On The Money — How the economy defied recession fears in 2022

After all was said and done, the U.S. economy had a pretty solid year. We’ll also look at President Biden’s warning to Republicans over the debt limit and why jobless claims are falling even amid reports of layoffs. 

But first, find out about the Congressional Dads Caucus. 

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

Resilient US economy grows 2.1 percent in 2022 

The U.S. economy powered through high inflation, rising interest rates and an energy shock to grow at a solid pace over the course of 2022, according to data released Thursday by the Commerce Department.  

U.S. gross domestic product (GDP) grew 2.1 percent last year and at an annualized rate of 2.9 percent during the fourth quarter. That means the U.S. economy would have grown by nearly 3 percent if the pace of growth in the fourth quarter lasted an entire year. 

• Economists had been expecting between 2.6 and 2.8 percent annualized growth in the fourth quarter, so the figures came in ahead of expectations.
   
• They’re a modest fall-off from the 3.2 percent growth rate in the third quarter. 
   
• Notably, inflation-adjusted personal incomes increased 3.3 percent in the fourth quarter, compared to an increase of 1 percent in the third quarter. 

“Despite some slight dips in GDP in the first half of the year, this latest data suggests that the U.S. likely made it through 2022 without entering a recession,” Jeremy Horpedahl, an economist at the University of Central Arkansas, said in an email to The Hill. 

Tobias Burns has more here. 

HERE’S THE DEAL

Biden: I won’t let GOP use debt ceiling as ‘bargaining chip’ 

President Biden on Thursday called the prospect of the federal government defaulting on its debt “mind-boggling” but pushed back against Republican lawmakers seeking to leverage negotiations over raising the debt ceiling in exchange for spending cuts.  

“If Republicans want to work together on real solutions and continue to grow manufacturing jobs, build the strongest economy in the world and make sure Americans are paid a fair wage, I’m ready,” Biden said in remarks on the economy in Springfield, Va. “But I will not let anyone use the full faith and credit of the United States as a bargaining chip.”  

• The White House has staked out the position that it will not negotiate with Republicans over the debt limit. 
  
• Republicans have argued for cuts or reforms to major programs in order to limit future spending as part of any agreement to raise the debt ceiling. 

“The very notion that we would default on the safest, most respected debt in the world is mind-boggling,” Biden said. “I’m not going to get into the reckless threats that take the economy hostage in order to force an agenda that’s going to only limit American workers and weaken us internationally. I won’t let that happen.” 

Brett Samuels has more here. 

SILVER LINING

Jobless claims fall despite mounting layoffs in tech sector  

New first-time applications for jobless benefits fell last week, even as major technology and media companies announced thousands of layoffs, according to data released Thursday by the Labor Department. 

• In the week ending Jan. 21, initial claims for unemployment insurance totaled 186,000 after seasonal adjustments, down 6,000 from the previous week’s total of 190,000.  
  
• Roughly 197,500 Americans filed to begin new cycles of jobless benefits each week over the past month, still well below pre-pandemic averages. 

New weekly jobless claims are not necessarily a perfect reflection of layoffs, as some Americans who have lost their jobs may not have applied yet for unemployment benefits. The thousands of layoffs announced by companies such as Microsoft, Alphabet and Amazon are also relatively small in proportion to the natural churn of millions of layoffs and new hirings each year. 

But experts say the persistence of low weekly jobless claims is a sign that laid-off workers still have plenty of chances to find new jobs in a resilient economy. 

Sylvan explains why here. 

‘NOBODY CAN MAKE SENSE OF THEM’

Santos loans deepen questions around campaign finances 

A set of updated campaign finance reports are deepening the mystery surrounding the source of high-dollar loans that Rep. George Santos (R-N.Y.) made to his campaign last year.  

• Santos’s campaign previously reported that a pair of six-figure loans from the candidate — one for $500,000 that was made last March and another for $125,000 in October — came from his personal funds.  
  
• But in an amended filing with the Federal Election Commission (FEC) on Tuesday, Santos’s campaign unchecked a box indicating that the $500,000 loan came from personal funds. Similarly, a separate updated report left the same box unchecked for the $125,000 loan. 

Campaign finance experts are struggling to unpack the latest disclosures from Santos’s campaign, which they say are riddled with potential errors and discrepancies. 

“Nobody can make sense of them,” said Robert Maguire, the research director for Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit watchdog group. “It seems impossible at this point that there is some sort of oversight.” 

The Hill’s Max Greenwood fills us in here. 

Good to Know

The Department of Transportation is probing whether “unrealistic scheduling” played a role in the mass flight delays and cancellations from Southwest Airlines during the holidays last year.  

Other items we’re keeping an eye on: 

• The Federal Aviation Administration faces a number of challenges in the wake of the national flight grounding earlier this month while President Biden’s pick to lead the agency, who was nominated in July, has yet to even get a hearing. 
  
• The Department of Veterans Affairs (VA) says it housed more than 40,000 veterans last year, surpassing its 2022 goals aimed at reducing the number of veterans experiencing homelessness. 

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 tomorrow.