On The Money: Jobs report poised to boost or hinder Biden’s agenda | Jobless claims fall to new pandemic low | 130 countries announce support for global minimum tax
Happy Thursday and welcome back to On The Money, where we blinked and ended up in the second half of 2021. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL — Jobs report poised to boost or hinder Biden’s agenda: President Biden is looking for fireworks in the June jobs report due Friday as the White House makes a renewed push for its economic agenda heading into the long Fourth of July weekend.
A strong employment report could bolster the White House’s efforts to prove Biden’s economic agenda is working as the administration faces pressure over months of lackluster job gains and rising prices.
By the numbers:
- Economists expect the U.S. to have added roughly 700,000 jobs in June, compared with the previous month’s 559,000, bringing the unemployment rate down 0.1 percentage point to 5.7 percent.
- Analysts say a wide range of private sector data measuring payrolls, travel and mobile purchases have shown consumer activity hitting new pandemic highs — all positive signs for the job market.
“There have been really striking improvements, and a lot of high frequency indicators of economic activity point in the direction of increased employer demand for workers,” said Julia Pollak, labor economist at ZipRecruiter.
Even so, economists say the U.S. has not yet been able to declare its independence from COVID-19’s weight on the labor market. I explain why here.
Jobless claims fall closer to pre-pandemic levels, hitting 364K: While jobless claims data is volatile and often skewed by state-level quirks, a decline last week is the latest positive sign of labor market improvement ahead of Friday’s federal jobs report.
- The seasonally adjusted total of initial claims for unemployment insurance fell to 364,000 in the week ending June 26, a decline of 51,000 from the previous week.
- After rising for the first time since April last week, new weekly jobless claims have dropped to their lowest level since March 14, 2020.
LEADING THE DAY
130 countries announce support for global minimum tax: More than 100 countries on Thursday issued a statement in support of an international tax framework that includes a global minimum corporate tax, a top priority for the Biden administration.
The statement from 130 countries participating in the negotiations at the Organization for Economic Cooperation and the Development (OECD) and the Group of 20 (G-20) calls for a global minimum tax rate for corporations of at least 15 percent, the rate proposed by U.S. officials.
- The statement comes ahead of the meeting of the G-20 finance ministers in Venice later this month. Members of the G-20 are expected to announce an agreement on international tax issues at the meeting.
- A wide array of countries signed onto the OECD statement, including China and India, countries thought to have been potential obstacles, but not Ireland, which has a low corporate tax rate.
The timeline: The OECD statement said that a detailed implementation plan would be finalized in October. It could take some time after a plan is finalized for an agreement to be implemented, because countries will need to update their laws and possibly their tax treaties. The Hill’s Naomi Jagoda breaks it down here.
US deficit to hit $3 trillion in 2021, CBO says: The Congressional Budget Office (CBO) on Thursday projected the U.S. deficit to reach $3 trillion in 2021 and average $1 trillion per year over the next decade.
- The new forecast released by the nonpartisan budget scorekeeper for Congress showed the deficit falling $130 billion from 2020 but ending three times higher than the 2019 budget shortfall.
- The deficit will reach its second-highest level since 1945, according to the CBO projections, and equal roughly 13 percent of U.S. gross domestic product.
- CBO also projected GDP to increase by 7.4 percent in 2021 as the economy rebounds from the pandemic-driven recession, but fall to an annual average of 1.6 percent between 2026 and 2031.
I’ve got more here.
GOOD TO KNOW
- New York City prosecutors on Thursday charged the Trump Organization and its chief financial officer, Allen Weisselberg, with various fraud and conspiracy charges.
- Online trading app Robinhood filed for an initial public offering (IPO) on Thursday.
- The congressional debate over the cap on the state and local tax (SALT) deduction is creating unusual combinations of groups advocating for and against repeal of the $10,000 limit.
- The House on Thursday passed a roughly $760 billion proposal to fund transportation and water projects that’s meant to shape parts of the broader infrastructure package — a top priority of President Biden — currently under discussion in the Senate and White House.
ODDS AND ENDS
- The Federal Trade Commission (FTC) on Thursday voted to expand the regulatory agency’s enforcement powers, a signal of Democratic commissioners’ willingness to crack down on alleged anti-competitive behavior.
- GoPuff drivers are publicly calling on the delivery app to improve its treatment of workers for the first time as the company continues to rapidly expand.