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By Eli Okun |
Presented by |
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THE CATCH-UP |
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A surprisingly strong jobs report makes a path to interest rate cuts harder for Fed Chair Kevin Warsh. | Anna Moneymaker/Getty Images |
JOBS DAY: The May jobs report shows U.S. hiring surged past expectations, providing a boost to both Americans’ financial fortunes and Republicans’ political ones. Employers added 172,000 jobs last month, more than double economists’ forecasts. New revisions pushed March’s and April’s jobs numbers collectively 93,000 higher. The unemployment rate held steady at 4.3 percent. It all adds up to a rejuvenating labor market in the wake of a tepid 2025. “The hiring recession is over,” economist Heather Long declared. The robust report makes clear that at least one key plank of the U.S. economy found solid footing after a year of policy and geopolitical shocks, including President Donald Trump’s tariffs, the Iran war, the immigration crackdown and DOGE. At the same time, wage growth slipped to a five-year low of 3.4 percent, falling further behind the pace of war-fueled inflation. So even as Americans find it easier to get hired and companies expand, their real income is taking a hit — compounding cost-of-living concerns that have dominated American (and global) politics for two consecutive presidential administrations. Those two trends of strengthening employment and worsening inflation could put the squeeze on new Fed Chair Kevin Warsh, who takes the reins at his first central bank meeting in two weeks. Trump has long pressured the Fed to lower interest rates and juice the economy, but ebbing concerns about jobs and rising worries about costs both cut the other way. In fact, markets today saw rising expectations the Fed will raise rates by year’s end, though the central bank is forecast to keep them unchanged this month. Trump was frustrated that stock markets fell today, in anticipation of rates staying high. Under the hood: The May jobs gains were more broad-based than in some recent months, a sign of growing economic health, with the leisure/hospitality, local government and health care sectors leading the way. Some of those numbers may have been boosted by a stretch of good weather and preparations for hosting the World Cup. Most of the economy is hiring now, though finance was a rare weak spot. Victory lap: “This is about the strongest market of my lifetime,” National Economic Council Director Kevin Hassett championed on CNBC, saying Republicans’ tax cuts and other policy moves helped fuel jobs growth — and that the Fed doesn’t need to act on inflation yet. But but but: The economy may still not feel particularly strong for Americans struggling with affordability at the gas pump, grocery store and housing market. We’ll get a clearer picture of inflation when the next Consumer Price Index report comes out Wednesday. Affordability worries led the Trump administration to slow-roll HHS Secretary Robert F. Kennedy Jr.’s food-system reforms, WSJ’s Jesse Newman and Liz Essley Whyte report. And concerns about artificial intelligence dangle over many white-collar workers, especially new college graduates. “Voters think President Donald Trump’s economy is the pits,” POLITICO’s Sam Sutton puts it. “The labor market is telling a very different story.” The next economic flashpoint to watch: The U.S.-Mexico-Canada Agreement has a July 1 renewal deadline, but the countries aren’t likely to land a deal by then, Bloomberg’s Josh Wingrove and Brian Platt report. That could lead to extended North American trade negotiations and uncertainty, with significant effects for jobs, tariffs and manufacturing. Happy Friday afternoon. Thanks for reading Playbook PM. Drop me a line at eokun@politico.com.
