Slowing but steady job market expected in September jobs report
Douglas Sacha/Getty Images
(NEW YORK) — Concerns about inflation have increasingly turned to concerns about the job market. Last month’s weaker than expected jobs report led to turmoil in stocks.
Expectations are that Friday’s report will show 161,000 jobs added when it’s released at 8:30 a.m.
If jobs come in around expectations it would mean a slowing but steady job market. Some economists are expecting less, around 150,000, pointing out that August data can often come in worse than expected and can be revised later.
Still, a significantly worse-than-expected report could once again lead to concerns that the Fed’s rapid raising of interest rates has hurt the economy and job market more than previously known.
The Fed is on track to cut interest rates at its next meeting announcement on Sept. 18.
Fed Chair Jerome Powell last month said “the time has come” to lower interest rates.
Powell indicated the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.
While the unemployment rate remains historically low, it ticked up to 3.8% last month. A sharp downward revision of job growth estimates in June and July lowered those totals by a combined 110,000 jobs.
(NEW YORK) — In the final weeks of the campaign, former President Donald Trump and Vice President Kamala Harris have sought to best each other on the all-important issue of the economy, which many voters rank as their top concern.
Both candidates have made manufacturing a centerpiece of their plans, but their respective approaches feature stark differences.
Harris aims to close corporate tax loopholes and throw government support behind the production of critical goods. By contrast, Trump wants to protect domestic manufacturers with tariffs on foreign products while cutting corporate taxes and easing regulations.
Manufacturing accounts for about 10% of U.S. gross domestic product and an even smaller share of the nation’s jobs. But the sector bears outsized importance since the production of essential goods holds national security implications and many manufacturing workers live in key swing states, experts said.
“There’s a belief that manufacturing is special,” Mary Lovely, a senior fellow at the Peterson Institute for International Economics who studies trade policy, told ABC News.
Here’s what to know about where Harris and Trump stand on manufacturing, and what experts think of their respective plans:
Trump: Tariffs and corporate tax cuts
On the campaign trail, Trump talks about tariffs more than just about any other policy proposal. The tax on imports makes up a key part of his plan for revitalizing manufacturing, alongside a lower tax burden for companies that he says would boost production and hiring.
Trump has promised a sharp escalation of tariffs enacted during his first term. Trump has proposed tariffs of between 60% and 100% on Chinese goods. A set of far-reaching tariffs would also include a tax as high as 20% on all imported products.
In theory, a tax on imports would give domestic producers a leg up in competition with foreign manufacturers, Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.
“His plan is based on the idea that foreign competitors are pricing their products too low and what we need to do is erect a wall of tariff barriers around the U.S.,” Conlon told ABC News.
An escalation of tariffs could expand certain areas of U.S. manufacturing vulnerable to foreign competition, which could result in added jobs at companies protected by the policy, experts said.
The economy added manufacturing over the first few years of his presidency, though the pandemic wiped out much of those gains.
Experts cautioned about a spike in input costs and consumer prices that could end up hindering many manufacturers and hammering household budgets. Evidence indicates that the Trump tax cut did not provide a significant boost for the economy, they added.
U.S. manufacturers of sophisticated products like automobiles and advanced medical equipment often import raw materials. A tariff would likely raise costs for those companies and risk making them less competitive on the global market, Conlon said. While adding jobs at some manufacturers, the policy could cause layoffs at others.
“Nobody seems to have shared that wisdom with the Trump campaign,” Conlon said.
A similar cause and effect applies to prices paid by everyday people for imported goods at the grocery or department store. Broad tariffs on foreign goods would likely force importing companies to raise prices and reignite inflation, experts said.
In a statement to ABC News, the Trump campaign said its manufacturing plan would create jobs and cut taxes.
“President Trump is a businessman who built the greatest economy in American history, and certainly doesn’t need economics lessons from a professor who has never created jobs or built anything in his life,” Trump campaign spokesperson Karoline Leavitt said.
“President Trump successfully imposed tariffs on China in his first term AND cut taxes for hardworking Americans here at home — and he will do it again in his second term. President Trump’s plan will result in millions of jobs and hundreds of billions of dollars returning home from China to America,” the statement added in part.
