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TL(PM) DIGEST: Jobs! Jobs! Jobs!
Plus America lives to default another day, U.S. rules out Ukrainian surrender, and U.S. wants to talk nuclear arms control with Moscow
1. U.S. job growth robust in May
What happened? New government data shows that U.S. employers added 339,000 jobs in May—exceeding April’s revised number of 294,000 new jobs.
Why does it matter? Despite higher interest rates, employers are clearly still looking for workers—a positive sign for the economy. Whether this trend continues remains uncertain, however, as the New York Times reports:
An open question is whether employers can continue to rebuff economic challenges—and for how long.
“While overall the jobs market performance has been surprisingly strong, I think the labor market can’t defy the gravity of Fed rate hikes forever,” said Sarah House, an economist at Wells Fargo.
The report complicates the picture for Federal Reserve, which has been raising interest rates for more than a year to temper the labor market and rein in price increases. Fed officials have indicated that the jobs report will be an important factor as they decide whether to raise interest rates again. Their next meeting is June 13 and 14.
TLP’s take: Compared to the rest of the world, the U.S. economy and job market remain strong. But American workers are understandably concerned about inflation eating into their pay, so public opinion remains negative and pessimistic about the future—and that will undoubtedly play into national politics as the presidential election season heats up.
2. Default avoided! For two more years, at least
What happened? After a series of amendment votes, the U.S. Senate voted 63 to 36 to pass legislation that suspends the debt ceiling for two years and implements a variety of spending caps. President Biden will sign the legislation today.
Why does it matter? Leave it to America’s farcically dysfunctional political system to take the debt ceiling drama all the way to the wire before doing what was necessary to avoid default—even though America’s credit worthiness should never have been threatened by Republican ideologues in the first place.
TLP’s take: Senate leaders Chuck Schumer and Mitch McConnell served the nation well in moving this bill forward quickly and without throwing the whole process into chaos with last minute changes.
Looking ahead, the artificial debt limit ceiling should be eliminated and Congress should agree to pay for all legislation it authorizes—not threaten to tank the national economy when the government runs out of money.
3. U.S. rules out cease-fires and territorial concessions to Moscow
What happened? In a speech in new NATO member Finland, Secretary of State Blinken stated that proposals for immediate cease-fires and territorial transfers to Russia would amount to a “Potemkin peace.” “A cease-fire that simply freezes current lines in place—and enables Putin to consolidate control over the territory he has seized, and rest, rearm, and re-attack—is not a just and lasting peace,” he said.
Why does it matter? Calls for an immediate cease-fire and concessions to Moscow have been part and parcel of the international discourse on Ukraine since the outbreak of war over a year ago. But such an explicit American rejection of these pro-Kremlin terms is something new, and an important marker to be laid down ahead of Ukraine’s military counteroffensive and planned peace push.
TLP’s take: Secretary Blinken makes a strong case against Ukrainian territorial concessions and immediate cease-fires with Moscow: they wouldn’t actually end the war but merely set up its next round, and they’d reward the worst sort of international aggression we know. There’s no reason to take calls for temporary pro-Kremlin deals seriously—especially considering the atrocities inflicted on Ukrainians trapped behind Russian lines.
4. U.S. declares willingness for nuclear arms talks with Russia
What happened? National Security Adviser Sullivan made clear that the United States was willing to negotiate a new nuclear arms pact with Russia despite Moscow’s ongoing war against Ukraine and its “suspension” of participation in New START, the current nuclear arms limitation agreement that expires in 2026.
Why does it matter? Existing nuclear arms control agreements expire in 2026, so work needs to start soon on any replacement deal. Beyond the war in Ukraine, moreover, China’s nuclear build up will be a factor in any negotiations—even if Beijing has thus far refused to take part in any arms control discussions.
TLP’s take: Nuclear arms control deals aren’t perfect, but they’re certainly better than the alternative of an unrestrained nuclear arms race. It remains to be seen whether Putin will take up the Biden administration’s offer here, but even if it doesn’t it’s hard to say the United States doesn’t do diplomacy when it proposes to talk to a government with which it has so many other severe issues and problems.
Just one more thing…
NASA’s Mars helicopter Ingenuity keeps on flying, over two years after its first flight over the Red Planet—some 44 flights beyond its planned five-flight proof-of concept mission.
And check out TLP editor Brian Katulis’ new podcast over at the Middle East Institute!