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A message from Vapor Technology Association: The science is clear: Vaping saves lives, and youth vaping is at historic lows. Now Acting FDA Commissioner Diamantas must fix the broken system to save vaping: establish predictable scientific guidelines for PMTA review, enforce against illicit products that fail those standards, and protect adult Americans relying on flavored vapes to quit smoking. FDA policy must change to catch up to its own data. The window is open — act now. |
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7 THINGS YOU NEED TO KNOW |
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1. INTELLIGENCE QUOTIENT: Acting DNI-designate Bill Pulte didn’t have a security clearance for highly classified information when he was named to the job, CNN’s Zachary Cohen and colleagues report. The administration started the vetting process only yesterday. That reflects just how unusual a choice Pulte, who lacks national security experience and has been principally known as a controversial Trump attack dog, is for the role. Good luck with that FISA extension: Trump told WSJ’s Brian Schwartz he wants Pulte to clean house with large-scale firings of federal workers in the intelligence community. That Pulte won’t be permanent or Senate-confirmed means “you’re less shackled” to implement a big shakeup, Trump said. That could raise more concerns among critics that Pulte will politicize intelligence. More fallout: When Pulte takes over the nation’s intelligence community, the second full-time job could distract from his drive as Federal Housing Finance Agency director to spin off Fannie Mae and Freddie Mac, CNN’s Samantha Delouya reports. 2. IMMIGRATION FILES: After the splashy announcement that the U.S. would force many green-card applicants to leave the country to seek permanent residency, administration officials are now quietly retreating, WaPo’s Lauren Kaori Gurley and Ian Duncan report. A significant, under-the-radar lobbying push from the business world raised concerns and the administration softened, quietly clarifying that a majority of work visas and applicants won’t be affected. The thin veil between life and death: Former top Social Security Administration official Jeremiah Schofield is going public with an extraordinary whistleblower claim — that an immigration-enforcement plan would have reclassified some 2.7 million living people as dead, WaPo’s Meryl Kornfield reports. The idea from DOGE last year was to force immigrants out of the financial system to make their lives harder, and some U.S. citizens were included in the database. Ultimately the plan wasn’t implemented. Border song: A gusher of federal spending on contracts to build the border wall ramped up to more than $16.3 billion in the past half-year, WaPo’s Arelis Hernández and colleagues report. And the majority of the money went to two experienced firms with GOP ties, part of a faster but less transparent bidding process. 3. BRAVE NEW WORLD: “A bipartisan AI deal gets a brutal reality check,” by POLITICO’s Brendan Bordelon and colleagues: “Washington’s most ambitious attempt at a grand compromise on artificial intelligence oversight is most likely doomed for this year. Rising opposition from key Democrats, skepticism from Republican leadership and persistent aloofness from the White House are among the existential threats facing the 269-page draft bill that Reps. Jay Obernolte (R-Calif.) and Lori Trahan (D-Mass.) unveiled Thursday.” 4. HEADS UP: Orange County, Florida, Mayor Jerry Demings today suspended his gubernatorial bid, saying he had to exit the race after being diagnosed with prostate cancer this week, per the Orlando Sentinel. That leaves David Jolly as the main Democrat in the race. 5. PRIMARY COLORS: Amid Graham Platner’s scandals, a source in Maine Gov. Janet Mills’ orbit floated to CNN’s Patrick Svitek that “people across Maine are reaching out to tell her they’re voting for her and encouraging her to get fully back into the race.” Behind the scenes: Senate Minority Leader Chuck Schumer hasn’t publicly weighed in on the Michigan Senate race, but he’s privately backing Democratic Rep. Haley Stevens, seeing her as the strongest pick for November, NYT’s Teddy Schleifer and Reid Epstein report. Donors are starting to heed his advice. Empire State of Mind: As Rep. Adriano Espaillat (D-N.Y.) tries to fend off a primary challenge from Darializa Avila Chevalier, Black political power brokers in Harlem — and their high-turnout voter base — may be essential to deciding the winner, NYT’s Sally Goldenberg and Maya King report. Espaillat, who’s more rooted in Dominican American neighborhoods north of Harlem, has a history of tension with some Black leaders he beat in 2016. But House Minority Leader Hakeem Jeffries and Gov. Kathy Hochul tried to shore up his support. The new GOP: Next week’s open-seat Republican House primary in northern Nevada drew a crowded field to the 2nd District, but the two frontrunners present different visions, AP’s Jessica Hill reports from Reno. Former state Sen. James Settelmeyer is a well-known conservative with deep roots in the party establishment, but Trump recently got behind retired Lt. Col. David Flippo, a newcomer. 6. 2027 DREAMING: “Democrats ramp up plans to investigate Trump through corporate America,” by Semafor’s Nick Wu: “Progressive and centrist Democrats are remarkably aligned around their plan for using a potential House majority to investigate President Donald Trump: Pursue businesses that have cultivated his administration for backdoor oversight, and don’t hold back. … Foreign dealmaking by the Trump family and its allies, including in the Gulf, is also in line for Democratic scrutiny.” 7. HOSTAGE NEGOTIATIONS: Multiple Americans being held at Iran’s Evin Prison are suffering from insufficient medical care, one of the men said in a recording obtained by CBS’ Margaret Brennan. The State Department believes Iran has six Americans detained, at least some of them wrongfully. But the provisional peace agreement the two countries are negotiating would not address their fates in the first phase, given the talks’ complexity.
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A message from Vapor Technology Association: Youth vaping is at its lowest level in over twelve years — a direct result of common-sense restrictions that the vapor industry championed. The FDA's own data tells a clear story. Yet policy has failed to keep pace with science.
