At the White House, the president signed an emergency bill to avert a rail strike that he said could have caused 765,000 job losses in two weeks and plunged the country into a painful downturn. But many voters and economists still fear that a recession is nigh and the price of reducing high prices will be layoffs.
Biden pointed to the addition of 263,000 jobs in November — with the unemployment rate holding steady at 3.7% — as proof that his policies have bulked up the economy. He suggested that the major recession risk was the freight rail strike, a problem the country avoided by having Congress impose an agreement that raises pay but fails to provide the additional paid sick leave that workers demanded.
“Things are moving — they’re moving in the right direction,” Biden said. “As we go into the holiday season, here’s what this all means: The Americans are working, the economy is growing.”
White House officials do see reason for optimism. Gasoline prices are averaging $3.45 a gallon, down sharply from a June peak, according to AAA. The economy is expanding after shrinking in size during the first half of the year. And since July, workers’ average hourly earnings have been rising faster than consumer prices.
But inflation can be a game of whack-a-mole, and Friday’s employment report suggested that wage growth actually could be part of the problem.
Inflation has been something of a moving target during Biden’s presidency. Supply chain challenges and shortages pushed up prices as the country started to recover from the pandemic in 2021. Higher oil and food costs drove up inflation after Russia invaded Ukraine in February. And the jobs report showed that wage growth accelerated sharply, which could fuel inflation going forward.
The Federal Reserve is attempting to reduce inflation by raising its benchmark interest rates. That action reduces economic activity in order to bring down prices.
On Wednesday, Fed Chair Jerome Powell suggested the U.S. central bank might not have to raise rates as aggressively to return inflation to the 2% annual target. That comment caused the stock market to rise, only for the optimism to fizzle out on Friday as the new and revised wage data indicated the Fed might need to do more to cool the economy.
“With these revisions, the pace of wage growth is more consistent with 5% inflation than with 2% inflation,” said Harvard University professor Jason Furman, formerly the top economist in the Obama White House. “In this sense it may take a larger adjustment in labor markets than previously hoped to bring inflation down.”
The president’s key message is that his policies have helped to avoid catastrophes such as a recession caused by a rail strike. The bill he signed Friday binds rail companies and workers to a proposed settlement that was reached between the railroads and union leaders in September but rejected by the workers of some unions.
“The bill I’m about to sign ends a difficult rail dispute and helps our nation avoid what without a doubt would have been an economic catastrophe at a very bad time in the calendar,” said Biden. He said his team helped negotiate a “good product, but we still have more work to do in my view.”
Members of four of the 12 unions involved had rejected the proposed contract as lacking sufficient paid sick leave, setting up the possibility of a strike beginning Dec. 9. Biden acknowledged the shortcoming and said he would continue to push for that benefit for every U.S. worker.
“I’ve supported paid sick leave for a long time,” said the president, a staunch labor union supporter. “I’m going to continue that fight until we succeed.”
He said that Republican lawmakers blocked the inclusion of seven days of paid sick leave in the agreement, and it’s unclear how he would get backing for expanding family leave to all workers with the GOP winning the House majority in November’s elections.
Republican leaders have tapped into deep doubts about the U.S. economy with party officials noting that higher prices have caused Americans’ savings rate to hit the lowest level in 17 years. About three-quarters of voters last month called economic conditions “poor” or “not so good,” according to AP VoteCast.
Texas Rep. Kevin Brady, the ranking Republican on the House Ways and Means Committee, called the jobs report a “nightmare before Christmas.”
“The White House is absolutely clueless about the very real labor shortage still hurting Main Street businesses and driving prices higher,” Brady said. “And for many workers, they are struggling with real wage losses and real pay cuts, making sticker shock a big part of this year’s holiday gift shopping experience.”
Although Biden has said the economy is heading in the right direction, the employment report indicates that it’s on a “more muddled path” in which it’s unclear whether a downturn and eventual job losses can be averted, said Daniel Zhao, lead economist at Glassdoor, an employment website.
The mixed signals come in part because the employment report comes from two surveys. The survey of employer payrolls shows how many jobs were added, while a separate survey of households determines the unemployment rate.
The two surveys have diverged with the household numbers indicating the economy has actually lost jobs over the past two months, contradicting the gains seen in the establishments survey.
Zhao said the economy doesn’t look as though it is about to tip into recession, but the risk is that when job figures are revised next year policymakers could learn in hindsight that the U.S. was shedding jobs as the Fed continued to raise rates.
Erdogan unveils Turkey’s first astronaut on election trail
Turkey’s first astronaut will travel to the International Space Station by the end of the year, President Recep Tayyip Erdogan said Saturday after an illness forced him to cancel several days of appearances.
Air force pilot Alper Gezeravci, 43, was selected to be the first Turkish citizen in space. His backup is Tuva Cihangir Atasever, 30, an aviation systems engineer at Turkish defense contractor Roketsan.
Erdogan made the announcement at the Teknofest aviation and space fair in Istanbul, the president’s first public appearance since falling ill during a TV interview on Tuesday. He appeared alongside Azerbaijan’s president, Ilham Aliyev, and Libya’s interim prime minister, Abdul Hamid Dbeibeh.
