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Celebrating Small Business Saturday

Friday, December 13, 2013  
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Your Update from the White House Business Team

Friends –

We write this week after the national memorial service in Johannesburg for former South African President Nelson Mandela. President Obama offered his remarks at the service, reflecting on what Mandela meant to him personally as well as to the people of South Africa. You can read his remarks here.

Last week here in Washington, the President delivered remarks about economic mobility in America. President Obama and members of his senior team participated in Small Business Saturday, highlighting the important role that locally owned businesses play in our communities and in the economy. The Council of Economic Advisors released a report showing the economic benefits of extending Emergency Unemployment Compensation and; the monthly Bureau of Labor Statistics report makes it clear that the recovery continues to gain traction.

As always, contact us with any questions or concerns at Business@who.eop.gov.

The White House Business Team

Ari, Marisa, and Sam

The President Addresses A Defining Challenge: Growing Inequality and A Lack of Upward Mobility in America

On Wednesday in Southeast Washington, DC,President Obama spoke aboutwhat he called the defining challenge of our time: reversing a decades-long slope toward growing inequality and a lack of upward mobility. It's a trend that has jeopardized middle-class America’s basic bargain, the idea that if you work hard, you have a chance to get ahead.

In the years after World War II, America built the largest middle class the world has ever known, President Obama said.

"Everyone’s wages and incomes were growing,” President Obama said"And because of upward mobility, the guy on the factory floor could picture his kid running the company some day.”

But by the late 1970s, this social compact began to unravel as jobs began to disappear and our economic foundation weakened. Inequality started to grow, and it got harder for children of lower-income families to move upward. Today, a family in the top 1 percent has a net worth 288 times higher than the typical family. And a child born in the top 20 percent has about a 2-in-3 chance of staying at or near the top, while a child born into the bottom 20 percent has a less than a 1-in-20 shot at making it to the top.

"The idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough,” President Obama said.

Watch the entire speech here.

President Barack Obama delivers remarks on economic mobility during an event hosted by the Center for American Progress at Town Hall Education Arts Re

President Barack Obama delivers remarks on economic mobility during an event hosted by the Center for American Progress at Town Hall Education Arts Recreation Campus in Washington, D.C., Dec. 4, 2013. (Official White House Photo by Chuck Kennedy)

Celebrating Small Business Saturday

On Saturday, November 30th, President Obama and Senior Administration Officials, along with millions of Americans around the country, paid tribute to small businesses, which drive our economy and help to define the spirit of our communities.

See how other Administration Officials, including Senior Advisor Valerie Jarrett, Attorney General Eric Holder, Commerce Secretary Penny Pritzker and many others celebrated Small Business Saturday by clicking here.

President Obama, Sasha, and Malia shop for books at Politics and Prose


President Obama, Sasha, and Malia shop for books at Politics and Prose —a local bookstore in D.C. (Official White House Photo by Pete Souza)

New Report: The Economic Benefits of Extending Unemployment Insurance

The United States economy continues to recover from the worst economic crisis since the Great Depression, and while substantial progress has been made, more work remains to boost economic growth and speed job creation. Far too many families are still struggling to regain the foothold they had prior to the crisis.

The Emergency Unemployment Compensation (EUC) program authorized by Congress in 2008 has provided crucial support to the economy and to millions of Americans who lost jobs through no fault of their own. Under current law, EUC will end on December 28, 2013.

Thursday’s reportargues that allowing EUC to expire would be harmful to millions of workers and their families, counterproductive to the economic recovery, and unprecedented in the context of previous extensions to earlier unemployment insurance programs.

See the entire report here.

America’s Manufacturing Sector Continues to Show Momentum, Growing at Fastest Pace Since Early 2011

A core component of President Obama’s agenda to grow the middle class is to make the U.S. a magnet for the location of high-quality jobs – especially those that support manufacturing and innovation. On Monday, the Institute for Supply Management released its monthly purchasing managers’ index, which rose to 57.3 in November – the fastest monthly pace of growth since April 2011, with all five components of the index showing strength, including employment. The index has shown sector expansion for six straight months and is on track to have its strongest quarter since mid-2011.

To see more about Monday’s report, and a brief recap from Gene Sperling, Director of the National Economic Council, click here.

The Employment Situation in November: Solid Job Growth Makes It Clear That the Recovery Continues to Gain Traction

Friday’s jobs report was yet another reminder of the resilience of America’s private sector following the disruptive government shutdown and debt limit brinksmanship in the first half of October. Nevertheless, Friday’s jobs numbers show that too many Americans who have been unemployed for 27 weeks or longer are still struggling to find jobs. The President also continues to work to increase overall growth while ensuring that growth is shared broadly in the form of higher wages and more mobility, which is why he is fighting for a minimum wage increase and expansion of educational opportunities.

