping up cars, electronics, sporting equipment and other big-ticket items.

“Retail sales jumped 1.7 percent in October, the Commerce Department reported Tuesday — a significant acceleration from September levels even as new data put consumer confidence at a 10-year low. Walmart and Home Depot clearly benefited from the surge, with both retail behemoths reporting robust third-quarter sales and profits.

“The data highlights a unique economic moment where the country is still in the grip of a pandemic, but the coronavirus and fears surrounding it have receded enough for economic activity to maintain a brisk pace. Even so, the composition of spending remains heavily weighted toward goods instead of services in the run-up to the holidays.”

Let’s reemphasize that last bit: Pandemic fears are largely down, but not down enough that people are thronging to bars, restaurants and hotels. And it’s unclear whether early holiday shopping now might mean less of it in November and December. But inflation doesn’t appear to be denting American spending on gifts, for instance.

As Abha and Aaron report: “All told, Americans spent $638.2 billion in October, a 16 percent increase from last year. And while some of that lift is the result of higher prices, economists say other factors are also at play: Families still have savings from a year in relative quarantine and have gotten a boost in income from policies such as the Child Tax Credit.”

Job growth

Now let’s look at job growth. Last Thursday, I flagged how the October jobs report included significant upward revisions to what had been disappointing figures from August and September, which had been widely read as omens of a stalling economy.

But now, my colleague Andrew Van Dam has done a deep dive into the subject.

“The government sharply underestimated job gains for most of 2021, including four months this summer in which it missed more job growth than at any other time on record.”

“In the most recent four months with revisions, June through September, the Bureau of Labor Statistics (BLS) reported it underestimated job growth by a cumulative 626,000 jobs — that’s the largest underestimate of any other comparable period, going back to 1979. If those revisions were themselves a jobs report, they’d be an absolute blockbuster.”

Here’s Andrew on a part with political salience:

The revisions have recast the narrative of a summer slowdown. In August, when economists expected a strong follow-up to the 943,000 jobs the economy added in July, the BLS announced the U.S. added only 235,000 jobs. Headlines dubbed it a ‘colossal miss’ as job growth took a ‘giant step back.’ Two months later, revisions based on additional data showed August jobs grew by 483,000, more than double the anemic original reading. It was the biggest positive revision in almost four decades.

(As I put it last week: “That’s still well below forecasts of 720,000 and 500,000, but it’s clearly healthier, even if the country is still not back to pre-pandemic trends.”)

Job revisions don’t get the sort of headline treatment the initial monthly figures tend to get. That's especially true when the original numbers outperform expectations or fall well short of them. Its unlikely Biden will see much of a bounce there. And the consumer spending trend that’s grabbing all the attention right now is inflation, notably food and gas prices.

But both phenomena bear watching, if only to try to make sense out of an American economy sending all kinds of seemingly conflicting signals.

What's happening now

Pelosi denounces as ‘outrageous' House GOP leadership's silence on Gosar

Pelosi ramps up rhetoric ahead of censure vote

“It’s an emergency,” House Speaker Nancy Pelosi (D-Calif.) said this morning ahead of a vote to censure Rep. Paul A. Gosar (R-Ariz.) for sharing a violent video aimed at Rep. Alexandria Ocasio-Cortez (D-N.Y.), per Felicia Sonmez, Amy B Wang and Marianna Sotomayor. “It’s violence against women, workplace harassment — really, I think, legal matters in terms of threatening a member and the president of the United States … It’s outrageous on the part of the Republican leadership not to act on this.”

  • The House is expected to vote this afternoon on censuring Gosar and stripping him of his committee assignments.

Biden administration to invest millions in helping poor countries access covid-19 vaccines

“The White House is aiming to spur the production of at least 1 billion doses a year. The funds will support companies that make mRNA vaccines, such as Pfizer and Moderna, by helping them expand their capacity by funding facilities, equipment, staff and training,” reports Tyler Pager.

Biden pushes FTC to crack down on oil companies, alleging industry conduct has pushed gas prices higher

“The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining," Biden wrote FTC Chair Lina Khan in a letter, Jeff Stein and Cat Zakrzewski report. “The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately.”

Rating agencies say Biden’s spending plans will not add to inflationary pressure

“The two pieces of legislation ‘should not have any real material impact on inflation’, William Foster, vice president and senior credit officer (Sovereign Risk) at Moody's Investors Service, told Reuters,” Kanishka Singh reports.

“The impact of the spending packages on the fiscal deficit will be rather small because they will be spread over a relatively long time horizon, Foster added.”

Sen. Amy Klobuchar says first post-cancer exam shows she remains cancer-free

“In a September Medium post, Klobuchar [D-Minn.] said the discovery of ‘small white spots’ during a routine mammogram in February had led her to get a biopsy; she soon learned she had Stage 1A breast cancer. Over the spring, she underwent a lumpectomy and completed a course of radiation treatment,” Amy B Wang reports.

On first Africa trip, Blinken confronts questions of U.S. leverage in multiple deepening crises

“Blinken has deployed sanctions against some Ethiopian officials, hoping it would push them to implement a cease-fire. But the Ethiopian government has dug in its heels, saying that punitive actions against it amount to implicit support for its enemy, which it considers a terrorist organization hellbent on retaking the power it lost when Abiy became Ethiopia’s leader nearly three years ago,” Max Bearak and John Hudson report.

Daughter of South Dakota Gov. Kristi L. Noem to turn in appraiser license amid continuing nepotism scrutiny

“In a letter to the South Dakota Department of Labor, Kassidy Peters, Noem’s daughter, insisted that neither she nor her mother had done anything wrong but said that a legislative inquiry into the matter had ‘successfully destroyed my business,’” John Wagner reports.

