Driving the Day: 11/15/12

Nov 15, 2012

Need to know…

  • President Talks with Business Leaders As Fiscal Cliff Nears. Business leaders met with President Obama on Wednesday to discuss the looming fiscal cliff and the outlines of a deficit reduction deal. The president emphasized he would not allow middle class tax cuts to expire but did not reveal a detailed plan or his proposal for a new corporate tax rate. The meeting was intended to begin rebuilding a relationship with American businesses that has been strained by the president's anti-business rhetoric, excessive regulations, and plan to increase taxes on the wealthy. Separately, a group of 200 business groups, including the U.S. Chamber, sent a letter to the president and Congress pushing for the extension of tax cuts for every income bracket and fundamental reforms to entitlement programs.
  • U.S. Jobless Claims Rising. Jobless claims increased this week, according to the Labor Department’s weekly report. Data shows seasonally adjusted initial claims reached 439,000, a 78,000 increase from last week. The national unemployment rate continues to hover near 8%, with deficit reduction talks and the threat of higher taxes depressing hiring and business expansion. Hurricane Sandy also had an impact on employment. Workers on the East Coast who lost their job in the storm's aftermath are beginning to file, though the Labor Department reports it could take several weeks to see the full effect on employment.
  • Uncertainty Driving U.S. Markets Towards Correction. The imminent fiscal cliff is taking a toll on U.S. markets. On Wednesday, the Dow Jones industrial average and Standard & Poor's 500 index fell to their lowest levels since the summer. The Nasdaq composite also fell to 10.6%, making it the first major index to approach a correction. Investor sentiment has weakened as uncertainty grows and Washington moves slowly towards avoiding $600 billion in automatic tax hikes and spending cuts, set to go into effect at the end of the year.

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