Utah European Cash Advance

The Huddle: 'Casino capitalism'

 (with assists from Jonathan Allen and Kevin Robillard)

( swong@politico.com or @scottwongDC)

SENATE SENDS MESSAGE TO VETS -- “With partisan sniping dominating deficit supercommittee negotiations, Senate Democrats and Republicans called a brief cease fire Thursday to pass two pieces of President Barack Obama’s jobs plan — the first measures of the once-rejected American Jobs Act that are likely to become law. …” I write for POLITICO. “On the eve of Veterans Day, the Senate voted 94-1 to approve a bill providing tax credits to firms that hire unemployed or disabled veterans. Sen. Jim DeMint (R-S.C.) cast the lone no vote, arguing the government shouldn’t “privilege one American over another when it comes to work.” That legislation was successfully attached to a separate House-passed bill that repeals a rule requiring governments to withhold a small percentage of payments to contractors. The repeal bill passed the Senate Thursday without dissent. Since the repeal bill was amended, it now heads back to the House, which is expected to finally approve the measure and send it to the president for his signature when members return to Washington next week.”

-- GOP jobs plan rejected. “Thursday’s votes marked the first time the Democratic-controlled Senate had passed individual pieces of Obama’s jobs plan. Since Republicans filibustered the sweeping jobs package last month, Democrats have been trying to advance the legislation, plank by plank. In recent weeks, though, a united GOP caucus had blocked two individual pieces of the package that provided funding for teachers, first responders and infrastructure projects, objecting to a proposed tax on millionaires Democrats had proposed to pay for the spending. Democrats repaid the favor to Republicans Thursday, blocking [a] GOP jobs plan 40-56, with all Democrats and four moderate Republicans — Scott Brown of Massachusetts, Lisa Murkowski of Alaska and Susan Collins and [Olympia] Snowe, both of Maine — voting no. Freshman Sen. Mike Lee (R-Utah) voted present. http://politi.

News In U.S. Still Better Than Europe

With yields on Italian government bonds moving back up towards the scary 7% level following Mario Monti’s troubles in gaining parliamentary traction with the technocratic government, all-too-familiar European headlines will now be escaping. Italy fears aside, we also hear disconcerting economic growth news out of Europe this morning.

But unlike the constant barrage of negative news out of Europe, the U.S. economic scene is a lot more reassuring. We got a better-than-expected Retail Sales report this morning, and the PPI report is pointing towards fairly benign inflationary pressures. We also have a couple of reassuring earnings reports from bellwether retail companies this morning.

Of today’s domestic economic releases, the most reassuring is the continued resilience on the consumer spending front. We got a better-than-expected 0.5% increase in October Retail Sales, which is a solid performance following the impressive September gains. ‘Core’ Retail Sales, which excludes automobile and gasoline sales data, also came in better than expected.

The Retail Sales report is admittedly not a perfect proxy for consumer spending since it only includes ‘goods’ sales at retail establishments and leaves out the much bigger consumer outlays on ‘services’. But it nevertheless provides valuable clues to trend in consumer spending, which is the backbone of the U.S. economy. Today’s Retail Sales report shows that the positive consumer spending trend of the third quarter has carried into the current quarter.

In other economic releases, the bigger-than-expected drop in the PPI reading shows that pricing pressures at the wholesale level remain tame. On a ‘headline’ basis, PPI declined 0.3% in October, after increasing 0.8% in September. The ‘core’ PPI reading, which strips out the food and energy components, remained unchanged from the prior month’s level.

Inflation readings, like today’s PPI and Wednesday’s CPI, have been elevated lately and account for part of the disagreement within the FOMC about the conduct of monetary policy. But today’s favorable reading, if sustained in the CPI report, will remove this key argument from the hawks’ arsenal. In this context, this report is favorable to further quantitative easing action from the Fed.

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