Harris: Close tax loopholes and provide government support
Harris has proposed a different approach to manufacturing that emphasizes closing tax loopholes for some large corporations and providing government support for high-priority areas within the sector.
The agenda carries over a key part of the strategy undertaken by the Biden administration, which invested billions into manufacturing through a series of measures focused on bolstering key industries.
The Inflation Reduction Act spent hundreds of millions of dollars to boost U.S. production of renewables as the nation pursues ambitious carbon emissions goals and a supply chain less dependent on China. While the CHIPS and Sciences Act infused tens of billions into the production of semiconductors.
“The Biden administration has picked sectors, and in those sectors companies are eligible for assistance,” said Lovely.
Last week, Harris put forward a plan calling for $100 billion investment in manufacturing to further bolster the sector. The policy would prioritize “industries of the future,” such as carbon-efficient steel production and data centers for artificial intelligence, the campaign said in a statement last week.
The Harris campaign said it aims to pay for the investment with a reform of the international tax code that prevents producers from skirting U.S. taxes in a “race to the bottom.”
“The facts are clear: When he was president, Trump lost nearly 200,000 manufacturing jobs and created new incentives for companies to ship American jobs to China. Economists warn if Trump takes power again, his policies will crush American manufacturing jobs, send even more jobs to China, and cost middle class families $4,000 a year. This is a fundamental contrast with Vice President Harris, who is leading an American manufacturing boom – creating jobs right here at home and outcompeting China,” Harris campaign spokesperson Joseph Costello said in a statement to ABC News.
It remains unclear whether the support for manufacturing provided by the Biden administration has yielded significant gains in output or jobs, experts said.
The measures, however, have elicited a burst of factory construction. Spending on manufacturing-related construction surged from $76.4 billion in January 2021 to $238.2 billion in August 2024, U.S. Census Bureau data showed.
The surge in construction marks a positive signal but the critical test will be whether the plants deliver strong output and well-paying, long-term jobs, said Conlon.
“We haven’t had enough time to see if there’s a real effect or not,” he added. “How many chips are getting built by these plants? We don’t know that yet.”
(WASHINGTON) — Social media platform TikTok is hurtling toward a U.S. ban that could upend its business and frustrate more than 150 million American users — unless President-elect Donald Trump finds a way to reverse the policy.
Trump, who boasts 14 million followers on TikTok, voiced opposition to the ban earlier this year. The policy, which orders TikTok to find a U.S. parent company or face a ban, is set to take effect on Jan. 19, a day before Trump’s inauguration.
An effort to eliminate the ban may present formidable political challenges and legal hurdles, experts told ABC News. The outcome could depend on support from an array of major institutions ranging from Congress and the Supreme Court to tech giants like Google and Oracle, they added.
The China-owned app has faced growing scrutiny from government officials over fears that user data could fall into the possession of the Chinese government and the app could be weaponized by China to spread misinformation.
There is little evidence that TikTok has shared U.S. user data with the Chinese government or that the Chinese government has asked the app to do so, cybersecurity experts previously told ABC News.
TikTok did not immediately respond to ABC News’ request for comment. Neither did Trump’s transition team.
The president is expected to try to stop the ban of TikTok after he takes office, The Washington Post reported on Tuesday, citing people familiar with his views on the matter.
Here’s what to know about the different ways that Trump could try to stop the TikTok ban, according to experts:
Push Congress to repeal the TikTok ban
The most straightforward way to reverse the policy would be a repeal of the law that enacted the ban in the first place, experts told ABC News.
A repeal would require passage in both houses of Congress, landing the measure on Trump’s desk for his signature.
“The easiest way is to ask Congress to reverse the ban,” Anupam Chander, a professor of law and technology at Georgetown University, told ABC News. But, he added, it isn’t as easy as it sounds.
Congress voted in favor of the ban only seven months ago. In the House of Representatives, the ban passed by an overwhelming margin of 352-65. In the Senate, 79 members voted in favor of the measure, while 18 opposed and 3 abstained.
A repeal effort carries political risks for Trump, since it could be perceived as conciliatory toward China, in contrast with the adversarial tone voiced by Trump on the campaign trail, James Lewis, a data security expert at the Center for Strategic and International Studies, told ABC News.
