Politics: Daily Briefing: Only 114,000 new jobs added in September

Published by: Clark Barrow on Friday October 5th, 2012

Clark Barrow

By CLARK BARROW - Unemployment rate drops to 7.8 percent but job growth still well below replacement levels.

DAILY BRIEFING - SUMMARY

· JOBS - The U.S. economy generated 114,000 jobs in September, but the unemployment rate fell to 7.8 percent from 8.1 percent, the U.S. Bureau of Labor Statistics said Friday.

· FEDERAL RESERVE - A meeting summary from the U.S. Federal Reserve shows central bank officials, staring down potential budget cuts and tax hikes in the U.S. and a debt crisis in Europe, decided they had to do something more to support the economy.

· SMALL BUSINESS - Sixty percent of small business owners/executives say the climate for their companies has gotten worse over the past two years, according to a quarterly survey conducted by the U.S. Chamber of Commerce.

· WHITE HOUSE - According to a report by Breitbart.com, President Obama’s campaign raised more than $150 million in September, which was a record haul for the 2012 cycle, but the campaign may be actively trying to block a story in the works about a “blockbuster donor scandal” that could put its fundraising numbers under intense scrutiny.

· WHITE HOUSE - A day after a muted performance in a presidential debate, President Obama fought back against Republican rival Mitt Romney on Thursday and the Democrat's re-election campaign vowed to learn lessons from the setback.

· ATTACK - A team of U.S. investigators travelled for the first time to the eastern Libyan city of Benghazi on Thursday to analyze the crime scene where the U.S. ambassador was killed in an attack last month, Libyan and U.S. sources said.

· CONCERN - Weeks before the presidential election, President Barack Obama’s administration faces mounting opposition from within the ranks of U.S. intelligence agencies over what career officers say is a “cover up” of intelligence information about terrorism in North Africa.

NEWS TO WATCH

ECONOMIC NEWS

· JOBS - The U.S. economy generated 114,000 jobs in September, but the unemployment rate fell to 7.8 percent from 8.1 percent, the U.S. Bureau of Labor Statistics said Friday.

o The 7.8 percent unemployment rate is the lowest the unemployment rate since January 2009 and the first time the jobless rate has been below 8 percent since President Obama took office in January of 2009.

o Total employment rose by 873,000 in September, following 3 months of little change. The employment-population ratio increased by 0.4 percentage point to 58.7 percent, after edging down in the prior 2 months. The overall trend in the employment-population ratio for this year has been flat. The civilian labor force rose by 418,000 to 155.1 million in September, while the labor force participation rate was little changed at 63.6 percent.

o The broader U-6 measurement, meaning the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons and all persons marginally attached to the labor force, was unchanged at 14.7 percent.

· FEDERAL RESERVE - A meeting summary from the U.S. Federal Reserve shows central bank officials, staring down potential budget cuts and tax hikes in the U.S. and a debt crisis in Europe, decided they had to do something more to support the economy.

o The minutes from the Fed's Sept 12-13 meeting detail the debate that took place when the Federal Open Market Committee (FOMC) opted to take on a third round of massive bond purchases known as "quantitative easing" or "QE3" for this third iteration of the maneuver.

o The fundamental concern out of the Fed was that if the central bank did not do more, the nation's unemployment rate, still stuck above 8 percent, would continue to linger at high levels.

· SMALL BUSINESS - Sixty percent of small business owners/executives say the climate for their companies has gotten worse over the past two years, according to a quarterly survey conducted by the U.S. Chamber of Commerce. That's up from 55 percent who said that back in July.

o Nearly half of small business owners aren't sure if their businesses' best days are ahead of them. Only 15 percent believe the economy will improve over the next two years, and only 17 percent expect to hire more workers next year.

o This growing pessimism may be due to the fact that the fiscal cliff is drawing closer without any signs of resolution. Unless Congress acts, taxes will go up in January for everyone and steep across-the-board cuts will be made in federal spending. More than 60 percent of small business owners think the fiscal cliff will have a significant impact on their businesses.

o Meanwhile, two reports released Thursday found that small businesses cut back on hiring over the summer and small-to-medium sized firms have lowered their staffing plans for the future.

· The Dow Jones Industrial Average climbed 80.75 points, or 0.6%, to 13,575.36.

· The S&P 500 index rose 10.41 points, or 0.7%, to 1,461.40.

· The Nasdaq Composite climbed 14.23 points, or 0.5%, to 3,149.46.

COMMODITIES

· The U.S. national average for a gallon of regular gasoline is $3.78.

o When President Obama was inaugurated, in January 2009, the U.S. national average for a gallon of regular gasoline was $1.85. Average gasoline prices are currently 104 percent higher than they were when Mr. Obama became president.

· Crude oil for November delivery rose $3.57, or 4.1%, to settle at $91.71 a barrel on the New York Mercantile Exchange.

· Gold for December delivery climbed $16.70, or 0.9%, to end at $1,796.50 an ounce on the Comex division of the New York Mercantile Exchange.

