Economy Watch: McJobs, Debt Ceiling, Inflation
- Apr 05, 2011
April 5, 2011
By Dees Stribling, Contributing Editor
The Conference Board said its Employment Trends Index increased again in March, for the sixth month in a row. The index now stands at 100.9, up from February’s revised figure of 100.3, and is up over 8 percent from a year ago. It’s another indication that while not all employers are hiring (especially public entities), a good many are.
Such as the world’s second-largest restaurant chain. McDonald’s Corp. said that it will hire 50,000 new U.S. workers on a single day this month—April 19. The company is calling it “National Hiring Day,” with plans to add to its ranks from cashier to corporate positions.
Fifty-thousand at one pop will add considerably to the monthly U.S. jobs total this month, once those numbers are tabulated. But in a sense, the restaurant chain’s announcement is part publicity gambit, since it probably would have hired about that many new workers during the next few months anyway.
Geithner Warns Congress About Debt Ceiling
The next deadline for raising the federal debt ceiling is at the end of this week, and so far Congress hasn’t come up with another extension, much less a budget to last through to the end of the fiscal year. With that in mind, U.S. Secretary of the Treasury Timothy Geithner attempted on Monday to light a fire under that august body.
“The Treasury Department now projects that the debt limit will be reached no later than May 16, 2011,” Geithner noted in a letter to Congress and the various factions in that body. “This is a projection based on the expected level of tax receipts, the timing of our commitments and obligations over the next several weeks, and our judgment concerning the level of cash balances we need to operate.”
May 16 isn’t the day that the United States will start defaulting on its obligations. “If the debt limit is not increased by May 16, the Treasury Department has authority to take certain extraordinary measures… to temporarily postpone the date that the United States would otherwise default on its obligations… [but] no headroom to borrow within the limit would be available after about July 8, 2011. At that point the Treasury would have no remaining borrowing authority, and the available cash balances would be inadequate for us to operate with a sufficient margin to meet our commitments securely.”
Bernanke Downplays Inflation
Meanwhile, Fed Chairman Ben Bernanke said that he didn’t think inflation was a big deal. “I think the increase in inflation will be transitory,” he told an audience at a conference held by the Federal Reserve Bank of Atlanta. But he didn’t want to come across as ignoring the threat: “We have to monitor inflation and inflation expectations extremely closely because if my assumptions prove not to be correct, then we would certainly have to respond to that.”
Bernanke didn’t dwell on the immediate future of Fed policy, however. The growing question now is what will happen once QE2 winds down in the summer, but on the score, the central banker was silent.
Wall Street had a lackluster day on Monday, with the Dow Jones Industrial Average eking out a gain of 23.31 points, or 0.19 percent, and the S&P 500 edging up a slight 0.03 percent. The Nasdaq lost a minuscule 0.01 percent.