“It’s a political problem,” Lewis said, noting that Trump could soften potential backlash by seeking a reform of the law rather than an outright repeal.
Trump may not need Congress to repeal the ban. A lawsuit against the ban brought by TikTok on First Amendment grounds currently stands before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit.
Experts who spoke to ABC News said they expect the court to rule against TikTok, but the company could then appeal, potentially sending the case to the Supreme Court before the ban takes effect. The Supreme Court may determine that the legal challenge holds sufficient merit to delay implementation of the ban, leading ultimately to a rejection of the law.
“The Supreme Court may want a crack at this,” Alan Rozenshtein, a law professor at the University of Minnesota who focuses on the First Amendment, told ABC News.
Refuse to enforce the TikTok ban
Instead of repealing the law or counting on court intervention, Trump could try to prevent the Justice Department from enforcing the measure, experts said.
The law orders distributors like Apple and Google to stop offering the social media platform in their app stores, and it requires cloud service providers like Oracle to withhold the infrastructure necessary for TikTok to operate.
Companies that violate the law risk a penalty of $5,000 for each user who accesses TikTok. “That adds up,” Rozenshtein said.
In theory, Trump’s Justice Department could opt against enforcement of the law, reassuring the likes of Apple and Oracle that the companies would not face prosecution in the event of a violation, experts said.
Along similar lines, the Trump administration could take up an interpretation of the ban that affords it wide latitude in finding that TikTok has complied with a requirement that it divest from parent company ByteDance, experts said.
In other words, even if TikTok has made little effort to comply with the law, the Trump administration could attempt a reading of the measure that finds the company has met the threshold necessary to avoid a ban, Rozenshtein said.
If Trump opts against enforcement, the move could still prove insufficient. Companies like Apple and Oracle may decide to comply with the ban anyway, since they could face legal risk if the Trump administration reverses its approach, Rozenshtein added.
“Trump is mercurial,” Rozenshtein said. “If you are Apple’s general counsel, do you really want this hanging over you?”
Help TikTok find a U.S. buyer
Finally, Trump could try to find a U.S. buyer for TikTok, allowing the platform to avoid a ban. This approach may appeal to Trump’s self-image as a business dealmaker, but time is running short for such a significant business transaction and TikTok has shown little appetite for it, experts said.
The law allows for a 90-day extension of the deadline for a TikTok sale, as long as the company is advancing toward an agreement. Under such a scenario, the deadline would move back to April, providing Trump with additional time.
“It’s possible that he’ll try to force TikTok to come to some kind of deal with American buyers,” Lewis said. “It’s not likely. TikTok will hold out as long as they can.”
China has signaled opposition to the sale of TikTok to a U.S. company, The Wall Street Journal reported in March.
Alternatively, Trump could seek a compromise measure in Congress that affords him additional time and wider latitude to establish a U.S.-based operation for TikTok, experts said. Or the Trump administration could offer up an interpretation of the law that gives it space to strike a compromise with TikTok.
TikTok previously proposed a solution called “Project Texas,” in which the company would keep all data on U.S. users within the country through a partnership with Oracle. When TikTok CEO Shou Chew testified before Congress last year, several members raised concern about a potential lack of third-party oversight in such an arrangement.
Trump could seek to assuage the concerns of members of Congress while reaching terms satisfactory to TikTok, Chander said.
“Trump may be able to do things that reassure the American people that the app is safe, and that it is bringing a lot of the programming here to U.S. soil,” Chander said.
(NEW YORK) — President-elect Donald Trump sharply criticized the rising price of groceries throughout his campaign, even delivering an address outside his New Jersey home in August alongside a table covered with cereal boxes, coffee grounds and ketchup.
A wave of consumer discontent appears to have helped lift him back into the Oval Office, but Trump now faces the task of how to ease voters’ frustration.
Food inflation soared to a peak of more than 10% in 2022, but price increases have slowed to about 2%, U.S. Bureau of Labor Statistics data shows.
Still, the yearslong bout of rapid inflation has sent food prices soaring more than 25% since President Joe Biden took office.
Typically, prices do not fall across the board unless the economy slows or even tips into recession, which would reduce consumer demand but also impose economic hardship, some economists told ABC News.
