On The Money — January jobs report may show net job losses

by Sylvan Lane,Aris Folley and Karl Evers-Hillstrom - 02/03/22 6:37 PM ET

Happy Thursday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: digital-staging.thehill.com/newsletter-signup.

Today’s Big Deal: The omicron variant has likely made a mess of the January jobs report. We’ll also look at the latest on the sprint to avert a shutdown, the lobbying frenzy around the technology competitiveness bill and climate-related pressure on one of President Biden’s Federal Reserve picks.

But first, you can take a college class about Taylor Swift.

For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Reach us at slane@digital-staging.thehill.com or @SylvanLane, afolley@digital-staging.thehill.com or @ArisFolley and kevers@digital-staging.thehill.com or @KarlMEvers.

Let’s get to it.

Economists brace for poor jobs report

The record-breaking surge of COVID-19 in January may have caused the first decline in employment since President Biden took office.

The January jobs report, set to be released Friday by the Labor Department, is expected to show the full effect of the omicron coronavirus variant on the economy. Economists are bracing for what they hope is a short-lived setback after a year of steady employment growth.

Experts say the combination of omicron’s unprecedented speed and remarkably poor timing may have caused the first net decline in employment since December 2020.

Spiking coronavirus cases driven by the omicron variant forced millions of Americans to miss work in January and cratered consumer activity in sectors still struggling to recover from the pandemic.
The weekly average of new COVID-19 cases hit a record 806,851 on Jan. 16, according to New York Times data, four days after the Labor Department began conducting surveys for the January jobs report.

While workers who fell sick during the survey period may be back at work already, they may not be counted in the survey of businesses used to calculate the monthly job gain.

The damage: Here’s what Goldman Sachs economists expect to see tomorrow: “We estimate nonfarm payrolls declined by 250k, 400k below consensus of +150k. Our forecast reflects a large and temporary drag from Omicron on the order of 500-1000k, as survey data indicate a surge in absenteeism during the month.”

Sylvan has more here.

ON THE HILL

Biden Fed pick faces GOP fire on climate stances

President Biden’s pick to be the Federal Reserve regulatory chief said Thursday it was “inappropriate” for the central bank to steer business away from fossil fuel companies — despite previously calling on financial regulators to take stronger action to fight climate-related risks in the financial system.

Sarah Bloom Raskin, whom Biden nominated last month to be Fed vice chair of supervision, told senators Thursday the bank should not “pick winners and losers” and focus only on assessing climate-based risks facing banks.

“It is inappropriate for the Fed to make credit decisions and allocations. Banks choose their borrowers, not the Fed,” Raskin told the Senate Banking Committee during her confirmation hearing. She testified beside economics professors Lisa Cook and Phillip Jefferson, who Biden also nominated for two vacant seats on the Fed board.

Raskin, an Obama-era Fed board member and deputy Treasury secretary, would be in charge of the Fed’s supervision and regulation of the banking system if confirmed by the Senate.
While she had received broad Republican support for her previous appointments to the Fed and Treasury, GOP senators have rallied against Raskin’s current bid to join the bank over her previous statements on climate change.

Sylvan and The Hill’s Saul Elbein have more here.

Read more:

GOP senator: $1.5 million private sector payout to Biden nominee ‘doesn’t smell right’
Toomey presses Fed bank on whether Raskin lobbied for special access

NEW YEAR’S RESOLUTION

Top Senate Republican: Congress ‘probably’ headed for third stopgap bill to prevent shutdown

Sen. Richard Shelby (R-Ala.), top ranking Republican on the Senate Appropriations Committee, suggested on Thursday that Congress could have to pass another stopgap bill to keep the government funded after current funding is set to lapse later this month.

Shelby told reporters on Thursday afternoon he thinks Congress is “probably headed” for another continuing resolution (CR), which will allow the government to remain funded at the previous year’s fiscal levels, as a mid-February deadline looms.

Under the continuing resolution passed in early December, the government will remain funded under fiscal year 2021 spending levels through Feb. 18.
The bill’s passage came months after Congress passed another continuing resolution in late September, shortly before fiscal year 2022 began on Oct. 1.

Aris has the latest here.

LOTS OF LOBBYING

Business interests take aim at China competitiveness bill

Business interests are lobbying lawmakers to strip provisions out of a bill aimed at increasing U.S. competitiveness with China that they say could undermine American corporations.

They’re pushing to ensure that several key measures in House Democrats’ proposal, including a government system to review private U.S. investments in China and new tariffs on Chinese shipments, aren’t included in the final package.

The House bill includes far more aggressive trade provisions favored by labor unions and opposed by business groups, which were left out of the bipartisan Senate version passed last year. Both bills include $52 billion in U.S. semiconductor manufacturing.

Differences between the two bills will be ironed out in a conference committee, where business lobbyists aim to help shape the version that goes to Biden’s desk.
Corporate lobbyists want to kill a House provision meant to stop offshoring of key supplies such as military equipment and medical gear to China, which they say would hurt U.S. competitiveness.
They’re targeting another House measure that would subject all Chinese shipments to duty fees and inspection, arguing that it would further drive up inflation and worsen supply chain congestion.

Karl has more on the corporate lobbying push here.

JOBLESS CLAIMS DROP

Weekly jobless claims drop by 23,000

New applications for jobless aid dropped by 23,000 last week, according to figures released by the Labor Department on Thursday.

For the week ending Jan. 29, seasonally adjusted initial claims reached 238,000, the data found. The four-week moving average rose to 255,000 last week, 7,750 more than the revised average from the previous week.

The report marks the second week in a row that jobless claims have fallen after previously rising for several weeks.
Last November, jobless claims dropped to levels not seen since before the onset of the pandemic. But applications for jobless aid made gains in the following weeks, as the omicron variant of COVID-19 fueled a nationwide spike in infections.
Data released by the Census Bureau last month found that millions of people missed work at the start of the year because they, or a person they cared for, came down with the illness.

Aris has more here.

Good to Know

Lawmakers went after federal agencies on Thursday over the tumultuous rollout of 5G technology earlier this year, accusing officials of creating a crisis by failing to communicate over aviation safety concerns.

During a congressional hearing, airline officials warned that the situation is still not resolved and urged regulators to develop a permanent solution that allows for 5G to be widely instituted without risking passenger safety.

Here’s what else we have our eye on:

The Internal Revenue Service (IRS) is shifting 1,200 employees from other duties to help address potential processing delays for 2021 tax refunds and a backlog of 2020 returns as the agency struggles with a number of pandemic-related challenges.
Crude oil prices reached $90 per barrel for the first time since 2014 on Thursday afternoon.
A potential Russian invasion of Ukraine could negatively impact the pocketbooks of average Americans, who are already facing higher prices and rising inflation.