Job Growth in a Shrinking Economy: NPR

While the size of the economy has shrunk, the country continues to create jobs at a surprising rate. Additionally, hedge fund managers find themselves in the lead after negotiations on the Democrats’ climate change bill.



SCOTT SIMON, HOST:

Something unusual is happening in the US economy – inflation has hit a 41-year high. The production of goods and services declines. But employers continue to add jobs – more than half a million last month. And wages rose 5.2% from a year earlier. We turn now to NPR editor and correspondent Ron Elving.

Ron, thank you very much for being with us.

RON ELVING, BYLINE: Glad to be with you, Scott.

SIMON: So was President Biden right last week when he said we weren’t in a recession?

ELVING: Those numbers certainly indicate he was right. It was double what we expected. The labor market is therefore signaling anything but a recession. Yet we had these low numbers on growth. So the debate continues. The official judgment comes from the National Bureau of Economic Researchers, and they are still considering. Now, that could come down to what you mean by recession. Some people use this term when they mean they are facing challenges. This can mean higher gas prices, higher bills for rent and groceries. It’s the economy for them. And they don’t care what you call it. The fact is, it hurts. It hurts enough that many people can’t do it on a single paycheck.

So part of this hiring frenzy that we’ve seen this year is people getting second jobs. Now, that said, an unemployment rate of 3.5% is surprisingly low, and the wage increase is welcome. But both will increase labor costs for businesses, which will drive up prices and further fuel inflation. The Federal Reserve, while it likes full employment, must also contain inflation. So expect another big move up in interest rates next month. And when that happens, you can expect to hear more about a coming recession.

SIMON: Weak state primaries – Kansas voters decisively defeated a referendum that would have drastically restricted abortion in that state. How do you read the vote there?

ELVING: Above all, it proved that the issue of abortion can drive turnout, even in historically conservative and Republican states. Turnout in Kansas last week was nearly double what it was in the last comparable primary. Many unaffiliated voters showed up to vote solely on this anti-abortion measure, and they voted it down. Today, late yesterday, the Indiana State Legislature passed tough new restrictions on abortion, but not without some exceptions. They did it in the Legislative Assembly, not by referendum. And we can expect to see more legislatures do so in the future.

SIMON: Meanwhile, in Arizona, four Trump-endorsed candidates have won their races for statewide office. Was it unexpected?

ELVING: Yeah, especially maybe Senate candidate Blake Masters, who’s an outspoken venture capitalist who’s about to get a lot more attention. He’s an incendiary figure, much like Trump. One of his advertisements shows him with a weapon which he says is not for hunting but for, in quotes, “killing people”. In the race for governor, a former TV news anchor named Kari Lake edged out a more established candidate. Lake said she would not have certified Biden winning 2020 in Arizona, and part of immigration from the South is invasion. And the party’s nominees for Attorney General and Secretary of State are also Trump-backed Holocaust deniers. So the question becomes whether these candidates are too Trumpian to win in a state that, after all, Trump lost in 2020.

SIMON: Let me ask you about Michigan. Were Democrats a little too smart for their own good when they backed a Trump-backed candidate over a moderate in the Republican primary?

ELVING: The moderate Republican was first-term Peter Meijer, who voted to impeach Trump in 2021. His opponent, John Gibbs, had very little campaigning, but Democrats paid for TV ads, saying he was too close to Trump. Of course, in the Republican primary, it gave him a boost. That was the idea. The Democrats therefore hope that he will be easier to beat than Meijer. But this stuff has a weird way of bouncing around, Scott. And beyond that, it’s hard to pose as haughty defenders of democracy when you do this kind of stunts.

SIMON: A jury in Austin, Texas found — I’m not going to call Alex Jones a broadcaster — a conspiracy theorist — fined him $45.2 million in damages for lying to About Sandy Hook and the massacre there. What do you see in this verdict?

ELVING: It’s about a Texas jury trying to get justice in a blatant case after a slam dunk of a trial. They first discovered that Jones would have to pay $4 million in compensatory damages, but Jones could get away with it by filing for bankruptcy. The next phase therefore consists of damages – ten times higher – but possibly subject to a ceiling under Texas law. It should be noted that this lawsuit also exposed Jones to charges of perjury, which is a criminal offense, and lawsuits are pending against him in other states. So much more to come for Mr. Jones.

SIMON: Ron Elving, thank you.

ELVING: Thank you, Scott.

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