On The Money: Coronavirus threatens record stretch of job growth | US added 273K jobs in February before outbreak fears | Kudlow floats 'targeted' economic relief | IRS taps new fraud enforcement chief

On The Money: Coronavirus threatens record stretch of job growth | US added 273K jobs in February before outbreak fears | Kudlow floats 'targeted' economic relief | IRS taps new fraud enforcement chief
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Happy Friday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL--Coronavirus outbreak threatens record stretch of job growth: The U.S. economy has added jobs every month for more than 10 years straight, defying expectations with a record stretch of prosperity. But the resilient labor market is facing dire threats from the steadily expanding coronavirus outbreak.

  • With more than 230 confirmed cases of COVID-19 across 21 states, Americans across the country are facing school and office closures, canceled events, social withdrawal and potential shortfalls of vital imports from China and elsewhere.
  • The burgeoning outbreak has plunged financial markets into a correction, induced an emergency Federal Reserve interest rate cut and unleashed a cascade of canceled vacations, conferences and conventions.
  • Economists have dismissed the chance of a quick rebound from efforts to contain the disease -- and have gradually raised the odds of a sharp slowdown ahead of the 2020 election.

I've got more on the outbreak and its threat to the economy here.

 

The danger: Broader spread of the virus could force widespread social withdrawal, dampening the vibrant consumer spending and confidence that underpinned the economy and supported a record-breaking job market for more than a decade.

Economists warn that the stellar pace of recent job gains could slow to dangerous levels if the U.S. is forced to bunker down.

"Once unemployment starts to notch higher, that's when recession becomes a real threat," Moody's Analytics chief economist Mark Zandi told reporters this week, warning of "a self-reinforcing vicious cycle" of layoffs and consumer panic.

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Trump's response: Trump and his top economic adviser, Larry KudlowLawrence (Larry) Alan KudlowMORE, have sought to calm anxiety surrounding the economy and the administration's response to the virus. 

  • A pandemic-driven recession could eviscerate Trump's chances in November, and his team is working hard to bolster consumer confidence ahead of a likely downturn.
  • Kudlow told reporters Friday that the administration would consider "timely and targeted" aid to businesses and workers in industries sensitive to the downturn, rebuking calls for a larger stimulus plan akin to the 2009 bill enacted after the Great Recession.

 

LEADING THE DAY

Economy adds 273K jobs in February, crushing expectations: In any normal world, the economic story of the day would be the U.S continuing to add jobs at a stellar pace.

The U.S. added 273,000 jobs in February, according to data released Friday by the Labor Department, blowing past expectations ahead of a feared coronavirus economic slump.

The unemployment rate ticked down 0.1 percentage points to 3.5 percent, while the labor force participation rate held steady at 63.4 percent. February's job gain comes after an upwardly revised increase of 273,000 jobs in January and 184,000 in December, according to updated figures released Friday.

But the February report was based on surveys conducted the week of Feb. 12, two weeks before the first confirmed case of coronavirus transmitted through community spread raised fears of a downturn. 

 

IRS announces new fraud enforcement director: The IRS this week announced a director to lead the agency's coordination of tax-fraud enforcement efforts.

Damon Rowe, a longtime IRS employee in the agency's criminal investigation division, will lead a new fraud enforcement office starting in mid-March. In his new role, Rowe will be responsible for overseeing the IRS-wide initiatives relating to both criminal and civil tax fraud, and he will be advising key IRS officials across the agency on issues relating to fraud enforcement.

The Hill's Naomi Jagoda has more here.

 

ON TAP NEXT WEEK

Tuesday:

  • Wells Fargo chief executive Charles Scharf testifies before the House Financial Services Committee, 10 a.m.
  • Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger testifies before the Senate Banking Committee, 10 a.m.
  • The House Small Business Committee holds a hearing entitled "The Impact of Coronavirus on America's Small Businesses," 11:30 a.m.

 

Wednesday:

 

Thursday:

  • The Senate Small Business Committee holds a hearing on the coronavirus outbreak's impact on the small business supply chain, 10 a.m.
  • The Senate Budget Committee holds a hearing on the Government Accountability Office's report on the nation's fiscal health, 10:30 a.m.

 

NEXT WEEK'S NEWS, NOW

  • The biggest story next week (and beyond) is the growing number of confirmed coronavirus cases within the U.S. and the toll it takes on the American economy. As the outbreak spreads further, it is likely to cause further disruption and social distancing that can dampen economic activity. The potential toll of the outbreak remains unknown, but economists believe it could take several months to recover from the downturn.
  • Wells Fargo will be back in the political hot seat with back-to-back hearings next week before the House Financial Services Committee. Wells Fargo chief executive Charles Scharf will testify Tuesday on his plans to revamp the scandal-ridden bank, and directors Betsy Duke and James Quigley will testify Wednesday. 

 

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GOOD TO KNOW

 

ODDS AND ENDS

  • The Federal Trade Commission (FTC) this week took action against a skincare and tea company, and sent warning notices to almost a dozen Instagram influencers including singer Cardi B for not making it clear when they posted paid ads for the group. 

 

RECAP THE WEEK WITH ON THE MONEY