News Column

Syria Crisis Obscures Big Economic News

September 13, 2013

Joseph Lawler, Washington Examiner

u.s. capitol

This was supposed to be a week dominated by economic news, with Congress returning from recess to battle over government funding, and President Obama having named a candidate to replace Ben Bernanke at the Federal Reserve.

Those events have been pushed out of the spotlight (or delayed, in the case of the Fed chair nomination) by Congress' planned votes on military action in Syria. But although the urgency and sensitivity of the Syria deliberations have pushed all other stories to the background, budget maneuvering and Fed chair positioning will still be taking place this week.

With the Republican-led House and Democratic Senate unable to agree on a budget, the House will consider a short-term resolution to avoid a government shutdown when funding runs out at the end of the month. It is not yet known what the exact terms of the measure will be, but House Majority Leader Eric Cantor penciled in a vote on a bill for later in the week.

In other congressional action to watch, Consumer Financial Protection Bureau director Richard Cordray will appear before the House Financial Services Committee on Thursday for the first time since he was confirmed to his position in July. He had previously been running the CFPB for over a year without Senate confirmation after President Obama gave him a controversial recess appointment.

Although Obama is expected to delay a decision regarding Ben Bernanke's successor at the Fed until after the situation in Syria is resolved or at least a course of action is determined, widespread belief that his former adviser Larry Summers is the frontrunner for the post continues to raise the political stakes of what is normally a routine nomination process. The New York Times editorial board weighed in on the process Friday, harshly criticizing Summers for his temperament and record on regulation and demanding that senators "tell the president that Mr. Summers would be the wrong choice." Some senators have already taken up the Times challenge: three Democrats on the committee that authorizes Fed nominations have indicated they would not vote for Summers' nomination, the Wall Street Journal reported last week. A few more announcements of opposition to Summers on the panel could jeopardize his nomination before it becomes official.

On Tuesday morning the Labor Department will release its Job Openings and Labor Turnover survey that includes key indicators of the jobs situation. Fed officials have said they look to JOLTS data, especially the rate at which workers are quitting their jobs, for clues about trends in U.S. labor markets. After a weak jobs report last Friday, it is still unclear whether the Fed has seen enough improvement in the jobs outlook to begin scaling down its stimulative bond purchases later in the month.

On Thursday the Treasury Department will report on the monthly budget situation. Treasury Secretary Jacob Lew has said that he will run out of headroom under the debt ceiling in mid-October.

And on Friday the Bureau of Labor Statistics will update the Producer Price Index, which measures inflation based on prices faced by sellers. The Census Bureau will also report on retail sales for August. After a 0.2 percent increase in July, analysts expect a 0.5 percent reading for last month.

(c) 2013 ProQuest Information and Learning Company; All Rights Reserved.

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Source: (c) 2013 ProQuest Information and Learning Company; All Rights Reserved.