Economy

Christina Romer, chairwoman of the president's Council of Economic Advisers, announced Thursday that she would return to California.

President Obama said on Thursday that he's "confident" the U.S. won't slip into a so-called "double dip" recession.

The president, fresh off a trip to a Ford plant in Chicago to tout manufacturing successes, said that while a great deal of work remains to be done, he was strongly optimistic that the economy wouldn't slide back into a second recession.

"I am confident about that," the president said in an interview on CNBC when asked if thought the U.S. would avoid a double-dip recession.

"I think that we've got a lot of work to do," he added. "There are some trends that we've got to address, particularly in terms of long-term unemployment, and you addressed this earlier."

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The Federal Housing Administration (FHA) is expected to get about a $2.6 billion boost in revenue over five years under legislation cleared Wednesday night by the Senate. 

The measure allows the FHA to increase the statutory cap on its annual premiums from 0.55 percent to 1.55 percent in its single-family program, providing an avenue for much-needed revenue. 

The downturn in the housing market has deteriorated the agency's capital reserve fund, which had holdings of only $3.5 billion through June. That is $6.5 billion less than the same time last year, according to a report released this week.  

Ford Motor Co. will receive a $250 million loan guarantee to finance billions in export sales to Mexico and Canada, President Obama announced today.

The Export-Import Bank's loan guarantee will finance $3.1 billion in export sales of more than 200,000 U.S.-made vehicles, according to a White House statement.

Obama touted the loan during remarks today at a Ford plant in Chicago that is adding 1,200 workers. The plant will be building a new 2011 Explorer, which is expected to be on the list of the exported vehicles.

New claims for unemployment benefits unexpectedly rose last week as employers continued to cut jobs and the economic recovery's pace slowed. 

First-time claims increased by 19,000 to a seasonally adjusted 479,000, for the week ending July 31, the highest since April, as the recovery plods along this summer, the Labor Department said Thursday.

The government's July jobs numbers are expected Friday, and it's likely the unemployment rate rose as more people looked for employment, even though the economy probably added jobs. 

The ADP national employment report on Wednesday showed the job market added 42,000 jobs. That could be even better news for Friday's report, as ADP has underestimated the number of jobs created the past five out of six times. 

RECESS INTERRUPTED — The House will come back Tuesday to pass the $26.1 billion jobs bill with fiscal aid for state and local governments. Senate Democrats plus the two Maine Republicans voted Wednesday to end debate on the package of $10 billion for a fund to stave off teacher cutbacks and $16.1 billion in more Medicaid funding for states. The Senate is expected to pass the package Thursday. The House wasn't planning on coming back until after Labor Day; it will be in pro forma session Monday, and vote on the bill Tuesday. The Hill: http://bit.ly/cur8Wa

Speaker Pelosi's decision was announced via Twitter: @SpeakerPelosi: I will be calling the House back into session early next week to save teachers' jobs and help seniors & children #FMAP http://bit.ly/b03yXz 

Why Twitter? Pelosi spokesman Nadeam Elshami: "We wanted to get the word out quickly on the decision that the House will be voting to keep teachers on the job. The Senate cloture vote was a major topic that was being followed closely on Twitter, the blogs, online news site, newspapers, TV and wires. So that is why we used Twitter, and we e-mailed the news release within minutes." http://bit.ly/buP7XB

House GOP Leader John Boehner's (Ohio) response tweet: It’s official: Dems to call House back on Tuesday to pass more “stimulus” spending, "paid for" with new job-killing tax on U.S. job creators http://bit.ly/bpABFn

Unions pressed for House's return. "A K Street lobbyist said the American Federation of State, County and Municipal Employees (AFSCME) pushed Pelosi to call back the House for the vote. States would have to lay off thousands of teachers if Congress doesn’t approve the money by the end of August."

AFSCME memo circulating K Street. “The House must pass this bill with no changes as soon as possible. ... Please call offices of allies and those who had deficit concerns with the tax extender bill."

Jobs bill paid for with deeper food-stamp cuts than expected. "SNAP benefits face a $11.9 billion rollback starting in April, 2014," reports the Washington Independent's Annie Lowrey. "A family of three can expect their benefits to drop about $50 a month. Never before have congressional policies actually created a month-to-month cut in food stamps." http://bit.ly/9aE4ao

OBAMA ASKS UNIONS TO BACK DEMS — "President Obama on Wednesday asked labor leaders to set aside their disappointments with his administration’s progress so far and rally around Democratic Party candidates ahead of the midterm elections," reports The Hill's Kevin Bogardus. "Speaking before the AFL-CIO’s executive council in Washington, Obama said he understands union members’ frustration over their priorities being stalled in Congress despite Democratic control."

Obama: “You have to remind [union members] that for the next three months, this election is a choice." http://bit.ly/bE2QXq

PRIVATE JOB GROWTH STILL WEAK IN JULY — The private sector added 42,000 jobs last month, which was slightly better than expected, ADP said Wednesday. But the report found "no evidence of acceleration." http://bit.ly/9VuuMJ

Labor Department jobs report is due out Friday. A slight rise in jobless rate expected, from 9.5 percent to 9.6 percent.

And/but... stocks were up Wednesday. WSJ: "Investors were cheered by hints of an improving employment picture, pushing U.S. stocks higher Wednesday ahead of closely-watched official jobs numbers on Friday that could shed light on the durability of the recovery." The Dow was up 44 points, or 0.2 percent. http://bit.ly/bL5Jqf

ALSO UP... THE PRICE OF BREAKFAST — The Economist: "The price of orange juice has also risen recently, probably thanks to bets placed on the likelihood of tropical storms. Coffee prices, which hit a 13-year high, are a result of poor harvests. Taken together, the raw ingredients for breakfast in much of the rich world have increased in price by 25% since the beginning of June." http://bit.ly/agGM2t  (Hat tip: NPR http://n.pr/ahDEDN)

SOCIAL SECURITY AND MEDICARE TRUSTEES REPORT DUE OUT THURSDAY — Projections could shape the fiscal commission debate on entitlements. CBO's report back in March found Social Security will pay out more in benefits this year than it will take in. 

