Update 911 — Sept. Jobs/Labor Market,
Stock Trading Hrg., Noms. Lead Week
Per yesterday’s Bureau of Labor (BLS) report for September, the U.S. labor market continues to weaken, with unemployment ticking up to 4.4 percent, its highest level since October 2021. Job gains were 119,000 over the month, but gains in previous months saw significant downward revisions. The last such report to be released before the Fed’s interest-rate setting committee meets in December includes data collection and publication disrupted amid the government shutdown.
Meanwhile, on the trade front, the Trump administration announced that it would exempt nearly 250 products from its reciprocal tariffs as voters increasingly call out the administration’s failure to address the rising cost of living. The House Financial Services Committee held a hearing on reforms to the federal deposit insurance framework, and the House Admin Committee considered long-needed proposals to ban Congressional stock trading. Additionally, three of Trump’s nominations moved forward in the Senate.
Good weekends all…
Best,
Dana
Headline
119K Jobs Added in Sept.; Unemployment Up to 4.4%
Total nonfarm payroll employment rose by 119,000 jobs in September, while the nation’s unemployment rate ticked up to 4.4 percent, according to the September jobs report released by the Bureau of Labor Statistics yesterday morning. Job gains in July and August were also revised down significantly, showing that signs of weakening in the labor market, marked by a moderation in job gains and an increase in unemployment, continued into September.
Yesterday’s report includes the first federal government data on job gains and unemployment from the BLS since early September. The report was originally scheduled for release on October 3, but was postponed due to the government shutdown.
Last month, the largest job gains came in health care, which added 43,000 jobs, about the same as the average monthly gain of 42,000 over the prior 12 months. Employment in food services and drinking places rose by 37,000 jobs and employment in social assistance rose by 14,000 jobs.
Jobs were lost in several other industries in September. Employment in transportation and warehousing declined by 25,000 over the month. Federal government employment declined by 3,000 jobs in September and is down by 97,000 since reaching a peak in January.
Net job gains in August were revised down from 22,000 gained to 4,000 jobs lost, while July’s gains were revised down from 79,000 to 72,000 jobs gained. With these revisions, and previously published data on job gains earlier in the year, June and August saw the first net job losses since December 2020.
Yesterday’s report indicates that the labor market has been softening by more than previously estimated over September and the months immediately prior as businesses and consumers adjust to the rapidly shifting economic environment, particularly as the Trump administration’s tariff regime continues to evolve. The rise in the unemployment rate and significant moderation in job gains over the past several months could incline officials on the Fed’s interest rate-setting committee to cut rates once again at their next meeting to boost the weakening labor market, but the strength of job gains in September could incline officials to hold rates steady to prioritize tackling rising inflation. Minutes of the Federal Open Market Committee’s (FOMC) October meeting show that committee officials were divided on their decision to cut rates last month.
Yesterday’s report is the last jobs report FOMC officials will have access to before their next meeting on December 9 and 10. The October jobs report, which was originally scheduled to be published on November 7, will not be released in full since the BLS ceased all active data collection activities for its surveys during the government shutdown, which lasted throughout the month. Partial jobs data for October will instead be released as part of the November report. The November jobs report, which was originally scheduled to be published on December 5, will be published on December 16, a week after the meeting.
Other Developments
Tariff Relief for Selected Food Products
Last Friday, the President announced that some products will receive tariff relief amid growing concerns about affordability and the rising cost of living – issues that contributed to significant Democratic gains in the recent off-year elections. The products that will no longer face reciprocal tariffs include:
- coffee and tea;
- tropical fruits and fruit juices;
- cocoa and spices;
- bananas, oranges, and tomatoes;
- beef; and
- additional fertilizers (some fertilizers have never been subject to the reciprocal tariffs).
President Trump claimed that the nearly 250 products were exempt immediately due to his progress in reaching trade deals, as well as the reality that the United States cannot produce all of these goods.
The tariff relief is a partial walkback of some of Trump’s reciprocal tariffs that were levied beginning in April of this year and perhaps an implicit reckoning with the contradictory nature of raising tariffs and promising lower consumer prices. President Trump has attributed his win in 2024 to his promise to reduce the prices of everyday products. But consumers have seen consistent food price inflation over the course of the year. Recent pushback on affordability and the costs of consumer goods generally has apparently forced the President to make these exceptions, especially after a rough November election cycle for Republicans.
Will these rate cuts cost much? Food prices “weren’t necessarily going up just because of tariffs,” National Economic Council director Kevin Hassett conceded on ABC’s “This Week” last Sunday.
Hearings
HFSC Discusses Reform to Federal Deposit Insurance
The House Committee on Financial Services convened for a hearing on Tuesday in which members discussed reforms to expand federal deposit insurance coverage.
The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) insure deposits up to $250,000 per depositor at each insured financial institution. While over 99 percent of all deposit accounts are fully insured by the FDIC, some businesses often maintain balances exceeding $250,000 in accounts used to store money for payroll, operating expenses, and everyday payments.
