12:30 Report

The Hill’s 12:30 Report — New economic data’s insight on recession fears

by Cate Martel - 01/18/23 12:30 PM ET

AP/John Raoux
Credit cards as seen Thursday, July 1, 2021, in Orlando, Fla. Record low-interest mortgages are long gone. Credit card rates will likely rise. You’ll pay more for an auto loan. The unusually large three-quarter point hike, Wednesday, June 15, 2022 in the Fed’s benchmark short-term rate is going to have a lot of impacts on Americans’ finances. The hope is that by making borrowing more expensive, the Fed will succeed in cooling demand for homes, cars and other goods and services and slow inflation. (AP Photo/John Raoux, File)

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–> A midday take on what’s happening in politics and how to have a sense of humor about it.*

*Ha. Haha. Hahah. Sniff. Haha. Sniff. Ha–breaks down crying hysterically.

🐢 TALK OF THE MORNING

Americans are spending a bit less:

Americans spent less in December amid concerns about the economy and mounting inflation, according to new Census Bureau data released this morning.

The numbers: “U.S. retailers and restaurants made $677.1 billion in sales in December, down 1.1 percent from a revised November sales total of $685 billion, according to the Census Bureau. It was the second consecutive monthly decline in retail sales, which are adjusted for seasonal shifts but not inflation.”

What this could mean for the economy: “Falling sales may force retailers and restaurants to cut or stabilize prices, which will help take a bite out of inflation and keep price growth slowing down. But a prolonged drop in consumer spending — which drives roughly two-thirds of the U.S. economy — could be a sign of a looming slowdown or recession.”

More from The Hill’s Sylvan Lane

AWWWYEAAAAH:

Wholesale prices dropped 0.5 percent in December in a bigger decline than economists had expected.

For context: Economists expected a decline of 0.1 percent.

Breakdown by category — and why this important

‘FIVE WAYS A DEBT LIMIT CRISIS COULD DERAIL THE US ECONOMY’:

1. “Rising recession risks”

2. “Global financial crisis”

3. “Americans could lose crucial federal benefits.”

4. “Higher interest rates.”

5. “Falling public trust.”

Helpful explainer for each from The Hill’s Sylvan Lane and Aris Folley

HAPPENING THIS WEEK — ‘HOW “EXTRAORDINARY MEASURES” CAN POSTPONE A DEBT LIMIT DISASTER’:

The New York Times’s Alan Rappeport writes, “The United States is expected to hit a cap on how much money it can borrow this week, a development that will result in the Treasury Department employing what are known as ‘extraordinary measures’ to ensure that the federal government has enough money to pay its bills.” How the Treasury can punt this limit

It’s Wednesday. I’m Cate Martel with a quick recap of the morning and what’s coming up. Did someone forward this newsletter to you? Sign up here.

In Congress

Did Kevin McCarthy install a punching bag in the speaker’s lobby?:

“Speaker Kevin McCarthy (R-Calif.) is playing offense by putting early pressure on Senate Democrats running for reelection in red states to back proposals being passed out of the GOP-controlled House.”

A big question — how does Schumer handle it?: “Senate Majority Leader Charles Schumer (D-N.Y.) must decide how much political cover to give members of his caucus running for reelection in states such as West Virginia, Montana and Ohio, with control of the chamber on the line in 2024.”

How this could shake out, from The Hill’s Alexander Bolton

🏎️ In the White House

Dems are looking for a GP:

“The White House is once again struggling with its messaging, this time on the discovery of classified documents from President Biden’s time as vice president, where administration officials have sought to minimize the damage due to the revelation but have struggled to address it cohesively.”

How Dems have been reacting to the news: “Democrats … have had scattered reactions, ranging from praising the Biden administration over its cooperation with the Department of Justice (DOJ) and National Archives to suggesting a congressional review of the materials over national security concerns. Others have acknowledged what a political headache it has become for the president.”

A big reason the responses have been disjointed: Because of mixed messaging from the White House.

The Hill’s Brett Samuels and Alex Gangitano explain

🪓 News this morning

Microsoft is axing 10,000 employees:

CNN Business’s Catherine Thorbecke and Hanna Ziady report that “Microsoft plans to lay off 10,000 employees as part of broader cost-cutting measures, the company said in a securities filing on Wednesday, making it the latest tech company to rethink staffing amid economic uncertainty.”

Read Microsoft CEO Satya Nadella’s memo to staff

💬 In other news

This is VERY cool, but pretty creepy technology:

The new, free AI technology search tool “ChatGPT” can create essays, songs, poems, stories, etc. when given prompts. It launched in November and has gotten a lot of attention for its potential capabilities.

Well, the AI technology has caused quite a stir in schools, some of which have already banned its use.

The obvious worry: Students can very easily cheat. Asking ChatGPT the same question twice often yields different answers, making it difficult for educators to discern whether a student used the tech.

Another worry: The AI technology sorts through mass amounts of information to create its answers and its responses are not always correct.

The Hill’s Lexi Lonas has a helpful explainer on the technology and the controversy it has started among educators

Want to try it out yourself? Here’s the link to ChatGPT

SOME HEADLINES AND TIDBITS ABOUT CHATGPT SINCE IT WAS RELEASED:

From Sky News: “A recruitment team unknowingly recommended ChatGPT for a job interview after the AI was used to complete an application task.”

From @CanesDavid: “Just used #chatGPT to write a letter rebutting a health insurance denial! So convenient and efficient. Even gave references! #chatgpt #healthinsurance #patientadvocacy … (then it composed the tweet)”

Lol!: “@kevinschawinski tweeted, “First #ChatGPT answer which made me pause.” Read the creepy conversation with ChatGPT

@tqbf asked the AI to: “Write a biblical verse in the style of the king james bible explaining how to remove a peanut butter sandwich from a VCR.” Read its response

AH HA — I’M NOT SURPRISED BY THIS REBUTTAL TO THE TECH:

NPR’s Emma Bowman writes, “Edward Tian, a 22-year-old senior at Princeton University, has built an app to detect whether text is written by ChatGPT, the viral chatbot that’s sparked fears over its potential for unethical uses in academia.” What we know

NEW REPORTING TODAY:

Time’s Billy Perrigo reports that “OpenAI Used Kenyan Workers on Less Than $2 Per Hour to Make ChatGPT Less Toxic.” The full read

🦠 The COVID-19 numbers

Cases to date: 101.5 million

Death toll: 1,095,149

Current hospitalizations: 21,977

Shots administered: 666 million

Fully vaccinated: 69.1 percent of Americans

CDC data here.

🐥Notable tweets

Whoops:

Reporter Rachel Louise Just posted a clip of a segment, in which a man accidentally walks into the live shot. “You can practically hear the ‘ope,’” she captioned it. Watch

⏱On tap

The House and Senate are out. President Biden and Vice President Harris are in Washington, D.C.

Today: Harris has no public events scheduled.
9 a.m.: Biden received his daily briefing.
Jan. 19: The Hill is hosting a virtual event, “The Future of Cities: Mayors Forum.” Speakers and how to RSVP

All times Eastern.

📺What to watch

This morning: Ukrainian President Volodymyr Zelensky addressed the World Economic Forum. Watch
3 p.m.: White House press secretary Karine Jean-Pierre gives a press briefing. Livestream
3:45 p.m.: U.S. mayors hold a discussion on gun violence at the U.S. Conference of Mayors winter meeting. C-SPAN livestream