A blow to Build Back Better, an unexpected decline in jobs, an anticipated consumer shift to service spending, and proposed tax cuts in Connecticut are among the major business news items from the past week.
Build Back Better “dead”
Senator Joe Manchin has declared the Build Back Better Act “dead” when considered as a comprehensive bill, but demurred on whether he might support smaller bills restoring some of the legislation’s initiatives. The sweeping bill allocated funds for a range of environmental and social policy issues, including paid leave and universal pre-kindergarten.
Decreasing jobs, and declining joblessness
The payroll services provider ADP’s latest report on private payrolls found that the economy unexpectedly shed 301,000 jobs in January, with the decline attributed to disruptions caused by the COVID-19 Omicron variant. This marked the first net loss of jobs since December 2020; the Labor Department’s numbers will be released today.
Initial jobless claims nevertheless decreased for the week ending Jan. 29, falling from 261,000 the week before to 238,000. Continuing claims stood at 1.63 million for the week earlier.
A shift in consumer spending
The Wall Street Journal suggests that consumer spending on products is tapering off, possibly signaling a shift to services like travel and dining out – especially with warmer weather on the horizon and COVID-19 cases on the decline. The Commerce Department reported that consumer spending was down 0.6 percent in December, while the National Restaurant Association forecasts that sales at eateries this year will exceed pre-pandemic levels.
Connecticut tax cuts and other trends
Governor Ned Lamont has pitched a tax agenda to the Connecticut General Assembly that would cut state taxes by $336 million. The proposals take steps to reduce property taxes, but stop short of cutting sales and meal taxes.
Connecticut’s COVID-19 numbers have been falling steadily in recent weeks, raising hopes that the virus will be less of a concern in the summer. The state’s unemployment rate has fallen to 5.8 percent after a net gain of 600 jobs in December.