Business

OVERNIGHT MONEY: Economy poised to add 180,000 jobs

by Vicki Needham - 02/01/13 12:10 AM ET

On Wednesday, the government said the economy contracted last month because of huge cuts in defense spending in the final three months of the year.

But housing, business investment and consumer spending were all strong, giving economists reason to be optimistic for the economy’s prospects this year despite a looming batch of spending cuts scheduled to start in March.

{mosads}Even better, job growth is broad-based across many industries, even construction, which was hit hard during the prolonged downturn.

In the past few months, manufacturing, which had led the recovery, has slowed. But Zandi expects the sector to pick up pace this year and look more positive by the summer.

Even through the “fiscal cliff” debate, employers have continued to hire despite the uncertainty.

The private sector added 192,000 jobs in January — more than was estimated, and a sign of the labor market’s continuing recovery despite fiscal obstacles, according to the ADP National Employment Report released on Wednesday.

John Engler, president of the Business Roundtable, said Thursday that if Congress and the White House would “stop lurching from crisis to crisis” it would create more certainty among businesses and consumers and provide a lift to the economy.

He and the group’s chief executives are hoping Congress can find an alternative to the scheduled sequester, which “blindly cuts across the board,” and get back to a budget process that will give companies a break from worrying about the nation’s fiscal future.

Leaders in both chambers have vowed to get budgets approved with the risk looming of losing their salaries.

But while Engler didn’t seem too worried about the recent gross domestic product figure, he suggested that maybe the low figure will provide some inspiration to lawmakers that would “promote action and produce compromise.”

BREAKING NEWS

Suspended ceiling: The Senate on Thursday passed legislation that prevents the U.S. from hitting its $16.4 trillion debt limit until May 19, sending the legislation to President Obama.

In a 64-34 vote, the Senate approved the House-passed bill that suspends the debt ceiling until May 19, pushing the debt-ceiling debate until the summer.

Republican Sens. Kelly Ayotte (N.H.), Roy Blunt (Mo.), Thad Cochran (Miss.), Susan Collins (Maine), Lindsey Graham (S.C.), Dean Heller (Nev.), John Hoeven (N.D.), Lisa Murkowski (Alaska), Richard Shelby (Ala.), John Thune (S.D.) and Roger Wicker (Miss.) voted with the Democratic Caucus to pass the legislation. Two Democrats — Sens. John Kerry (Mass.) and Patty Murray (Wash.) — missed the vote.

CABINET WATCH

Throwing out names: The Business Roundtable said Thursday it would support Penny Pritzker for Commerce secretary and Jeff Zients for U.S. Trade Representative.

Pritzker, a billionaire businesswoman from Chicago, reemerged this week as a leading candidate for the top slot at Commerce.

Amid questions about the lack of chief executives in the Cabinet, President John Engler said Pritzker would be “a solid business voice.”

Zients, who is working at the Office of Management and Budget (OMB) and has two decades of high-level business experience, is “very capable” and “I think we’d find him very good to work with,” Engler said.

Lew’s view: Treasury Secretary nominee Jack Lew is getting used to the spotlight on Capitol Hill. After talking to Lew on Thursday, Alaska Sen. Mark Begich (D) introduced legislation that would share federal energy revenues generated off Alaska’s coasts with Alaska’s state and local governments as well as Alaska’s native peoples.

Begich highlighted for Lew the significant revenues federal, state and local governments can secure with expanded oil-and-gas development in Alaska’s Arctic.

“I conveyed my long-held support of tax reform to Jack Lew today, but I also reminded him that if we really want to fix our convoluted tax code we must look at the big picture instead of singling out politically easy targets,” Begich said.

Begich also expressed support for Lew, who has served as director of the Office of Management and Budget and spent the last year as the White House of chief of staff.

“During his time both at OMB and the White House, Jack has demonstrated the knowledge and experience to be an effective Treasury secretary. I look forward to continuing our conversation about my revenue sharing bill, budget issues, taxes, and other key economic issues.”

But while Democrats seem to broadly support Lew’s confirmation, Republicans remain cautious in offering their backing.

Senate Finance Committee ranking member Sen. Orrin Hatch (R-Utah) said it’s likely to take another month before a hearing is scheduled on Lew’s nomination. He expressed some concern on Thursday that the nominee may not have enough Wall Street experience for the job.

ECONOMIC INDICATORS

Construction Spending: The Commerce Department releases its December report on spending that is broken down between residential, non-residential and public expenditures on new construction. The monthly changes are volatile and subject to huge revisions and rarely move the markets.

ISM Index: The Institute for Supply Management will release its January index that measures the manufacturing sector’s pace of growth.

Michigan Sentiment: Thomson Reuters/University of Michigan will release its final measure of consumer sentiment for January.

WHAT YOU MIGHT HAVE MISSED

— GOP senators look to freeze work at agencies after court rejection of recess appointments
— Roundtable chief: Obama might back move to territorial taxation
— Lawmaker presses Treasury not to unwind ‘extraordinary measures’ during debt-ceiling suspension
— Justice Department opposes big brewers merger, sues to keep beer prices down
— House Republicans look to warn small business about regulations
— White House to shut down jobs council
— Warren, Cummings, Waters launch probes into Fed foreclosure settlement
— Finance sector expects profits and regulatory headaches in 2013