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THE BIG DEAL–Economy adds 128K jobs in October, exceeding expectations: The U.S. added 128,000 jobs in October, according to data released Friday by the Bureau of Labor Statistics (BLS), trouncing expectations even as the economy continues to slow under global pressures and trade tensions.
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The unemployment rate ticked up to 3.6 percent from 3.5 percent in September, while the labor force participation rate was little changed at 63.3 percent.
Economists widely expected an October jobs gain of less than 100,000 workers, largely due to the fallout of the 40-day General Motors strike. The United Auto Workers work stoppage took 42,000 auto workers out of the job market and hindered some GM suppliers, according to BLS, temporarily shrinking the labor pool.
Even so, sharp increases in restaurant and bar employees, social services workers and financial sector hires helped push the job gain well above economist projections. I break it down here.
The big point: The surprisingly strong jobs report helped soothe some fears of a broader economic slowdown after data released Wednesday showed the U.S. economy slowing over the third quarter.
President TrumpDonald John TrumpTrump singles in on ‘Sleepy Joe Biden’ at campaign rally Trump at rally says impeachment an ‘attack on democracy itself’ GOP lawmaker says House impeachment rules vote ‘doesn’t change anything for me’ MORE hailed “a blowout JOBS number” in a Friday tweet, but appeared to conflate revisions to past job reports and the impact of the GM strike with other aspects of the report.
Trump’s dubious claim: In his Friday tweet hailing the report, Trump claimed the “blowout” number was actually a gain of 303,000 jobs.
- BLS revised the August and September job gains up by 95,000 workers, and most of the 42,000 auto manufacturing jobs frozen during the GM strike are likely to resume in time for the November jobs report to be calculated.
- White House spokesman Judd Deere told The Hill in an email that Trump’s figure also included an additional 18,000 GM workers not reflected in the BLS report, and 20,000 temporary Census workers who completed their work in October.
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The economic reality: Economists would not typically consider revisions to past jobs reports or the future return of striking workers to be part of a different month’s job gain. Accounting for the loss of 20,000 Census workers would double-count the initial addition of those workers to past jobs reports, as well.
In other words, Trump’s figure depends on double-counting jobs already added to the economy and counting jobs that we gained in past months but didn’t realize until this report.
“Those were wildly inaccurate,” said Joseph Brusuelas, chief U.S. economist at audit and accounting firm RSM. “This is what we’d call ‘fake data.'”
LEADING THE DAY
Warren releases ‘Medicare for All’ plan with no tax hike on middle class: Sen. Elizabeth WarrenElizabeth Ann WarrenOvernight Health Care: Warren unveils ‘Medicare for All’ funding plan | Warren says plan won’t raise middle class taxes | Rivals question claims | Biden camp says plan will hit ‘American workers’ | Trump taps cancer doctor Stephen Hahn for FDA chief O’Rourke ends presidential bid Five things to know about Warren’s ‘Medicare for All’ funding plan MORE (D-Mass.) on Friday released a new plan laying out how she would pay for her “Medicare for All” proposal that would not directly raise taxes on the middle class, responding to pressure and criticism from other Democrats in the presidential race.
The plan is a shift from Warren’s progressive rival in the 2020 primary, Sen. Bernie SandersBernie SandersKrystal Ball: ‘Manchin’s refusal to back Bernie is particularly galling’ Sanders, Ocasio-Cortez to hold climate summit in Iowa Overnight Health Care: Warren unveils ‘Medicare for All’ funding plan | Warren says plan won’t raise middle class taxes | Rivals question claims | Biden camp says plan will hit ‘American workers’ | Trump taps cancer doctor Stephen Hahn for FDA chief MORE (I-Vt.), who has said tax hikes on the middle class will be necessary to help pay for Medicare for All.
“We don’t need to raise taxes on the middle class by one penny to finance Medicare for All,” Warren wrote in a Medium post published Friday. The senator instead recommended new taxes on the rich, corporations and employers, as well as cuts to defense spending.
The Hill’s Naomi Jagoda and Jessie Hellman explain here.
The cost: Warren’s plan, which would cover health care and long-term care for everyone living in the U.S. while eliminating private insurance, would cost an additional $20.5 trillion in new federal spending over ten years.
How it gets paid for:
- $1.4 trillion “[T]hrough existing taxes on the enormous amount of money that will now be returned to individuals’ pockets from moving to a Medicare for All system with virtually no individual spending on health care.”
- $2.3 trillion by tightening and boosting IRS enforcement of tax laws.
- $900 billion through new financial sector taxes.
- $2.9 trillion through new corporate taxes and tax laws.
- $3 trillion through new taxes on the wealthy.
- Warren also said she’d raise revenue through comprehensive immigration reform and by curbing defense spending.
The takeaway: The fact that Warren’s plan won’t raise taxes on the middle class is significant. Other Democrats running for president, who increasingly view Warren as the party’s front-runner, have tried to peg her down on the proposal’s costs and implications for middle class families.
But even though Warren has formulated a plan, much of it relies on Congress passing major legislation that could be extraordinarily difficult to pass even with a Democratic majority in the Senate.
GOOD TO KNOW
- The federal government’s outstanding public debt has surpassed $23 trillion for the first time in history, according to data from the Treasury Department released on Friday.
- Top White House economic adviser Larry KudlowLawrence (Larry) Alan KudlowMORE on Friday said that there has been no discussion of getting rid of Federal Reserve Chairman Jerome Powell despite President Trump’s persistent criticism of his leadership of the central bank.
- U.S. manufacturing contracted for the third straight month in October, according to the Institute for Supply Management (ISM), which collects business data.
- Moody’s Investors Service believes that while the mass forgiveness of student loans would provide a moderate boost to the economy, doing so could also create a “moral hazard” and other long-term risks.
ODDS AND ENDS
- Sen. Ted CruzRafael (Ted) Edward CruzTrump jabs ‘poor bastard’ O’Rourke after he drops out of White House race GOP senators prepared to acknowledge quid pro quo, plan to argue it was legal: report O’Rourke ends presidential bid MORE (R-Texas) on Friday sent a letter to the Trump administration’s top trade official asking him to remove legal liability protections for internet companies from trade agreements.
- A U.S. government committee has launched a national security probe into TikTok, a massively popular video-sharing platform under scrutiny over its ties to China.
RECAP THE WEEK WITH ON THE MONEY
- Monday: Trump wall fight endangers must-pass defense bill | Slumping Halloween sales spook analysts | Survey finds business hiring has fallen | Dems eye tax hikes on corporations, financial transactions
- Tuesday: Fed faces crossroads as it weighs third rate cut | Dem presses Mnuchin on ‘alleged rampant corruption’ | Boeing chief faces anger at hearing | Trouble for House deal on Ex-Im Bank
- Wednesday: Fed cuts rates for third time this year | Hints at pause | Economy holds steady, growing at 1.9 percent | Chile won’t host APEC summit | Move adds uncertainty to US-China trade deal
- Thursday: Senate passes first spending package as shutdown looms | Treasury moves to roll back Obama rules on offshore tax deals | Trade deal talks manage to weather Trump impeachment storm