Update 829: Jobs Gains Up Again in November

December 11, 2024 | Fiscal Policy, Jobs, Nominations, Update, Weekly Round Up | By

Update 829 — Jobs Gains Up Again in November; 
Crypto Friendly SEC Pick among New Trump Noms. 

This morning’s jobs report, showing 227,00 jobs added to the economy and unemployment ticking up to 4.2 percent in November, indicates that the labor market remains strong after labor action and extreme weather led to low job gains in October. Congress has made little progress on the FY25 funding front in recent weeks, with delays and difficulties in negotiations now necessitating another short-term CR in order to avoid a government shutdown on December 20. 

On Wednesday, Trump also announced another round of nominations for economic policy positions, including yet another with a distinctly, and concerningly, crypto-friendly pick for SEC Chair. We cover the aforementioned developments, as well as this week’s HFSC hearing on AI, in the following economic policy roundup. 

Good weekends all…

Best,

Dana

Headline

Higher-Than-Expected 227,000 Jobs Added In November

The new data, included in the November jobs report released by the Bureau of Labor Statistics this morning, shows job gains rebounding after labor action and extreme weather significantly disrupted job gains last month. Total nonfarm payroll employment rose by roughly 227,000 jobs, higher than the expected 214,000 jobs, and the unemployment rate ticked up to 4.2 percent last month

Source: Council of Economic Advisers

Net job growth in October was revised up by 24,000 jobs, from the initial estimate of 12,000 to 36,000 jobs, while the September figure was revised up by 32,000 jobs, from 223,000 to 255,000 jobs. This brings the average monthly jobs gain over the past three months to a strong 173,000 jobs. 

In November, the largest gains came in:

  • health care (54,000 jobs)
  • leisure and hospitality (53,000 jobs)
  • government (33,000 jobs)
  • social assistance (19,000 jobs)

Last month, employment increased by 32,000 in transportation equipment manufacturing reflecting the return of workers who were on strike.

The unemployment rate edged up from 4.1 percent in September and October to 4.2 percent in November. Despite ticking up, the unemployment rate remains historically low. 

Today’s report shows that the labor market remains strong but is cooling as the unemployment report has edged up and the prime-age employment rate fell from 80.9 percent in October to 80.4 percent last month. The November labor market data is a key factor that the Federal Reserve’s interest-rate-setting committee, the Federal Open Market Committee, will be monitoring ahead of its next meeting on December 17 and 18. Last month, the Committee opted to cut interest rates to the 4.5 to 4.75 percent range. With the job market remaining strong, the Committee is expected to cut rates by 25 basis points just as it had at its last meeting. 

Other Developments

Congress Looks to Pass CR Ahead of Dec. 20 Deadline

Following an unproductive few weeks on the government funding front, it is now apparent that Congress will need to pass another short-term continuing resolution (CR) as opposed to full-year funding bills ahead of the expiration of the current FY25 stopgap that expires on December 20, the end of the term. If Congress fails to move on funding legislation before the end of the month, a government shutdown would loom over the holiday season and the 119th Congress’ first days in session.  

While the four corners of Appropriations leadership seemed keen on moving forward with full-year funding bills as recently as two weeks ago, the time crunch and potential opportunities for Republicans brought on by securing a trifecta made it difficult to agree on a timeline and top-line funding numbers. 

According to Speaker of the House Mike Johnson (R-LA), the new CR will likely extend through the end of March, barely avoiding one percent cuts to defense and non-defense discretionary spending if a CR is still in place in April, as mandated under the Fiscal Responsibility Act (FRA). 

There is some measure of bipartisan support for additions to the next CR, including: 

  • a one-year extension of the farm bill and
  • about $100 billion in disaster assistance the Biden administration requested last month to address the damaging effects of Hurricane Helene and Hurricane Milton in addition to other disaster funding needs.

Complicating the latter bipartisan measure are calls from far-right Republicans, namely members of the House Freedom Caucus (HFC), to offset the $100 billion package with reductions in spending. However, this shouldn’t serve as an unexpected barrier to the CR’s passage as many of the same far-right Republicans would likely oppose a CR anyway. 

Legislation for the CR is expected to be released next week, with a vote in the House on the measure likely occurring early in the week of December 16 to give the Senate enough time to pass the package before the deadline.

