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Week In Politics: Job growth in a shrinking economy

SCOTT SIMON, HOST:

Something unusual going on in the U.S. economy - inflation hit a 41-year high. The output of goods and services is shrinking. But employers keep adding jobs - more than half a million last month. And wages increased 5.2% compared to a year earlier. We now turn to NPR senior editor and correspondent Ron Elving.

Ron, thanks so much for being with us.

RON ELVING, BYLINE: Good to be with you, Scott.

SIMON: So was President Biden right last week when he said we're not in a recession?

ELVING: These numbers certainly say he was right. This was double what we were expecting. So the job market is signaling anything but a recession. Still, we did have those weak numbers on growth. So the debate goes on. The official judgment comes from the National Bureau of Economic Researchers, and they are still pondering. Now, it might come down to what you mean by recession. Some people use that term when they mean they're facing challenges. That may mean high gas prices, bigger bills for rent and groceries. That's the economy for them. And they don't care what you call it. The point is that it hurts. It hurts enough that many people can't make it on one paycheck.

So part of that hiring binge we've seen this year is people getting a second job. Now, that said, a jobless rate of 3.5% is astonishingly low, and the wage increase is welcome. But both will raise labor costs for businesses, which will raise prices that will fuel more inflation. The Federal Reserve, while it loves full employment, also has to hold down inflation. So look for another big move upward in interest rates next month. And when that happens, you can expect to hear more talk about a coming recession.

SIMON: Full weak state primaries - voters in Kansas decisively defeated a referendum that would have significantly restricted abortion in that state. How do you read the vote there?

ELVING: Above all, it proved the abortion issue can boost turnout, even in states that are historically conservative and Republican. The turnout in Kansas last week was nearly double what it was in the last comparable primary. Lots of unaffiliated voters showed up to vote on this anti-abortion measure alone, and they turned thumbs down on it. Now, late yesterday, the Indiana state legislature passed new tough restrictions on abortion, although not without some exceptions. They did that in the legislature, not by referendum. And we can expect to see more legislatures doing that going forward.

SIMON: Meanwhile, in Arizona, four Trump-endorsed candidates won their races for statewide office. Was this unexpected?

ELVING: Yes, especially perhaps Senate candidate Blake Masters, who is a venture capitalist with an outspoken streak who's about to get a lot more attention. He's an incendiary figure, much like Trump. One of his ads shows him with a gun he says isn't for hunting but for, quote, "killing people." In the governor's race, a former new - TV newscaster named Kari Lake edged out a more establishment candidate. Lake said she would not have certified Biden's 2020 victory in Arizona, and some of the immigration coming from the South is an invasion. And the party's nominees for attorney general and secretary of state are also Trump-backed election deniers. So the question becomes whether these candidates are too Trumpian to win in a state that, after all, Trump lost in 2020.

SIMON: Let me ask you about Michigan. Were Democrats a little too clever for their own good when they supported a Trump-endorsed candidate over a moderate in the Republican primary?

ELVING: The moderate Republican was first-termer Peter Meijer, who voted for Trump's impeachment in 2021. His opponent, John Gibbs, had very little campaign of his own, but the Democrats paid for TV ads, saying he was too close to Trump. Of course, in the Republican primary, that gave him a boost. That was the idea. So the Democrats hope he'll be easier to beat than Meijer. But these kinds of things have a way of taking a funny bounce, Scott. And beyond that, it's hard to pose yourself as the high-minded defenders of democracy when you pull this kind of stunt.

SIMON: A jury in Austin, Texas, found - I'm not going to call Alex Jones a broadcaster - conspiracy theorist - fined him for $45.2 million in damages for lying about Sandy Hook and the massacre there. What do you see in that verdict?

ELVING: This is a Texas jury trying to mete out justice in an egregious case after a slam dunk of a trial. They first found Jones should pay 4 million in compensatory damages, but Jones may escape that by declaring bankruptcy. So the next phase is penalty damages - ten times greater - but possibly subject to a cap under Texas law. We should note this trial also exposed Jones to charges of perjury, which is a criminal offense, and there are suits pending against him in other states. So lots more to come for Mr. Jones.

SIMON: Ron Elving, thank you.

ELVING: Thank you, Scott. Transcript provided by NPR, Copyright NPR.

Ron Elving is Senior Editor and Correspondent on the Washington Desk for NPR News, where he is frequently heard as a news analyst and writes regularly for NPR.org.