Lunchtime reads from The Post

100,000 Americans died of drug overdoses in 12 months during the pandemic

“The people who died — 275 every day — would fill the stadium where the University of Alabama plays football. Together, they equal the population of Roanoke, Va.,” Dan Keating and Lenny Bernstein report.

There are now more overdose deaths from the illegal synthetic opioid fentanyl than there were overdose deaths from any drug in 2016.”

  • “The new figures, which are provisional but rarely change much in final tallies, represent a 28.5 percent increase from the same period a year earlier. The financial, mental health, housing and other difficulties of the covid-19 pandemic are widely blamed for much of the increase.”

The second-biggest program in the Democrats’ spending plan gives billions to the rich

“Over the next five years, raising the SALT cap would provide a tax cut only to those who itemize their taxes and pay more than $10,000 in state and local taxes — a group overwhelmingly made up of the wealthy. A recent analysis from the Tax Policy Center says the tax cut will benefit primarily the top 10 percent of income earners, with almost nothing flowing to middle- and lower-income families,” Alyssa Fowers and Simon Ducroquet report.

  • “The rich are poised to gain more from the SALT cap increase than lower-income people are from other elements of the bill, such as the child tax credit.”

… and beyond

‘This experience broke a lot of people’: Inside State amid the Afghanistan withdrawal

“Interviews with more than half a dozen State Department employees in addition to government officials and advocates, as well as a review of internal administration emails POLITICO obtained through the Freedom of Information Act, reveal the desperation and disorganization that consumed frontline State Department employees. As they feverishly attempted to assist Afghans and Americans stranded in the war-torn country and fielded a crush of calls and emails — the inbox where the State Department directed Afghans to send Special Immigrant Visa applications crashed at least once — officials say they were unclear of their own authorities and what policies they were allowed to employ to help evacuate people. It all triggered mental health issues for some staffers, from which some are still attempting to recover, months later,” Politico’s Natasha Korecki and Nahal Toosi report.

Their stories are a testament to the U.S. government’s lack of preparedness for the cratering security situation, even as President Joe Biden pushed through his decision to withdraw troops from Afghanistan by Aug. 31.”

The Biden agenda

Gas prices equal political pain for Biden

Pain at the pump drives Biden’s suffering in the polls

“Consumer sentiment has plunged in recent weeks as inflation climbed to the highest levels in more than a generation. Those rising prices are especially evident in the gasoline market, where drivers have seen the per gallon price jump to the highest levels in seven years. On top of that, homeowners are bracing for expensive heating bills this winter, with natural gas costs more than twice the year-ago level,” Politico’s Ben Lefebvre reports.

From electric bikes to ‘tree equity,’ Biden’s social policy bill funds niche items

“It includes a $4.1 billion tax break for people who buy electric bicycles, $2.5 billion for ‘tree equity,’ another $2.5 billion to help ‘contingency fee’ lawyers recoup their expenses and a long-sought tax break for producers of sound recordings,” the NYT’s Jonathan Weisman reports.

6th Circuit Court ‘wins’ lottery to hear lawsuits against Biden’s vaccine rule

“The 6th Circuit Court of Appeals, based in Cincinnati, Ohio, is known to lean conservative, with most of its judges appointed by Republican presidents,” NPR’s Andrea Hsu reports.

“It will now be up to the 6th Circuit to decide whether to lift the stay issued by the 5th Circuit. A three-judge panel temporarily blocked the OSHA rule one day after it took effect and reaffirmed that decision last Friday, calling the rule ‘a one-size-fits-all sledgehammer that makes hardly any attempt to account for differences in workplaces (and workers).’”

State and local tax deduction cap, visualized

“Over the next five years, raising the State and local tax deduction (SALT) cap would provide a tax cut only to those who itemize their taxes and pay more than $10,000 in state and local taxes — a group overwhelmingly made up of the wealthy. A recent analysis from the Tax Policy Center says the tax cut will benefit primarily the top 10 percent of income earners, with almost nothing flowing to middle- and lower-income families.”

Hot on the left

Dayen: The Astroworld tragedy is a story of corporate power

“Live Nation is the dominant event promoter in the United States, with a dangerous record on public safety. These two things are connected,” the American Prospect’s Executive Editor David Dayen writes.

“This is a vertically integrated operation, where Live Nation often manages the artist, runs the venue, sells the tickets, and promotes the concert all at once. Now, ask yourself just how much emphasis the company really needs to put on safety, given its dominance of the industry. If there’s a tragedy, will they credibly lose any market share? Will Ticketmaster no longer be the broker for that tour? Will the venue no longer work with Live Nation acts? There’s simply no possibility of disciplining Live Nation from a market forces standpoint for skimping on safety.

Hot on the right

Friedman: Want to save the Earth? We need a lot more Elon Musks.

“We will not decarbonize the global economy with a lowest-common-denominator action plan of 195 countries. Not possible,” the New York Times's Thomas L. Friedman writes.

“We will get there only when Father Profit and risk-taking entrepreneurs produce transformative technologies that enable ordinary people to have extraordinary impacts on our climate without sacrificing much — by just being good consumers of these new technologies.”

“In short: we need a few more Greta Thunbergs and a lot more Elon Musks. That is, more risk-taking innovators converting basic science into tools yet to be imagined to protect the planet for a generation yet to be born.”

Today in Washington

At 3:05 p.m., Biden will visit a General Motors factory in Detroit, where he will deliver remarks at 4:30 p.m.

In closing

So true.

Thanks for reading. See you tomorrow.