On The Money: May jobs report to land at pivotal moment in Biden agenda | Biden, top GOP negotiator agree to continue infrastructure talks Friday

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THE BIG DEAL—May jobs report to land at pivotal moment in Biden agenda: The May jobs report on Friday morning is set to come at a crucial moment for President Biden’s economic agenda.

• A disappointing April gain of 266,000 jobs and higher than expected inflation data this month has fueled criticism from Republicans over Biden’s handling of the economy. 
• With the GOP eager to land a blow against Biden’s sturdy approval ratings, Republicans have seized on the fits and starts of the post-pandemic recovery to derail his massive spending plans.

Biden and Democrats are hopeful that a strong May jobs report can help vindicate their calls for patience of April’s undershoot and clear the path to eventual infrastructure package, with or without Republican support. But another weak jobs gain could spur more backlash and undercut Biden’s spending push as a backlog of other legislative priorities threatens to dominate the congressional calendar. I explain why here.

What to look for on Friday: The consensus among economists is for a gain of 500,000 jobs in May, though many say what lies beneath that headline number is arguably more important.

“It’s going to be a big number by ordinary standards almost regardless. Even the disappointing April number was a pretty big number,” said Douglas Holtz-Eakin, president of the American Action Forum, a right-leaning think tank, and former director of the Congressional Budget Office.

Holtz-Eakin added that continuing improvement in labor force participation, more workers moving from part-time to full-time work, and recovery in hard-hit sectors would all help boost the overall employment gain and the economy’s long-term prospects.

“What I’d like to see is strength across the board, some additional pickup in the service sector but also in the goods sector. And if you get all of those, you’ll get a big number,” he said.

LEADING THE DAY

Biden, top GOP negotiator agree to continue infrastructure talks Friday: President Biden and Sen. Shelley Moore Capito (W.Va.), the lead Republican negotiator on infrastructure talks, met for about an hour at the White House on Wednesday and made plans to speak later this week as the two sides discuss a potential bipartisan agreement. 

The White House described the meeting as a “constructive and frank conversation in the Oval Office about how we can drive economic growth and benefit America’s middle class through investing in our infrastructure” and said that Biden and Capito agreed to reconnect on Friday.

A spokeswoman for Capito said in a statement that the senator is “encouraged that negotiations have continued” and would brief other GOP senators on the discussion with Biden before engaging with him again later this week.

What it means: It’s hard to say. White House press secretary Jen Psaki said at a briefing earlier Wednesday that the meeting would be more of a “discussion” rather than an “exchange of paper,” suggesting that Biden would not give Capito a counteroffer after Republicans unveiled a $928 billion infrastructure counterproposal last week.

Both Biden and Democrats say they’re losing patience with the length of talks and want to move an infrastructure bill by August. Talks can’t produce a deal unless they continue, but talks continuing without actual progress toward a deal only takes up time needed to legislate, and Democrats can’t afford to lose much more.

JBS ransomware attack underscores threat facing meat industry: A ransomware attack that temporarily froze the country’s second biggest producer of beef, pork and poultry upended the national food system this week, highlighting the vulnerabilities in the highly consolidated meat industry.

What happened: 

• Hackers believed to have originated in Russia forced JBS SA to shut down its US operations, cutting off the supplier of roughly 25 percent of beef and 20 percent of pork and poultry.
• JBS is expected to restart packaging at full capacity by the end of Wednesday, reducing the impact of the shutdown to a small but manageable bump to beef and pork prices that were already trending higher.

The long-term: While the short-term impact of the JBS shutdown may be brief, the latest high-profile attack on a private company with a major market share in a critical industry has spurred more concern about consolidation within meatpacking and the threats a longer freeze could pose to the U.S.

“It’s alarming to see another cyberattack against a crucial supply chain,” said Sen. Deb Fischer (R-Neb.) in a statement Tuesday.

“JBS has taken action to resolve this issue. However, the fact that nearly 20% of U.S. meat processing capacity can go offline due [to] a single event could be a hit to Nebraska’s economy, the cattle market as whole, and consumers across America.” I break it down here.

GOOD TO KNOW

• Ally Financial on Wednesday announced that they plan to end overdraft fees, becoming the first large bank to make the move. 
• Businesses across the U.S. scrambled to hire workers in May as a variety of pandemic-related constraints keep potential employees on the sidelines, Federal Reserve officials said in a Wednesday report.
• Stimulus checks sent out by the government during the pandemic significantly helped Americans pay basic bills and reduced their anxiety, according to a new analysis of Census Bureau data.
• United States Trade Representative Katherine Tai on Wednesday announced tariffs on goods from six countries in light of their digital services taxes (DSTs), but said that the tariffs would be suspended for up to 180 days to keep negotiations going.
• President Biden regularly fell on the hawkish side of fiscal debates during his decades-long Senate career, often going a step further than other centrist Democrats in his push to rein in deficits and debt. But since taking office this year at the other end of Pennsylvania Avenue, Biden has taken a largely different approach to government spending.

ODDS AND ENDS

• Trading of AMC Entertainment shares was halted several times on Wednesday after the stock, a favorite among Reddit traders, saw a surge in activity and price.