IN THE DISTRICT

· ELECTION - As of today, there are 33 days until the November 2012 presidential election.

· CONGRESS - The head of the U.S. House of Representatives Intelligence Committee said on Thursday that significant new cyber threats to U.S. financial networks appeared to be emerging from an "unusual" source.

o Committee Chairman Mike Rogers did not specifically identify the purported new threat nor its origin but referred several times to what he described as Iran's growing cyber espionage capabilities.

o Classified briefings about the possible new keyboard-launched threats may have revived prospects for stalled measures aimed at boosting cybersecurity in the "lame duck" congressional session after the November 6 election, he said.

· WHITE HOUSE - According to a report by Breitbart.com, President Obama’s campaign raised more than $150 million in September, which was a record haul for the 2012 cycle, but the campaign may be actively trying to block a story in the works about a “blockbuster donor scandal” that could put its fundraising numbers under intense scrutiny.

o According to the Washington Examiner, “a taxpayer watchdog group conducted a nine-month investigation” and uncovered “thousands of cases of credit card solicitations and donations” to the Obama campaign. Many of those donations have allegedly come from overseas and may be in violation of federal election laws.

o National outlets are preparing stories on the matter, and the Obama campaign has been trying to block those stories from being published.

o Under Federal Election Commission (FEC) regulations, campaigns have to make their “best efforts” to collect information about contributors who donate $50-$200, but those who donate less than $200 do not have to be publicly disclosed.

o Further, all donations less than $50 fall under the “Pass-the-Hat” rule, which means campaigns do not have to make their “best efforts” to collect identifying information on these donors and can actually report all such donations under a lump sum.

· WHITE HOUSE - It was especially clear on Thursday that the AARP’s work promoting President Obama’s health care law has become a sticky wicket for the powerful senior citizen’s lobby.

o While the AARP was one of the loudest proponents of the 2010 overhaul, the group quickly backed away from Mr. Obama after he invoked it to defend the law during Wednesday night’s presidential debate, insisting it’s a nonpartisan group that doesn’t allow politicians to use its name.

o Obama cited the nonpartisan senior lobby twice in Wednesday's debate when arguing against Mitt Romney's Medicare proposals. The remarks prompted a polite statement from AARP Senior Vice President John Hishta asking candidates to refrain from mentioning the group.

· WHITE HOUSE - A day after a muted performance in a presidential debate, President Obama fought back against Republican rival Mitt Romney on Thursday and the Democrat's re-election campaign vowed to learn lessons from the setback.

o A feisty Obama told a rally of some 12,000 people that the former Massachusetts governor was untruthful during Wednesday's 90-minute debate in Denver, which most observers reckoned the Republican won.

o With two more presidential debates before the November 6 election, senior aide David Axelrod said the Obama campaign would adjust its strategy as a result of the debate. Part of the Obama strategy will be to attack Romney for what the Democratic campaign says are untruthful statements during the debate on his tax plan, Medicare and deficit cutting, as well as pressing him on what appeared to be changes in position on issues like bank regulation.

PRESIDENT’S SCHEDULE

· In the morning, President Obama will receive the Presidential Daily Briefing at the White House.

· Later in the morning, the president will depart Washington, D.C. and travel to Fairfax, Virginia.

· Later, the president will deliver remarks at a campaign event at George Mason University Center for the Arts Concert Hall in Fairfax, Virginia.

· In the afternoon, the president will depart Fairfax, Virginia and travel to Cleveland, Ohio.

· Later in the afternoon, the president will deliver remarks at a campaign event at Cleveland State University in Cleveland, Ohio.

· Later, the president will depart Cleveland, Ohio and return to Washington, D.C.

HAPPENING IN THE U.S. CONGRESS

U.S. SENATE

· The U.S. Senate will convene for a pro forma session today.

U.S. HOUSE OF REPRESENTATIVES

· The U.S. House is in session today.

TOPICS OF INTEREST

NATIONAL SECURITY

· ATTACK - A team of U.S. investigators travelled for the first time to the eastern Libyan city of Benghazi on Thursday to analyze the crime scene where the U.S. ambassador was killed in an attack last month, Libyan and U.S. sources said.

o FBI agents were sent to Libya after the September 11 assault on the U.S. diplomatic mission and on another facility in which Ambassador Christopher Stevens and three other Americans were killed.

o But, until now, they had mainly remained in Tripoli and had not visited the site of what the United States has called a "deliberate and organized terrorist attack", partly because of security concerns.

o Meanwhile, the U.S. State Department on Thursday dismissed concerns that sensitive information may have been jeopardized because the consulate where Ambassador Christopher Stevens and three other Americans died on Sept. 11 still hasn't been secured more than three weeks later.

o The comments were in response to a Washington Post report that “sensitive” documents – including U.S. efforts to collect weapons, Stevens's full itinerary and personal information about dozens of Libyan contractors – could still be found among the charred rubble as of Wednesday. The tone was in sharp contrast to the U.S. State Department's strong criticism against CNN after the network found Stevens' diary and reported that he'd felt targeted by al Qaeda.

