Economic Memo: Employment Data May Be the Key to the President’s Job

Seventeen months before the next election, it is increasingly clear that President Obama must defy that trend to keep his job.

Roughly 9 percent of Americans who want to go to work cannot find an employer. Companies are firing fewer people, but hiring remains anemic. And the vast majority of economic forecasters, including the president’s own advisers, predict only modest progress by November 2012.

The latest job numbers, due Friday, are expected to provide new cause for concern. Other indicators suggest the pace of growth is flagging. Weak manufacturing data, a gloomy reading on jobs in advance of Friday’s report and a drop in auto sales led the markets to their worst close since August.

But the grim reality of widespread unemployment is drawing little response from Washington. The Federal Reserve says it is all but tapped out. There is even less reason to expect Congressional action. Both Democrats and Republicans see clear steps to create jobs, but they are trying to walk in opposite directions and are making little progress.

Republicans have set the terms of debate by pressing for large cuts in federal spending, which they say will encourage private investment. Democrats have found themselves battling to minimize and postpone such cuts, which they fear will cause new job losses.

House Republicans told the president that they would not support new spending to spur growth during a meeting at the White House on Wednesday.

“The discussion really focused on the philosophical difference on whether Washington should continue to pump money into the economy or should we provide an incentive for entrepreneurs and small businesses to grow,” said Eric Cantor, the majority leader. “The president talked about a need for us to continue to quote-unquote invest from Washington’s standpoint, and for a lot of us that’s code for more Washington spending, something that we can’t afford right now.”

The White House, its possibilities constrained by the gridlock, has offered no new grand plans. After agreeing to extend the Bush-era tax cuts and reducing the payroll tax last December, the administration has focused on smaller ideas, like streamlining corporate taxation and increasing American exports to Asia and Latin America.

“It’s a very tough predicament,” said Jared Bernstein, who until April was economic policy adviser to Vice President Joseph R. Biden Jr. “Is there any political appetite for something that would resemble another large Keynesian stimulus? Obviously no. You can say that’s what we should do and you’d probably be right, but that’s pretty academic.”

More than 13.7 million Americans were unable to find work in April; most had been seeking jobs for months. Millions more have stopped trying. Their inability to earn money is a personal catastrophe; studies show that the chance of finding new work slips away with time. It is also a strain on their families, charities and public support programs.

The Federal Reserve, the nation’s central bank, has the means and the mandate to reduce unemployment by pumping money into the economy.

As financial markets nearly collapsed in 2008, the Fed unleashed a series of unprecedented programs, first to arrest the crisis and then to promote recovery, investing more than $2 trillion. The final installment, a $600 billion bond-buying program, ends in June.

Now, however, the leaders of the central bank say they are reluctant to do more. The Fed’s chairman, Ben S. Bernanke, said in April that more money might not increase growth, but there was a growing risk that it would accelerate inflation.

Congress charged the Fed in 1978 with minimizing unemployment and inflation. Those goals, however, are often in conflict, and the Fed has made clear that inflation is its priority. Fed officials argue in part that maintaining slow, steady inflation forms a basis for enduring economic expansion.

Eric S. Rosengren, president of the Federal Reserve Bank of Boston, said in a recent interview that the Fed had reached the limits of responsible policy.

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Virulent E. Coli Strain Spreads in Germany and Puzzles Health Officials

The source of the outbreak, which has killed at least 16 people — 15 in Germany and a Swede who visited there recently — remained unknown.

Public health officials are alarmed because a startlingly high proportion of those infected suffer from a potentially lethal complication attacking the kidneys, called hemolytic uremic syndrome, which can provoke comas, seizures and stroke. Dr. Robert Tauxe, deputy director of food-borne disease at the Centers for Disease Control and Prevention in Atlanta, said the rate of cases of acute kidney failure in the outbreak was unprecedented. “That makes this an extraordinarily large and severe event,” he said.

While most of the infections were among people who had traveled to northern Germany, the authorities acknowledged that the outbreak had spread to virtually every corner of the country.

Shoppers and vegetable sellers in Berlin expressed a blend of confusion, anger and stoicism; about 20 cases of E. coli infection have been reported in the capital city. “A lot of people are afraid or worried,” said Nursan Usta, 43, who runs a fruit and vegetable stall in Berlin’s blue-collar Neukölln district. “They aren’t even buying cherries” — even though the authorities have mentioned only cucumbers, lettuce and tomatoes as potential sources of infection. In Motril, a town in Spain’s agricultural heartland, greenhouses were empty of workers as demand for vegetables collapsed after the German authorities initially — and most likely mistakenly — pointed to Spain as a source of the outbreak.

“Working in a greenhouse can be tough, but I’ve never felt more exhausted and empty inside than now,” said Miguel Rodríguez Puentedura, who had been picking cucumbers until Monday, when the greenhouse that employed him shut down.

Health officials in Hamburg, the center of the outbreak, appealed Wednesday for donors to contribute blood.

Scientists are at a loss to explain why this little-known organism, identified as E. coli 0104:H4, has proved so virulent.

The European authorities have reported several differences from previous outbreaks, including that women make up more than two-thirds of those affected and that young and middle-aged adults account for a very high percentage of the most severe cases. Dr. J. Glenn Morris, director of the Emerging Pathogens Institute of the University of Florida, said that the German strain might have undergone genetic changes or mutations to make it more potent.