“Our friend, who will go on Turkey’s first manned space mission, will stay on the International Space Station for 14 days,” Erdogan said. “Our astronaut will perform 13 different experiments prepared by our country’s esteemed universities and research institutions during this mission.”
Erdogan described Gezeravci as a “heroic Turkish pilot who has achieved significant success in our Air Force Command.”
The Turkish Space Agency website describes Gezeravci as a 21-year air force veteran and F-16 pilot who attended the U.S. Air Force Institute of Technology.
Wearing a red flight jacket, Erdogan appeared in robust health as he addressed crowds at the festival. Turkey’s presidential and parliamentary elections are scheduled for May 14, and opinion polls show Erdogan in potentially his toughest race since he came to power two decades ago.
Turkey is dealing with a prolonged economic downturn, and the government received criticism after a February earthquake killed more than 50,000 in the country. Experts blamed the high death toll in part on shoddy construction and law enforcement of building codes.
While campaigning for reelection, Erdogan has unveiled a number of prestigious projects, such as Turkey’s first nuclear power plant and the delivery of natural gas from Black Sea reserves.
Israelis rally for 17th week against judicial overhaul plans
Tens of thousands of Israelis protested judicial overhaul proposals Saturday in the 17th weekly rally against Prime Minister Benjamin Netanyahu’s governing coalition.
The demonstrations have been ongoing since the beginning of the year, and organizers plan to continue, despite Netanyahu delaying the changes last month. The leaders of the mass protests want the proposals scrapped altogether.
“We are just getting started,” read a banner that demonstrators held at the main protest in Tel Aviv, Israel’s economic hub. Smaller demonstrations were reported in several parts of the country.
Spanish Prime Minister and Socialist leader Pedro Sanchez voiced support to the Israeli antigovernment protesters in a video message aired on a large screen in Tel Aviv.
We as Socialist International have always fought for freedom, equality, justice, and democracy. Yet, as many of you know, these are values that we cannot take for granted,” Sanchez said.
Protesters argue the proposed changes threaten Israel’s democratic values, hurting a system of checks and balances and concentrating authority in the hands of Netanyahu and his extremist allies.
They also say that the prime minister has a conflict of interest in trying to reshape the nation’s legal system at a time when he is on trial.
Such changes would result in weakening the Supreme Court, giving parliament, which is controlled by Netanyahu’s allies, authority to overturn its rulings and limiting its ability to review laws.
The protest gained support from the military’s elite reserve force, businesses, and large sectors of the Israeli community. But on Thursday, tens of thousands of right-wing Israelis who support the legal
‘Total nightmare:’ As Florida insurance companies go insolvent, homeowners pay the price
Seminole county couple has three-year open claim because of insolvent insurer.
What happens when your property insurer goes out of business?
It is happening quite a bit in Florida and is leading to all policyholders paying more.
The Florida Insurance Guaranty is adding a 1% assessment to policyholders starting in October to cover claims for insolvent companies.
A Seminole County couple has lived without a fully functioning kitchen for three years because their insurer went out of business.
Sandra Braga Alfonso said what started as a leak under her sink has turned into a three-year nightmare.
She said there was already a fight with her insurer to pay out the claim, but then the company went under and it got worse.
Alfonso has a fridge and an oven but is missing lower cabinets, a stove, her normal sink, and a dishwasher.
“It has been a total nightmare,” Alfonso said.
It started in December of 2019 with a leak under her sink, she said.
She eventually discovered water in all her lower cabinets and in the sheetrock behind the cabinets, she said.
“The insurance company gave us approval to rip everything out that was damaged and now they don’t want to pay to put it back in,” Alfonso said.
The insurance company cut a check for $4,800, she said.
Of that $4,300 went to water mitigation to prevent mold. That left about $500, not nearly enough to replace her kitchen, she said.
“We’ve tried to settle, go to mediation, everything,” she said.
Finally, Alfonso and her husband filed a lawsuit against her insurer, but after two years of hearings and motions and waiting for a court date, her insurer went out of business.
She was with Capitol Insurance, but according to the Florida Department of Financial Services, Capitol was merged into Southern Fidelity, which is now one of 14 companies in liquidation.
“I’m over it. I just want my kitchen. I just want to be able to live again. I love to cook, and I can’t,” Alfonso said.
In the last year, Florida lawmakers have had three special legislative sessions to deal with Florida’s property insurance crises.
News 6 asked Alfonso if she thinks anything is being done in Tallahassee to help consumers with their insurance issues.
“No, it’s all for the insurance company,” she said.
One of the biggest moves made in Tallahassee over the last year is the legislature doing away with what is referred to as “one-way attorney’s fees.”
That means if you sued your insurer over a claim and won, the insurance company had to pay your attorney’s fees. Without it, Alfonso said she would never have been able to sue her insurer even though in her case, it didn’t do any good.
No. My husband’s retired. He’s on disability and he’s retired we’re on a fixed income,” Alfonso said.
Alfonso has now turned to the Florida Insurance Guaranty Association, which handles the claims of insolvent property and casualty insurance companies.
They are still negotiating the amount it will take to fix her kitchen — more than three years later.
“I owned my first home when I was 20-something years old,” Alfonso said. “I’ve been paying my insurance premiums since I’m like 25, never filed a claim and look where I am now,” Alfonso said.
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