· CONCERN - Weeks before the presidential election, President Barack Obama’s administration faces mounting opposition from within the ranks of U.S. intelligence agencies over what career officers say is a “cover up” of intelligence information about terrorism in North Africa.

o Intelligence held back from senior officials and the public includes numerous classified reports revealing clear Iranian support for jihadists throughout the tumultuous North Africa and Middle East region, as well as notably widespread al Qaeda penetration into Egypt and Libya in the months before the deadly Sept. 11 terrorist attack on the U.S. consulate in Benghazi.

o Meanwhile, amid the chaos of the attack on the U.S. mission in this coastal city last month, neither the militia charged with guarding the compound nor American diplomats appeared to follow plans for what to do under assault, according to Libyan officials and guards, as well as documents found in the wreckage.

o In addition, at least three Libyan guards hired to defend the compound said in interviews that they had met with American officials to express concerns about lax security, and two said they had done so on Sept. 11, the day of the attack.

FEDERAL GOVERNMENT

· FANNIE & FREDDIE - Federal officials are running into an unexpected roadblock as they try to bring private money back to a U.S. mortgage market now dominated by the government.

o Fannie Mae and Freddie Mac, the government-controlled mortgage finance giants, were supposed to issue a new class of mortgage securities by the end of September, according to plans set by their regulator. But they missed this goal, partly because it became clear that new regulations governing interest-rate swaps under the Dodd-Frank Act were complicating the debt offering, according to people with knowledge of those plans.

o The new securities, known as risk-sharing bonds, would offer investors a higher yield than standard mortgage bonds in return for bearing losses should loans go bad. For private investors, that would increase the risk but also the reward from the current system, in which the two taxpayer-supported firms guarantee that investors receive payments even when borrowers default.

o But if these debt securities fall under the oversight of the Commodity Futures Trading Commission—because the 2010 Dodd-Frank financial overhaul gave the regulator broad new powers to police swaps trading—Fannie and Freddie could face additional compliance responsibilities and costs. Risk-sharing bonds may be structured with a synthetic contract linking them to the performance of loans backing another security, rather than a traditional swap, but such contracts could fall under the CFTC's expanded reach, the same people said.

o That in turn could become the latest roadblock to restarting the virtually dormant market for private mortgage-backed securities without federal guarantees.

· OBAMACARE - As Congress probes expensive public-relations contracts to market the unpopular Obamacare law to the American public, the Centers for Medicare and Medicaid Services recently announced that it has inked a deal worth more than $3 million to promote Obamacare’s “exchanges.”

o CMS, a division of the Department of Health and Human Services, will pay PR firm Weber Shandwick at least $3.1 million for the new contract, according to a report in PR Week. Weber will promote state-based health care “exchanges” established by Obamacare.

o The contract is the second major HHS contract landed by Weber. It inked a $3.4 million deal in 2010 to help Medicare patients spot and prevent fraud.

FOREIGN POLICY

MIDDLE EAST

· SYRIA - The United States expressed hope on Thursday that Turkey's border clash with Syria does not escalate further, but stood by its NATO ally's right to defend itself against aggression spilling over from Syria's internal armed conflict.

o The U.S. State Department said Turkey's decision to mount retaliatory artillery strikes after a Syrian mortar killed five civilians in southeastern Turkey on Wednesday was appropriate and proportional.

o Turkey stepped up retaliatory artillery strikes on a Syrian border town on Thursday, killing several Syrian soldiers, while its parliament approved further military action in the event of further spillover from the Syrian fighting.

· IRAN - The U.S. and Europe are working on new coordinated measures intended to accelerate the recent plunge of Iran's currency and drain its foreign-exchange reserves, according to officials from the Obama administration, U.S. Congress and European Union.

o The first salvos in this stepped-up sanctions campaign are expected at a meeting of EU foreign ministers on Oct. 15, including a ban on Iranian natural-gas exports and tighter restrictions on transactions with Tehran's central bank, European officials said.

o A number of additional banks are also expected to be targeted, in the continuing effort to press Supreme Leader Ayatollah Ali Khamenei to curb his country's nuclear program.

o The U.S. and EU are also considering imposing a de facto trade embargo early next year by moving to block all export and import transactions through Iran's banking system—which could further choke off Tehran's access to foreign currency, U.S. and European officials said.

ASIA

· AFGHANISTAN - The Afghan president, Hamid Karzai, on Thursday accused the United States of playing a “double game” by fighting a war against Afghan insurgents rather than their backers in Pakistan, and by refusing to supply his country with the weapons it needs to fight enemies across the border. He threatened to turn to China, India and Russia for those arms.

o He also accused the Western news media of trying to undermine the confidence of the Afghan people by publishing articles suggesting that a civil war and economic collapse might follow the departure of NATO troops at the end of 2014. However, he also promised, using his strongest words to date, that he would step down from the presidency and that there would be an election.

o The relationship between Afghanistan and the United States has been on a downward slide since midsummer, shortly after a conference in Tokyo at which Western countries pledged $16 billion to support Afghanistan through 2015.