The high number of cases of acute kidney failure represents a much higher percentage of the total number of illnesses than in previous outbreaks associated with different strains of E. coli. Generally, 5 to 10 percent of E. coli illnesses result in this complication. Among the confirmed cases, according to the Robert Koch Institute, Germany’s disease control agency, 470 people had been diagnosed with the kidney syndrome.

That could be because German doctors are using a broader definition of kidney failure that captures more cases. Or it could mean that the total number of illnesses is much greater than has so far been revealed, which ultimately would lower the percentage of acute cases. Or it could be a signature of this form of E. coli.

There are many types of E. coli, most of which are harmless. But a small number have come under increasing scrutiny as dangerous pathogens. These all produce a poison known as shiga toxin and generally have the ability to cling to a person’s intestinal wall, allowing them to release the poison in large enough amounts to make people sick.

Dr. Phillip Tarr, a professor of microbiology at the Washington University School of Medicine in St. Louis, said that there were two main forms of shiga toxin found in E. coli, and that the strain detected in the outbreak in Germany appeared to have the more potent version. But he said the organism appeared to have other quirks that made it unusual, and potentially difficult to detect by conventional means.

“This outbreak is still evolving, and everyone is still in the fog of case definition,” Dr. Tarr said. With the source of the contagion unknown, the Robert Koch Institute on Wednesday warned against eating “raw tomatoes, cucumbers and lettuces to prevent further cases,” particularly in northern Germany.

European and German officials pledged to track down the cause of the outbreak and to pinpoint where in the food supply chain the contamination had taken place. “Hundreds of tests have been done,” the German agriculture minister, Ilse Aigner, said in a television interview. So far, those tests had determined that “most of the patients who have fallen ill ate cucumbers, tomatoes and leaf lettuce primarily in northern Germany.”

Alan Cowell reported from Berlin, and William Neuman from New York. Reporting was contributed by James Kanter from Brussels; Victor Homola, Stefan Pauly and Judy Dempsey from Berlin; and Raphael Minder from Motril, Spain.

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Lawmaker Denies Sending Suggestive Photo but Doesn’t Rule Out It’s of Him

“This was essentially a hacked account that had a gag photo sent out on it,” Mr. Weiner, a Democrat, said during an interview in his office here. “I can’t say with certainty very much about where the photograph came from.”

On Tuesday, Mr. Weiner presided over two testy news briefings at which he had dodged a variety of questions. On Wednesday, he adopted a strikingly different approach, sitting patiently for a series of interviews at which he insisted he had done nothing wrong and marveled at what he said on MSNBC was the “Alice in Wonderland world” in which a wayward Twitter message had become the talk of the town.

Mr. Weiner, one of Congress’s most enthusiastic users of social media to engage with constituents and supporters, said he believed his Twitter account, or a related photo-sharing site, had been infiltrated by a hacker or a prankster, who had then sent the offending photo out late Friday.

He said that he had hired an Internet security company and a lawyer to look into the matter, but that he did not believe the episode merited investigation by federal law enforcement. He did not rule out the possibility that the photo was of him, but said he did not know who could have sent it.

He said he did not know the woman who received the photo, Gennette Cordova, a student at Whatcom Community College in Bellingham, Wash.; she followed him on Twitter. He said he regretted that Ms. Cordova was caught in the middle of the controversy. She issued a statement over the weekend saying she had never met him, and she has not spoken out since.

“I just feel terrible for her,” Mr. Weiner said, adding that he had never corresponded with her. “She has committed no crime except to follow me on Twitter.”

The congressman also expressed concern about the toll the episode was taking on his wife, Huma Abedin, a longtime aide to Secretary of State Hillary Rodham Clinton. “I’m protecting my wife, who every day is waking up to these insane stories that are getting so far from reality,” he told CNN. “You know, we’ve been married less than a year.”

Asked on CNN whether he still wished to be mayor, he said, “Put it this way: It’s the only better job than the one I have.”

Jack Levin, the chief executive of yFrog, the Twitter-affiliated image and video service that was used to upload the photo, said in an interview on Wednesday that his company did not have reason to believe that its user passwords were exposed or stolen. He said it was possible that the photo could have been sent from Mr. Weiner’s yFrog account through his Twitter password or through a yFrog password.

Mr. Levin said neither Mr. Weiner’s office nor any law enforcement authorities had contacted him or his company to inquire about the photo.

Twitter, which does not comment on individual user accounts for privacy reasons, has declined to say whether Mr. Weiner’s account was hacked.

Despite the swirl of events that has buffeted him for several days, Mr. Weiner has not abandoned his sharp humor. Suggesting that the photo might have been altered, he alluded to a “Daily Show” sketch on Tuesday in which the comedian Jon Stewart, a longtime friend, had joked that the photo could not have been of the congressman.

“I don’t have memory of this photograph,” Mr. Weiner said in the interview in his office. “But I also ... you know, Jon Stewart might have had it right last night: that there were elements of this photograph that might have been doctored.”

He paused, then added: “But I don’t know that. And I don’t want that to be the headline.”

Ashley Parker and Jennifer Preston contributed reporting from New York.

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