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On The Money — Jobs report spurs 2023 optimism

January 6, 2023 Published by

Just In | The Hill 

We dug into the first jobs report of the year that showed record low unemployment. We’ll also look at the latest congressional insider trading case to close and Southwest Airlines’ massive losses. 

But first, stay up to date on the rapidly changing speakership battle.  

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter?

5 things the jobs report says about 2023 economy

Friday’s jobs report showed a slowing pace of wage growth even as employment levels climbed back up to a 50-year high — a sign that the Fed is breaking the back of inflation and that consumer prices will continue their five-month downward slide. 

Next week’s consumer price index (CPI) will give a clearer picture of where the economy is heading in 2023, but Friday’s job numbers indicate that the Fed’s goal of a “soft landing” — lower prices without a major recession — may be within reach. 

While most economists are still predicting a recession in 2023, many sounded positive notes on Friday. 

Expectations set last year that only a serious economic downturn with mass unemployment would be able to tame prices seem to be diminishing. 

“Let me draw a line under today’s jobs report: Rapid job growth, record low unemployment, and wage growth running at levels likely to cool inflation is an astonishing trifecta of good news,” Justin Wolfers, an economist at the University of Michigan, wrote online Friday. 

“Looking forward, we should probably be a little bit less afraid of 2023,” economist Aaron Terrazas of jobs website Glassdoor said in an analysis. 

Tobias Burns and Sylvan explain why here. 

Read more: Biden hails December jobs report: ‘Moving in the right direction’  

📈 CASE CLOSED

SEC closes probe into Burr stock trading without taking action  

Retired Sen. Richard Burr (R-N.C.) announced on Friday that the Securities and Exchange Commission (SEC) has closed a 2 1/2-year investigation of his stock trading activities without taking action against him.    

“This week, the SEC informed me that they have concluded their investigation with no action. I am glad to have this matter in the rearview mirror as I begin my retirement from the Senate following nearly three decades of public service,” said Burr, who retired earlier this week after serving three terms in the Senate.   

The SEC had been investigating Burr’s sale of $1.65 million worth of stock at the onset of the COVID-19 pandemic in February 2020. 

The sale included a large share of hospitality industry stocks, which took a hit when worldwide travel and tourism ground to a halt a few weeks later.    

While the Justice Department also closed its investigation into Burr, he was forced to step down as chairman of the Senate Intelligence Committee. 

Alexander Bolton has more here. 

✈️ BIG LOSSES

Holiday meltdown will cost Southwest Airlines up to $825 million  

Southwest Airlines’ holiday meltdown will cost the company between $725 million and $825 million, the airline said in a regulatory filing Friday.   

The airline will report a loss in the fourth quarter after canceling nearly 17,000 flights over the holidays, a fiasco that disrupted millions of travelers’ plans and left many stranded for days.   

Southwest said that it will lose up to $425 million in revenue on refunded flights alone. 

The company will also shell out huge sums to provide frequent flier points to customers and reimburse stranded travelers for their unexpected travel, lodging and food costs.  

That doesn’t account for additional costs, such as a loss of future customers or potential fines from the Department of Transportation, which is probing Southwest. 

Karl has more here. 

🚗 SALES SPIKE

US electric vehicle sales surge in 2022, gain on Tesla  

U.S. electric vehicle sales jumped by two-thirds in 2022 as sales for the overall auto industry dropped, The Wall Street Journal reported Friday. 

Fully electric vehicles jumped in popularity last year, making up 5.8 percent of all vehicles sold in 2022, an increase from 3.2 percent in 2021. 

The new data, which the publication gathered from market-research firm Motor Intelligence, comes after the overall U.S. auto industry saw its worst sales year in over a decade, with sales falling 8 percent in 2022.  

The Hill’s Lauren Sforza has more here. 

Good to Know

The Biden administration on Friday issued new guidance for incorporating greenhouse gas emissions into federal agencies’ environmental reviews, replacing Obama-era guidelines that had been withdrawn by the Trump administration. 

The guidance from the White House Council on Environmental Quality (CEQ) follows a National Environmental Policy Act (NEPA) rule from April. It also updates the Obama-era guidance to factor in updated climate science. 

Other items we’re keeping an eye on: 

An experimental Alzheimer’s drug that moderately slows cognitive decline was approved by the Food and Drug Administration on Friday. 

Two key Democratic senators with oversight of intelligence and the armed services met with Ukrainian President Volodymyr Zelensky in Kyiv on Friday, shortly before the Biden administration announced a nearly $4 billion military aid package for the country. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you next week. 

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Sylvan Lane