Driving the Day: 2/2/12
ADP announced Wednesday that 170,000 new jobs were created in January, driven largely by small businesses. The report noted 95,000 jobs were created by businesses with less than $50 million revenue, and 72,000 jobs came from medium-sized businesses with revenues between $51 million and $499 million. Only 3,000 jobs were created by large companies. While the numbers are moving in a positive direction, Macroeconomic Advisors Chairman Joel Prakken said the U.S. needs monthly gains twice as big as this in order to climb out of the unemployment hole.
Facebook Sets Historic IPO – The Wall Street Journal
Facebook filed for an initial public offering on Wednesday. The social network may be valued between $75 billion and $100 billion, putting Facebook on track to be one of the largest U.S. stock market debuts of all time. Potential buyers got their first look yesterday, which showed a $1 billion profit last year, 85% of which comes from advertising. While many are optimistic about Facebook’s promise, others are skeptical of its ability to grow into a mature, global business.
Federal Reserve Chairman Ben Bernanke will testify before the House Budget Committee today and is expected to tell legislators the economy may need more help from the Fed. This testimony comes a week after the Fed reported a full economic recovery is still at least three years away. The Congressional Budget Office estimated earlier this week that the U.S. deficit will reach $1 trillion for a fourth year in a row. Yet, Bernanke is expected to tell Congress that cutting the deficit too quickly could end up hurting the recovery.
Manufacturing in U.S. Bolsters Global Expansion: Economy – Businessweek
Manufacturing in the United States grew in January at the fastest pace in seven months, according to the Institute for Supply Management. The Arizona-based group’s index showed a climb from 53.1 in December to 54.1 in January. An index figure greater than 50 signals expansion. Production of equipment and cars is poised to continue expanding in the U.S.
On Wednesday, the House of Representatives voted to freeze federal worker wages for a third year. Supporters argue this will save taxpayers $26 billion. The previous two years of pay freezes have been implemented to trim the budget and will save the government $60 billion. The legislation must now pass the Democratic-controlled Senate.
House to Link Energy and Transportation Bills – The Wall Street Journal
The House Committee on Natural Resources voted Wednesday on measures to boost domestic energy production, including offshore and Arctic National Wildlife Refuge oil drilling and oil shale exploration. Facing a Democratic-controlled Senate, House Republicans may attach the measures to the $260 billion transportation package. These could serve as the basis for negotiations, garnering support for the Republican energy agenda in exchange for supporting the transportation bill.
In other news…
Poised for Growth, But Not Hiring – The Wall Street Journal
Rise in Start-Ups Draws Doubters – The Wall Street Journal
Payroll Tax Holiday Running Down – CNN Money