Road Ahead for FY25 Funding 

Though Republicans will have more control next term after securing the presidency and both chambers of Congress, slim margins will surely limit what they can accomplish when they do turn their attention to full-year bills next spring. They have yet to agree on a top-line funding number for FY25 despite having a previously agreed-upon road map for FY24 and FY25 in the Fiscal Responsibility Act (FRA), and Republicans likely did not pick up enough seats to pass extremely partisan proposals inconsistent will caps set in the FRA. 

Proposals put forth by the Republican-led House Appropriations Committee earlier this year failed to get complete approval from members of the majority’s own party, with some members balking at extremely partisan policy riders – otherwise known as poison pills – and others opposed to the overall size of the bills. With the Republican margin decreasing in the House, they will need close to unanimous approval within the Republican caucus or Democratic votes. It is currently unclear whether Speaker Johnson will risk defections from both right-wing and moderate Republican members of Congress for his planned CR and subsequent full-year funding bills, which could potentially force him to rely on Democratic support to pass the funding legislation as he did last year. 

Noms/Appointments (SEC, IRS, SSA, SBA, DOJ Antitrust)

On Wednesday, the Trump transition team announced additional nominations/appointments with implications for economic policy, selecting leadership for the SEC, IRS, SBA, SSA, and the DOJ’s Antitrust division:

  • Chair of the Securities and Exchange Commission (SEC), Paul Atkins – Trump nominated the CEO and founder of financial services consultancy Patomak Global Partners and former SEC commissioner to chair the SEC for the next four years. Atkins is a strong advocate for crypto and is expected to deregulate financial institutions, a big change after Gensler’s time in the role. Under his leadership, the SEC will likely reverse the efforts to crack down on crypto firms. 
  • Commissioner of the Internal Revenue Service (IRS), Billy Long – Trump’s transition team nominated former member of Congress Billy Long to be Commissioner of the IRS. Long, who has been working as a business and tax advisor since losing a bid for a Senate seat in Missouri, has come under fire for his attempts to encourage companies and nonprofits to claim the Employee Retention Tax Credit (ERTC), a COVID-era incentive that has been rife with fraud in the past few years. Questions surrounding this, as well as his general qualifications for the role, will surely be brought up by Democrats throughout the confirmation process, but it is currently unclear whether these objections will hinder Long’s path to confirmation. The decision by Trump to move on from current Commissioner Danny Werfel – whose term is supposed to extend through 2027 – likely indicates that Trump intends to follow through with his plans to shrink the IRS. 
  • Commissioner of the Social Security Administration (SSA), Frank Bisignano – Trump selected Frank Bisignano to head up the Social Security Administration. Bisignano has limited political experience but was selected by Trump due to his experience in the financial sector. Bisignano, who was formerly COO at JPMorgan Chase and is the current CEO of Fiserv, will be tasked with addressing looming budget shortfalls at the agency. The SSA is currently expected to face insolvency in 2035 resulting in a 25 percent cut to benefits, though Trump campaign proposals could accelerate this timeline. 
  • Administrator of the Small Business Administration (SBA), Kelly Loeffler – Trump announced his selection of former Georgia Senator Kelly Loeffler to head the SBA. Trump has tasked Loeffler with “ensuring that SBA is accountable to Taxpayers by cracking down on waste, fraud, and regulatory overreach,” consistent with the stated goals of his second term. 
  • Assistant Attorney General for the Department of Justice’s Antitrust Division, Gail Slater – Trump nominated Gail Slater, former tech advisor to the National Economic Council and more recently policy advisor to J.D. Vance, to head up the DOJ’s Antitrust Division. In the role, Slater would inherit the Department’s ongoing lawsuits challenging consolidation within Big Tech. Trump has criticized the lack of competition in the industry, but it remains unclear whether Slater would continue the aggressive antitrust approach taken by current Assistant Attorney General for the Department of Justice’s Antitrust Division Jonathan Kanter. 

Hearing

HFSC Hearing on AI 

In what was retiring Rep. Patrick McHenry’s final hearing as Chair of the House Financial Services Committee, the HFSC covered the relationship between the financial sector and emerging technology such as fintech and AI. In a remarkably amicable hearing, Democrats and Republicans stressed the need to balance innovation with adequate guardrails to protect consumers and financial institutions alike. Much of the discussion centered on cryptocurrency and blockchain technology, which is set to become a focal point for the upcoming administration and Congress. 

Industry advocates stressed how blockchain technology and other innovations are changing the face of finance while decrying efforts by the SEC and other regulators to reign them in. Democrats pushed back against this narrative somewhat, especially stressing the need to provide consumers with privacy protections and rights over how their data is used.

Look Ahead

Wednesday, December 11

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