Mark Gongloff is off the newsletter this morning, so today's 7.5 Things are brought to you by Jillian Berman.
Thing One: Jobs Day Way Less Exciting Than Usual: Happy Jobs Day econo-nerds. This morning we all get to find out how many jobs the economy created last month. The only problem: That pesky little hurricane that hit the northeast in October may muddle the numbers. Some economists predict that hiring only picked up by about 50,000 or 60,000 jobs in November, due in large part to Hurricane Sandy, according to The New York Times. To give you a sense of how paltry that number is, employers added 171,000 jobs in October.
The storm may throw November’s jobs numbers so out of whack that today’s report could be treated as “a minor sideshow,” according to MarketWatch. This is how we’re to treat the event that economists, investors and the Twitterverse usually hold their breaths for all month? Yes, says the Washington Post. In addition to Sandy’s effects on hiring, there’s also the usual statistical randomness, seasonal adjustments for holiday hiring and the looming fiscal cliff crisis, which may have scared companies off from adding new jobs.
All of this combines to make a jobs report that will provide few clues to what is actually going on in the economy right now, making it the “least important jobs report in five years,” according to Phil Izzo of the WSJ.
Thing Two: Cliff Watch! America’s socialist President Barack Obama is trying to prevent the only people responsible for any upswings in the economy from being successful by taxing the hell out of them, at least if you ask Republicans, Fox News and some major CEOs. As it turns out, Obama’s budget proposal allows more super-rich households to avoid paying higher taxes than one might think, according The New York Times.
If Republican lawmakers were to accept Obama’s plan -- which he’s touted as raising taxes on the top two percent of Americans -- a huge share of families making more than $300,000 wouldn’t see their marginal tax rates increase.
That’s too bad, given that about two-thirds of voters say they support raising taxes on the wealthy as part of a budget deal, according to a Quinnipiac poll released yesterday. Leaders on both sides have indicated they are close to reaching a compromise to avoid triggering $1.2 trillion in tax hikes and spending cuts that could plunge the economy into recession, according to Reuters.
Thing Three: The Downside To Cheap Goods: The fire in a Bangladesh garment factory that killed 112 people last month highlights how consumer and retailer demand for cheap goods can lead to a supply chain that’s not closely monitored and includes factories that put workers at risk, The New York Times and Reuters report.
Major American and European brands often exert pressure on their Bangladeshi suppliers to make tons of clothes at super cheap prices, leading the suppliers to subcontract their work to various factories, according to Reuters. Shortly after the blaze Walmart admitted that their clothes were being manufactured at the factory, but without the company’s knowledge because a supplier had subcontracted the work to the factory in violation of Walmart’s policies.
Though Tazreen Fashions, the factory where the fire took place, had been cited for violations during inspections on behalf of various organizations, the company received orders anyway from Sears, Disney, Walmart and other brands -- an indication that the drive for cheap clothes allows factories with a history of unsafe practices to operate at the fringe of the global supply chain, according to The NYT.
Thing Four: Back In The U.S.A: America’s favorite maker of shiny toys is going to start making more of those shiny toys in America. Apple CEO Tim Cook announced yesterday that the company plans to invest $100 million next year to build Mac computers in the U.S. for the first time in about 10 years, according to the Wall Street Journal. This marks a change from Apple’s current policy of manufacturing many of its products in Chinese factories with questionable labor conditions, the Financial Times reports. It's a supply chain the company has invested billions in, but that has come under scrutiny in recent months.
Workers aren’t the only thing Apple largely keeps overseas, though: A Senate report accused the company of avoiding taxes by keeping billions in profits offshore, a policy it doesn’t appear the company is changing anytime soon.
Thing Five: CEO's Facebook Fail: We’ve all had that Facebook post we regret, but for most of us it doesn’t lead to a warning from the SEC. The regulator said it might bring a suit against Reed Hastings, the CEO of Netflix, over a Facebook post from several months ago bragging about the fact that the company had exceeded 1 billion hours of video streaming in a month for the first time, according to the Wall Street Journal. The SEC claims the post may have violated a rule that requires companies to disclose important business information to all of their investors at the same time, according to The New York Times. Because he hasn’t learned his lesson, Hastings responded to the SEC’s warning with another Facebook post.
Thing Six: Europe Still In Crisis: In case you were wondering, there is still a crisis going on in Europe. The European Central Bank cut its economic outlook for the eurozone Thursday, predicting more contraction during a period of record joblessness, according to the Financial Times. ECB President Mario Draghi said the bank considered lowering interest rates, but ultimately decided to leave them unchanged, according to Reuters. Investors, likely fueled by their desire for cheap money, took this as a sign that the bank may lower interest rates in the coming months.
Thing Seven: Mary Schapiro Defends Herself: The SEC did a great job being the “cop on the beat” under current chairman Mary Schapiro, according to Mary Schapiro. In an interview with Businessweek, the outgoing head of the agency, claims the SEC was “running a marathon at a sprint pace” during her tenure. She cites financial crisis cases and laments “all the hurdles to moving too quickly.” All of this seems rather defensive given that the agency failed to write many of its Dodd-Frank rules by the deadline, didn’t prosecute any major Wall Street executives over the financial crisis and handed out a bunch of wrist slaps, writes The Huffington Post’s Mark Gongloff.
Thing Seven And One Half: It's The End Of The Year Already: In case you’re already nostalgic about events that took place less than a year ago here is a compilation of GIFs from Buzzfeed that showcase the year 2012.
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Calendar Du Jour:
8:30 a.m. ET: Unemployment Rate and Nonfarm Payrolls for November
9:55 a.m. ET: University of Michigan Consumer Sentiment Index for December
3:00 p.m. ET: Consumer Credit for October
Heard On The Tweets:
OH MY GOD DID YOU SEE WHO GOT NOMINATED FOR GRAMMIES...zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz(snore)zzzzzzzzzzzzz(snore)zzzzzzz
— kurt braunohler (@kurtbraunohler) December 6, 2012
Is there a way to make Private Session permanent in Spotify so as to stop accidentally revealing Jamiroquai habit? Asking for a friend.
— Kevin Roose (@kevinroose) December 6, 2012
If we're honest with ourselves, we'll admit the Mayans were wrong. The world actually ended the day the Kardashians got their own TV show.
— Epicurean Dealmaker (@EpicureanDeal) December 6, 2012
When I die I want to come back as an everything bagel.Then I know I will be loved.
— Jim Gaffigan (@JimGaffigan) December 6, 2012
Calendar and tweets rounded up by Alexis Kleinman.