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On The Money: Jobless claims fall to 385,000, nearing pre-pandemic levels | Private sector added 978,000 new jobs in May: ADP

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THE BIG DEAL—Jobless claims fall to 385,000, nearing pre-pandemic levels: New applications for unemployment insurance dropped to 385,000 last week, according to data released Thursday by the Labor Department, setting another post-lockdown low and edging even closer to pre-pandemic levels.

  • In the week ending May 29, initial weekly jobless claims fell by 20,000 from the previous week’s revised total of 405,000 applications. 
  • Last week marked the lowest total of jobless claims since 225,000 applications were filed in the week ending March 14, 2020 — days before the COVID-19 pandemic derailed the economy.

I break it down here.

Rising tide, falling claims: After plateauing during the winter, jobless claims have dropped steadily since the end of April and have trended downward since the beginning of 2021 with a major economic rebound in sight. The U.S. has replaced roughly 8 million of the 21 million jobs lost to the onset of the pandemic and is expected to have added another 500,000 in May. 

ADP surprises: The Labor Department is set to release the monthly jobs report for May tomorrow, but we also got some encouraging private sector data today: The private sector added a whopping 978,000 jobs in May, according to payroll company ADP, well above the 680,000 economists expected and the highest level since last summer.

“Private payrolls showed a marked improvement from recent months and the strongest gain since the early days of the recovery,” said ADP’s chief economist, Nela Richardson. “Companies of all sizes experienced an uptick in job growth, reflecting the improving nature of the pandemic and economy.”

The Hill’s Niv Elis has more here.

 

LEADING THE DAY

JBS attack unlikely to cause major meat disruption: USDA: The Agriculture Department (USDA) said Thursday that the ransomware attack on meat conglomerate JBS SA is unlikely to cause major disruptions but exposed the risks created by food industry consolidation.

  • JBS USA is responsible for 25 percent of beef and 20 percent of pork and poultry sold in the U.S. 
  • The company said Tuesday it expected to regain full production capacity by the end of Thursday.

In a Thursday statement, the USDA said beef and pork production have begun to rebound after a weekend attack forced the country’s second-largest meat producer to shut down its plants. 

“Our daily market data shows a strong rebound in cattle and hog slaughter, which we expect to continue through the week, while poultry numbers are higher this week than last. All in all, the market is moving toward normalization and, if the situation continues to resolve quickly, we don’t expect this incident to have lasting effects on wholesale and retail prices,” the USDA said.

But while the damage from the attack may be limited, the narrow aversion of a potential disaster for the U.S. food system still sent shockwaves across the country.

“The cyberattack on JBS USA underscores the risks of a consolidated food system. If there are lessons to be learned from the COVID-19 pandemic and this latest incident, it is that we need to invest in a food system that is durable, distributed and better equipped to withstand 21st century challenges, including cybersecurity threats and other disruptions,” the USDA said.

 

Biden bars US investment in Chinese companies linked to surveillance: President Biden signed an executive order Thursday to prohibit investments in Chinese defense and surveillance firms that produce or use technology to facilitate human rights abuses, expanding a Trump-era order issued last year.

  • The new order is designed to bar U.S. investments in Chinese companies that produce or deploy surveillance technology used to repress individuals such as Muslim majority Uyghurs in Xinjiang and activists in Hong Kong or others throughout the world.
  • The order lists 59 Chinese firms that are subject to the prohibitions, but the White House said that it would update the list “as appropriate,” meaning more companies could be added to it. 
  • The order takes effect on Aug. 2, approximately two months from the date that Biden signed it.

“This E.O. allows the United States to prohibit – in a targeted and scoped manner – U.S. investments in Chinese companies that undermine the security or democratic values of the United States and our allies,” said a White House fact sheet accompanying the order.

The Hill’s Morgan Chalfant walks us through the order here.

 

GOOD TO KNOW

  • President Biden proposed enforcing a minimum corporate tax of 15 percent as a possible way to fund his infrastructure proposal as he and Republican negotiators make a final push for common ground.
  • A federal court on Thursday sided with Sen. Ted Cruz (R-Texas) in his lawsuit against the Federal Election Commission (FEC), striking down rules limiting how much money candidates can raise after an election to pay off loans.
  • A coalition of progressive lawmakers is calling for electric power to be publicly owned in a new resolution unveiled Thursday.

 

ODDS AND ENDS

  • Walmart announced that it will give 740,000 of its employees smartphones as part of a new app initiative. 
  • Op-Ed: “Pity the central bankers: No easy way to stop rising inflation or bubble-bursting”
Tags Joe Biden Ted Cruz

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