Still, Trump could enact policies that may slow the rise of grocery prices, or even lower the cost of some household staples, economists added.
“Prices on different items absolutely could come down,” Michael Faulkender, a professor of finance at the University of Maryland’s Robert H. Smith School of Business, told ABC News.
In response to ABC News’ request for comment, the Trump transition team said in a statement that Trump intends to fulfill the commitments he made during the campaign. But the transition team did not specifically address the issue of grocery prices.
“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail. He will deliver.” Karoline Leavitt, a spokesperson for the transition team, told ABC News.
Increase oil production
On the campaign trail, Trump often responded to concern about prices with a three-word mantra: “Drill, baby, drill.”
Trump, who has downplayed human-caused climate change, vowed to bolster the oil and gas industry by easing regulation and expanding output.
In theory, increased oil production could lower food prices since gas makes up a key source of costs throughout the supply chain, whether a firm is growing crops or transporting them to a seller, economists said.
“Energy is a big input cost for food,” David Andolfatto, an economist at the University of Miami, told ABC News. “That should put downward pressure on food prices.”
While such a move could prove beneficial, increased oil output under President Joe Biden coincided with the surge of inflation in recent years. Since oil is sold on a global market, a surge in domestic production may not lower prices for U.S. consumers as much as some may expect.
The U.S. set a record for crude oil production in 2023, averaging 12.9 million barrels per day, according to the U.S. Energy Information Administration, a federal agency.
A further uptick in oil production risks accelerating the nation’s carbon emissions and worsening the impact of climate change, which would carry costs down the road, Luis Cabral, a professor of economics at New York University, told ABC News.
“We can’t simply look at the benefits,” Cabral said, acknowledging the potential for lower food prices. “There are also important costs in terms of emissions and climate change.”
Bolster antitrust enforcement
To address high food prices, the Trump administration could crack down on market concentration, a term economists use to describe the dominance of a given industry by a handful of firms, some experts said.
They pointed to the market power of large corporations as a cause of rapid price increases, saying companies use their outsized role in the market to raise prices without fear of a competitor offering a comparable product at a more affordable price.
“Whenever there are fewer players in an industry, prices tend to be higher,” Cabral said. “Supermarkets aren’t an exception.”
Grocery store profit margins surged in 2021 and rose even higher two years later, even after price increases had begun to cool, a Federal Trade Commission study in March showed.
In February, the Federal Trade Commission sued to block the merger of supermarket chains Kroger and Albertsons, which would amount to the largest supermarket merger in U.S. history. The proceedings are ongoing, and will likely stretch into the Trump administration.
Some economists cast doubt over the potential benefits of antitrust, saying the recent bout of inflation coincided with an uptick in production costs during the pandemic. “It’s hard to argue that it’s therefore some kind of profiteering,” Faulkender said.
Price-gouging ban
During the campaign, Vice President Kamala Harris proposed a federal ban on price gouging for food and groceries.
The plan could resemble price-gouging bans in place in 37 states, which prohibit a sudden spike in prices for scarce goods, the Harris campaign said. Those bans prohibit companies from exploiting a sudden imbalance between supply and demand by significantly hiking prices.
While Trump may be reluctant to adopt a policy put forward by his proponent, he could advance a price-gouging ban as a means of preventing acute price increases for specific goods.
For instance, egg prices have skyrocketed 30% over the year ending in October, U.S. Bureau of Statistics data on Wednesday showed. The spike owed primarily to an avian flu outbreak that has decimated supply. Last year, egg prices climbed more than 60% in response to a similar avian flu outbreak.
Economists who spoke to ABC News differed on the effectiveness of a potential price-gouging ban.
Some economists dismissed the policy as a flawed solution, since state-level bans usually get triggered only in the case of emergencies and, even then, often lack clarity about the type of company behavior that constitutes price-gouging.
“I don’t think a federal price-gouging ban would help at all,” Cabral said.
Andolfatto, of the University of Miami, said a price-gouging ban could lower food prices if it barred rapid price increases under some circumstances. However, those benefits may be outweighed by the downside, since such a ban could override the market signal delivered by prices, which help direct the distribution of goods to places where they are in short supply.
“These types of interventions have unintended consequences,” Andolfatto said.