Treasury Secretary Timothy Geithner, Health and Human Services Secretary Kathleen Sebelius, Labor Secretary Hilda Solis and Social Security Commissioner Michael Astrue will release the report at 11 a.m. at Treasury.

GEITHNER, GOP CLASH ON TAX CUTS: WaPo: "Geithner pushed back hard Wednesday against GOP criticism that allowing tax cuts to expire for the wealthiest Americans could harm small businesses. Senate Republicans held a news conference Wednesday afternoon with a trio of small-business owners..." http://bit.ly/c8tVh0

Senate GOP Leader Mitch McConnell (Ky.): "The impact of all this taxation, regulation and, yes, litigation as well, has a deterrent effect on what we all would like to do, and that is to create jobs."

Geithner at the Center for American Progress: "If you actually want to help small businesses get needed tax relief as opposed to using them as a cover for supporting tax cuts for the most well-off, those people should be supporting Senate passage of the Small Business Jobs Act this week."

With the jobs bill and the Kagan nomination still left to do, the Senate isn't likely to get to the small-business bill until after the recess.

Reid sets tax cut debate set for September. The Hill's Alexander Bolton: "That would make tax cuts a front-and-center issue in the days leading up to the midterm election. The debate promises to be contentious, pitting Democrats against Republicans, liberals against centrists and the Senate against the House." http://bit.ly/bo9Qlr

BILLIONAIRES TO POOL MONEY FOR CHARITY — "Forty of the nation's wealthiest American families and individuals have agreed to give away at least half of their fortunes to charity, providing the potential for billions of dollars to be pumped into charitable organizations," The Hill's Vicki Needham writes. "In June, Warren Buffett and Bill and Melinda Gates invited American billionaires to pledge their fortunes within their lifetimes or after their deaths." http://bit.ly/9iGEkR

Also pledged: hotel mogul Barron Hilton, New York Mayor Michael Bloomberg, entertainment executive Barry Diller, Oracle co-founder Larry Ellison, energy tycoon T. Boone Pickens, Ted Turner, David Rockefeller, film director George Lucas and investor Ronald Perelman.

Full list: http://givingpledge.org/#enter

Forty of the nation's wealthiest American families and individuals have agreed to give away at least half of their fortunes to charity, providing the potential for billions of dollars to be pumped into charitable organizations. 

In June, Warren Buffett and Bill and Melinda Gates invited American billionaires to pledge their fortunes within their lifetimes or after their deaths. 

If everyone on the Forbes 400 list of richest Americans followed through and pledged half their net worth to charity, that would amount to $600 billion, according to Fortune magazine.

Many of the 400 already signed up have agreed to give away more than 90 percent of their wealth. 

Gates and Buffett launched "The Giving Pledge" in June after hatching the plan during the course of several dinners where they discussed the effects of the recession on charitable giving. 

Two of the world's richest, Gates and Buffet, are worth a combined nearly $100 billion. 

Rep. Brad Sherman (D-Calif.) wants MFN status revoked until Obama negotiates a “more level playing field between our two nations."

Treasury Secretary Tim Geithner will try out a more political line of attack on Wednesday, whacking Republicans over their economic record.

Geithner will go after the GOP in a speech Wednesday afternoon, joining with President Obama and congressional Democrats in underscoring the differences between their approach and Republicans' approach to the economy.

"In the 1990s, the government put an end to budget deficits, and America enjoyed a period of growth led by the private sector where prosperity was widely shared and job creation was robust," Geithner will say this afternoon during a speech at the Center for American Progress, a liberal think tank. "Over the next decade, Washington tried a new path, running up huge debts, while incomes for most Americans stagnated and job creation was anemic."

Geithner has been giving a number of interviews and making speeches this week to promote the administration's accomplishments on Wall Street reform. But he's also taken a more prominent role in defending President Obama's stewardship of the economy during an election season in which Republicans have targeted the administration on that very issue.

The Treasury secretary said the U.S. is suffering from the damage caused by "misguided policy" that the GOP had sought when they were last in power. He warned of a "false prosperity" that would be fostered by Republicans' plans, which he said would create debt and stifle growth.

Geithner's words are well in line with what Democrats and the president himself have warned in recent weeks, which is that a return to Republican control of Congress in this fall's elections would mean a reversion to past policies.

But Republicans have shot back by blaming Obama and Democrats' policies for running up the deficits. They've argued Democratic lawmakers would raise taxes on small businesses by letting income taxes for top earners spring upward when they expire at the end of the year.

Geithner will take direct aim at that argument in his speech.

“Borrowing to finance tax cuts for the top 2 percent would be a $700 billion fiscal mistake," he'll say. "It’s not the prescription the economy needs right now, and the country can’t afford it.”

The ADP private sector jobs report came in Wednesday slightly better than expected, showing an increase of 42,000 as well as a revision upward from May to June. 

July's increase was the sixth straight month of gains but the increases have only averaged 37,000, with "no evidence of acceleration" as the job market continues to struggle to create jobs, ADP said in a release. 

June numbers were revised up to 19,000 from 13,000, according to today's report. ADP's report doesn't including federal government hiring or firing for the 2010 Census. 

The government's monthly employment numbers for July are due out Friday. 

The ADP report showed that hiring by large employers — those with 500 or more workers — was flat while medium-size businesses added 21,000 workers to their payrolls and small businesses added another 21,000.