With new leadership now in place, Acting Commissioner Diamantas has a narrow and consequential window to deliver real reform built on three pillars: transparent, evidence-based scientific standards for PMTA review so e-cigarette manufacturers know exactly what is required; consistent enforcement against bad actors failing those standards— the actual source of the problem; and surgical enforcement criteria that target predatory design and youth-facing marketing, not the compliant products millions of American smokers depend on.
Protecting youth and preserving adult consumer access are not competing goals. A real and well-designed regulatory framework achieves both. The science is clear. The leadership is in place. It's time to fix the system and save vaping. |
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TALK OF THE TOWN |
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BIG NEWS AT ‘60 MINUTES’ — Amid turmoil at the legendary CBS program, correspondents Lesley Stahl, Bill Whitaker and Jon Wertheim announced they’re staying at the show. In a joint memo, they condemned their colleagues’ firings and said their continuation is “categorically” not “an endorsement of the existing power structure” under Bari Weiss. But they said they didn’t want the show to fall apart: “We want to stay and fight, try to repair and preserve our reputation.” More from Variety PLAYBOOK METRO SECTION — A new WaPo-Schar School poll finds D.C. Council Member Janeese Lewis George opening up an 11-point lead over Kenyan McDuffie in the Democratic mayoral primary, per Jenny Gathright and colleagues. She’s bolstered by strong showings with progressive, young and white voters. But one-fourth of the electorate hasn’t made up its mind yet. OUT AND ABOUT — Meridian International Center hosted its sixth annual Culturefix and awards dinner last night, honoring Reem Acra, Jeff Koons, Zahi Hawass, Breezy Johnson, Chris Lillis and Ilia Malinin. Also SPOTTED: Egyptian Ambassador Motaz Zahran, Omani Ambassador Talal Al Rahbi, Lebanese Ambassador Nada Hamadeh, Ana Irene Delgado, Elizabeth Duggal, Manisha and Roy Kapani, David Bohigian, Dina Powell McCormick, Claire Turner, Marlene Malek, Deborah Lehr, Phil Mattingly, Tham Kannalikham, Hervé Pierre, Stuart Holliday, Heather Florance, Fred Hochberg and Tom Healy, David Cohen, Jade Shields, Grace Bender, John and Rory Ackerly, Shannon Sprenger, Cate Dillon, Caroline Landau, Amna Nawaz, Travis Smith Parker, Melissa Chiu and Emily Carwell. — Widehall hosted a “Bold Bets in Healthcare” conference this week at the Willard Intercontinental, which featured Steve Clemons doing 29 back-to-back interviews. SPOTTED: Chris Klomp, Calley Means, John Brooks, Reps. Rich McCormick (R-Ga.), Buddy Carter (R-Ga.), Danny Davis (D-Ill.), David Schweikert (R-Ariz.), Meena Seshamani, Gloria Sachdev, Alicia Jackson, Wayne Frederick, Beong-Soo Kim, Rory Kelleher, John Crowley, Thomas Engels, Sudip Parikh, Jonathan Epstein, Jessica Baladad, Ashish Jha, Tom Polen, Garth Graham, Priyanka Agarwal, Brad Wenstrup, Nicolette Louissaint and Derek Asay. — Disney hosted its Disney Veterans Institute at the Motion Picture Association yesterday, talking about its Heroes Work Here initiative and strategies for giving veterans and their families jobs, training and support. SPOTTED: Mickey Mouse, VA Secretary Doug Collins, Patrick Murphy, Horacio Gutierrez, Tinisha Agramonte, Susan Fox, Bill Bailey, Troy Dow, Tom Kastner, Steve Beynon, Rick Klein, Brian Alvarado, Chantal DeWall, James Rodriguez, Kelsey Baron, Beth Conlin, Julian Purdy, Sarah Blansett, Eric Eversole, Brian Iglesias, Jeremy Yost, Mahalia Clemons and Shannon Razsadin. TRANSITION — Madi Biedermann has been appointed chief of staff at the Education Department, the role she’s previously held on an acting basis. WELCOME TO THE WORLD — James Gelfand, president and CEO of the ERISA Industry Committee (ERIC), and Tegan Gelfand, senior director and head of federal affairs and policy at Ferring Pharmaceuticals, welcomed Theseus Antony Gelfand on May 28. He joins big brothers Ajax and Leo. Pic … Another pic Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us on Signal here. Playbook couldn’t happen without our editor Giuseppe Macri and deputy editor Garrett Ross. Correction: Yesterday’s Playbook PM misspelled Sen. Lindsey Graham’s (R-S.C.) name. |
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