On The Money: Powell says pickup in job gains likely this fall | Schumer, Pelosi meeting with White House on infrastructure

On The Money: Powell says pickup in job gains likely this fall | Schumer, Pelosi meeting with White House on infrastructure
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THE BIG DEAL—Powell says pickup in job gains likely this fall: Federal Reserve Chairman Jerome Powell told lawmakers Tuesday that the U.S. remains on track for a strong rebound from the coronavirus recession despite several speed bumps that have weighed on the recovery.

Testifying before a special House COVID-19 subcommittee, Powell expressed confidence that rising inflation and lackluster job growth would both turn around as the global economy smoothed out the kinks of reopening.

“I think we'll see strong job creation in the fall. I really do,” Powell said. For now, he said, "there seems to be some kind of a speed limit," pointing to more than 9 million job openings and even more Americans who are unemployed.

"It may just be that it's hard to match up with a new job and people feel like they can wait a little bit longer and really shop carefully,” Powell added. I’ve got more here.

The dynamics: 

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  • His appearance before the subcommittee comes as the Fed is coming under growing pressure from inflation hawks to raise interest rates and halt monthly bond purchases with prices rising sharply from pandemic lows.
  • At the same time, the U.S. has gained an average of 540,000 jobs over the past three months — half the rate Powell and many other economists had expected.

Powell acknowledged that the pace of job gains had plenty of room to rise with millions of Americans out of the labor force. But Republican lawmakers remained unconvinced, insisting that President BidenJoe BidenThe Supreme Court and blind partisanship ended the illusion of independent agencies Missed debt ceiling deadline kicks off high-stakes fight Senate infrastructure talks spill over into rare Sunday session MORE’s extension of jobless benefits and other support measures included in the $1.9 trillion COVID-19 relief bill from March have disincentivized work and overheated the economy.

“These Biden administration inflation policies have put you in a tough spot,” House Minority Whip Steve ScaliseStephen (Steve) Joseph ScaliseRepublican governors revolt against CDC mask guidance House to resume mask mandate after new CDC guidance What you need to know about the new COVID-19 surge MORE (R-La.) told Powell.

LEADING THE DAY

Schumer, Pelosi meeting with White House on infrastructure: Senate Majority Leader Charles SchumerChuck SchumerSenate infrastructure talks spill over into rare Sunday session Senate holds sleepy Saturday session as negotiators finalize infrastructure deal An August ultimatum: No recess until redistricting reform is done MORE (D-N.Y.) and House Speaker Nancy PelosiNancy PelosiOn The Money: Justice Department says Trump's tax returns should be released | Democrats fall short of votes for extending eviction ban House adjourns for recess without passing bill to extend federal eviction ban Photos of the Week: Olympic sabre semi-finals, COVID-19 vigil and a loris MORE (D-Calif.) will meet with White House officials on Wednesday to talk about the path forward on infrastructure.

  • Schumer told Senate Democrats during their closed-door caucus lunch on Tuesday that he and Pelosi will meet with the officials to discuss both a budget resolution that could pave the way for moving a bill through the Senate with just Democratic votes and bipartisan talks, a Senate Democratic source told The Hill.
  • The meeting comes as Democratic leadership is trying to balance the bipartisan talks with a growing push from many within the caucus to cut the cord and move forward on their own with a larger package that could be passed under budgetary rules and avoid a filibuster.

The Hill’s Jordain Carney brings us up to speed here.

The background: The White House is ramping up its outreach as the bipartisan talks reach a make-or-break moment. 

Housing prices rose 23.6 percent annually in May, setting new record: Housing prices rose more than 20 percent in the 12 months leading into May, according to data released Tuesday by the National Association of Realtors (NAR), setting a new annual record.

  • The median sale price for existing homes in May rose 23.6 percent from a year ago, marking a new peak as the COVID-19 pandemic drove a massive increase in housing prices and sales.
  • While existing home sales dropped 0.9 percent between April and May, sales are up 44.6 percent from May 2020. 
  • The inventory of available homes for sale also rose 7 percent last month but is down a staggering 20.6 percent from May 2020.

"Home sales fell moderately in May and are now approaching pre-pandemic activity," said Lawrence Yun, NAR chief economist, in a Tuesday statement. "Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.” I explain here.

ON TAP TOMORROW:

GOOD TO KNOW

  • The IRS on Tuesday rolled out two new web tools related to the child tax credit expansion established by President Biden's coronavirus relief law, as the agency prepares to start monthly advance payments of the credit next month.
  • U.S. companies would likely pay less in income taxes than their foreign competitors if President Biden’s corporate tax increases were enacted, according to a Reuters analysis published Tuesday.
  • Roughly half of U.S. workers are reconsidering their current jobs and are willing to learn new skills to work in a different industry, according to a poll from Prudential Financial released Tuesday.

ODDS AND ENDS

  • Abigail Disney, heiress to the Walt Disney Company, argued Tuesday that the U.S. economy is in an “upside-down structure” in which some people are constantly working “to make ends meet,” while wealthy individuals are “sitting on their rear ends” while “not paying taxes.” 
  • The House Judiciary antitrust subcommittee is coming under pressure to hit the brakes on a legislative package targeting tech giants.