A slate of legislation was noticed at the hearing, including the Employee Paycheck and Small Business Protection Act, introduced by Ranking Member Maxine Waters (D-CA), which would:
- authorize the FDIC and NCUA to issue a proposed rule within 18 months to increase the existing deposit insurance limit after completing relevant data collection and analysis.
- allow regulators to quickly establish a Transaction Account Guarantee program to prevent contagion and temporarily protect depositors for up to nine months in a future emergency.
The hearing follows a similar hearing in the Senate Banking Committee on federal deposit insurance reform. Senators Bill Hagerty (R-TN) and Angela Alsobrooks (D-MD) have introduced the Main Street Depositor Protection Act, which would provide $10 million of deposit insurance coverage for noninterest-bearing transaction accounts.
Members have yet to reach consensus on an appropriate level of increased deposit insurance, the structure of a framework including expanded coverage for transaction accounts, and the timeline over which such reforms would be implemented. As discussions continue, members will likely seek to reach consensus on these key details.
House Admin Hearing on Cong. Stock Trading Limits
On Wednesday, the House Administration Committee held a hearing in which members on both sides of the aisle acknowledged the need to address weaknesses in the current statute governing stock trading by members of Congress. The hearing comes as the Restore Trust in Congress Act, a bipartisan consensus bill to ban members of Congress from trading and owning individual stocks, gains momentum and as several members have pushed House leadership to bring the bill to a vote.
The bill, co-sponsored by Reps. Seth Magaziner (D-RI) and Chip Roy (D-TX), has garnered 99 co-sponsors from both sides of the aisle, including two members of the Administration Committee, and combines the best elements of multiple previously proposed pieces of legislation into a strong, comprehensive consensus package. One witness, Dan Savickas, Vice President of Policy and Government Affairs at Taxpayers Protection Alliance (TPA), noted that TPA has endorsed the Restore Trust in Congress Act.
Magaziner, who led the introduction of the Restore Trust in Congress Act, responded to the hearing, saying, “…the American people have made it clear that hearings alone are not enough. We have a strong, enforceable, bipartisan bill to ban stock trading once and for all, and we need Speaker Johnson to bring it to the floor immediately for a vote.”
Ten organizations that support good governance and accountability, including 20/20 Vision, sent a letter to Committee Chair Bryan Steil (D-WI) and Ranking Member Joe Morelle (D-NY) during the hearing, urging the committee to hold a markup on the bill.
Trump Nominations
Levenbach Nominated for Director of the CFPB
Amid his efforts to close the Consumer Financial Protection Bureau permanently, President Trump has nominated Stuart Levenbach, a senior official at the Office of Management and Budget (OMB) and a top aide to OMB Director Russ Vought, to serve as Director of the CFPB. Vought would still likely be in de facto charge of the agency, but would leave his role as acting director before his term either expires in December or is extended by the Senate, as per the Vacancies Act of 1998. Levenbach will now go through the Senate confirmation process, though no date has been set for a confirmation hearing as yet.
The fact that Vought would still lead the agency in all but name was not lost on Senate Democrats. Senator Elizabeth Warren (D-MA), the ranking member of the Senate Banking Committee, denounced Levenbach’s nomination as a “front” for Vought, “to stay on as acting director indefinitely as he tries to illegally close down the agency.” Vought has spent the past several months working to eliminate what’s left of the CFPB, but does not have the legal authority to kill it off entirely. This has included attempting to fire 90 percent of CFPB staff, failing to request funding from the Fed for the current year, and shifting the agency’s ongoing litigation to the Department of Justice ahead of an expected exhaustion of funds in January.
Hill’s FDIC Nom. Clears Senate Banking
FDIC Board member Travis Hill made it one step closer to becoming the head of the Federal Deposit Insurance Corporation (FDIC) when his nomination was approved by the Senate Banking Committee on Wednesday. Hill’s nomination passed along a party-line vote of 13-11. Senate Democrats withheld their support on the grounds that Hill was vice chair of the FDIC when its cultural issues, including sexual harassment and a toxic workplace culture, came to light. While there was some GOP pushback against Hill’s nomination, specifically from Senator John Kennedy (R-LA), over this very issue, in the end, it did not prevent his confirmation from moving forward.
Senate Ag OKs Selig Nom. to Head CFTC
On Thursday, the Senate Agriculture Committee voted along party lines,12-11, to advance Michael Selig’s nomination to serve as chair of the Commodity Futures Trading Commission (CFTC). Senate Democrats, including Ranking Member Amy Klobuchar (D-MN), withheld their support on the grounds that the White House would not commit to filling the vacant Democrat seat on the CFTC.
Selig’s progress has been unusually quick, as his confirmation hearing was held the day prior. This is especially unusual since Trump’s previous nominee, Brian Quintenz, spent months without ever getting a confirmation hearing after some of Trump’s billionaire crypto supporters came out against his nomination. Selig is a relatively uncontroversial pro-crypto pick, so despite unanimous Democratic opposition on Senate Agriculture, Selig is likely to clear a full Senate vote.