Morning Money Memo…
The jobs market is heating up with a stronger than expected June employment report today from the Labor Department.
The U.S. economy added 288,000 jobs and the unemployment rate dropped from 6.3 percent to 6.1 percent. June was the fifth month in a row when more than 200,000 new jobs were added. That’s stronger than last year’s jobs market.
“I don’t see any reason why this shouldn’t continue, even improve,” said Mark Zandi, chief economist at Moody’s Analytics. “Early in the economic recovery, most of the job growth was among low-paying jobs. Now, it’s high-paying jobs and even some middle-paying jobs. A lot of that’s related to what’s going on in housing and construction and government.”
Businesses are taking on more workers and limiting job cuts. Jobs were added in health care, professional and business services, retail, bars and restaurants. Some local government jobs were also added, primarily in the education sector.
The workforce participation rate remained the same, which was not so encouraging. An increase in this rate would be another strong sign for the job market.
The global outplacement consulting firm Challenger, Gray & Christmas said, “June job cuts were 20 percent lower than the same month a year ago.”
Obama: Banks Need More Rules
Almost four years after Congress passed the Dodd-Frank reform bill in response to the financial crisis, banks are still in need of more rules, President Obama said.
Bank customers need to be better protected against failed risk-taking, he said, adding that bank traders can still make huge bonuses on high-risk trades. If the bets go bad, the president told APM’s Marketplace, “everybody else is left holding the bag.”
Obama did not specify what changes he would recommend. Recently, he has met with groups of economists, including Stanford’s Anat Admati, who has called for banning large banks from making payouts to shareholders until they can better deal with any losses.
Amazon vs. FTC Over Sales to Kids
Amazon appears prepared to go to court against the Federal Trade Commission. The online giant is defending itself against charges that it has not done enough to prevent children from making unauthorized in-app purchases.
Amazon said it had already refunded money to parents who complained. Apple agreed to a $32.5 million fine in January over a similar matter.
Silicon Valley venture capitalist Tim Draper has snapped up nearly 30,000 bitcoins in a government auction. He plans to sell the digital currency in countries trying to build stronger economies. Draper prevailed over 44 other bidders registered for an auction of bitcoins seized last year from Silk Road, a website that stockpiled the currency while selling illegal drugs.
China Loosens Up on Currency
China has announced a new step toward easing its tight currency controls, allowing banks to set their own exchange rates in dealings with customers. Today’s announcement was the latest in a series of moves intended to make China’s government-controlled financial system more market-oriented.