Five Key Points in Friday’s Report From the Bureau of Labor Statistics

1.America’s resilientbusinesses have added jobs for 45 consecutive months, with private sector employment increasing by more than 8 million over that period.Today we learned that total nonfarm payroll employment rose by 203,000 in November, with 196,000 of that increase in the private sector. Private sector job growth was revised up for September (to 168,000) and October (to 214,000) so that over the last three months, private employment has risen by an average of 193,000 per month.

Private Sector Payroll Employment

2. Real average hourly earnings for private production and nonsupervisory workers rose 1.4 percent in the twelve months ending in October, the largest increase since 2009, and today’s data on nominal wages in November suggest that this growth likely continued.These data signal that the recovery in the labor market continues to progress, but are also a reminder that more work remains to boost not only job creation but also earnings. The real wage growth observed in recent months reflects both low inflation and a pickup in nominal wage growth, which continued into November, when the average private sector production and nonsupervisory worker earned $20.31 per hour, up 2.2 percent relative to a year earlier (data on inflation and real wages in November will be available on December 17). Looking over a longer period, real average hourly earnings for production and nonsupervisory workers have risen on net only about 3 percent since 1979 – a period when labor productivity rose by more than 90 percent. These statistics underscore the importance of taking steps to ensure that even as our overall economy continues to strengthen, those striving to get into the middle class are not left behind.

Year-Over-Year Change in Average Hourly Earning and Inflation

3. While many retailers add additional workers to accommodate heightened customer traffic during the holiday season, the magnitude of holiday hiring differs substantially across retail subsectors.The chart below shows the varying extent of seasonal hiring by comparing the raw, unadjusted level of payroll employment in a given sector to the seasonally adjusted level. Sectors with higher ratios can be said to exhibit a more pronounced seasonal hiring pattern. In November, the overall retail trade industry had 15,773,100 payroll positions (not seasonally adjusted), which represents 15,320,500 positions on a seasonally adjusted basis – the unadjusted level is about 3 percent higher than the adjusted level. For clothing and clothing accessory stores, the sector with the most pronounced holiday hiring effect, unadjusted employment was about 10 percent higher than the seasonally adjusted level in November. In contrast, for building material and garden supply stores, unadjusted employment was about 2 percent less than seasonally adjusted employment in November – perhaps unsurprising, since cold weather prevents Americans in many parts of the country from gardening during the winter months. While the unadjusted data can provide interesting insights into the patterns of our economy and society, the seasonally adjusted data are the best benchmark of the economy’s progress. And crucially, the seasonally adjusted data show that overall hiring in the retail trade sector has been solid in recent months, with employment rising by an average of 36,000 per month over the last six months.

Seasonal Factors Across Retail Subsectors

4. While still unacceptably high, the unemployment rate fell 0.3 percentage points to 7.0 percent, the lowest in five years, and the Bureau of Labor Statistics’ broadest alternative measure of labor underutilization also posted a notable decline.The "U-6” rate is the broadest alternative measure of labor underutilization because it includes the unemployed, persons working part-time for economic reasons, and those marginally attached to the labor force. This measure fell by 0.6 percentage point in November, the largest one-month drop on record (following a shutdown-related increase in October), and also reached its lowest level in five years. The concurrent improvement in the broadest official alternative measure of labor underutilization is another signal that the labor market is healing. The chart below shows that over time, these two series tend to move in the same direction, but that the U-6 is always substantially higher than the official unemployment rate in both recessions and recoveries.

Unemployment Rate and U-6 Rate

5. All of the reduction in unemployment in November was due to a drop in the number of short-term unemployed, while the average duration of unemployment rose to 37.2 weeks and remains markedly elevated.The median duration of unemployment has come down from its peak of 24.8 weeks to 17.0 weeks in November, but the average duration has not come down as much from its peak of 40.7 weeks. The substantial gap between the average and median duration of unemployment suggests that many of the remaining unemployed are concentrated at extremely lengthy durations of unemployment. The additional weeks of unemployment insurance offered as a result of the Emergency Unemployment Compensation (EUC) program first signed into law by President Bush in 2008 serve as an important lifeline to those who are still struggling to get back on their feet in the wake of the crisis. The critical need to extend the EUC program before it expires at the end of this year is outlined inthis report, released earlier this week by the Council of Economic Advisers and the Department of Labor.

Average and Median Duration of Unemployment

See the entire report here.


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