The American economy expanded at a  3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday.

The Commerce Department reported that the nation’s gross domestic product — the nation’s total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year.

Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.

The third and final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3.4% in the first quarter of the year.

A category within GDP that measures the economy’s underlying strength rose at a solid 2.7% annual rate, though that was down from 2.9% in the first quarter. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.

The Conference Board on Tuesday reported that its Consumer Confidence Index fell this month to 98.7, down from an upwardly revised August reading of 105.6.

The Justice Department sued Visa on Tuesday, accusing the company of illegally monopolizing the debit card market and therefore driving up prices for businesses and consumers.

The lawsuit, filed in the Southern District of New York, says Visa handles more than 60% of debit card transactions in the U.S. and collects more than $7 billion in annual processing fees. The company allegedly used its market power to stifle competition and keep fees artificially high, according to the suit.

The University of Wisconsin–Madison remains a top destination for talented students from the state, the nation and the world, with a record-setting 65,933 applicants for this year’s fall freshman class. The university enrolled 8,516 freshmen, its second-largest freshman class. It also welcomed 1,375 new transfer students to campus this fall. 

UW–Madison is once again exceeding its commitment to enroll a minimum of 3,600 new Wisconsin resident freshmen. This year’s figure of 3,825 is especially significant given the stagnant number of Wisconsin high school graduates and the decreasing number of Wisconsin high school graduates pursuing post-secondary education. 

A separate Board of Regents enrollment policy measures UW–Madison’s commitment to the state by requiring the university to enroll annually at least 5,200 new undergraduate students (new freshmen and new transfers) who are Wisconsin residents or Minnesota reciprocity students based on a three-year rolling average. The university exceeds this with its most recent average of 5,616.

The GOP-controlled House approved a resolution Friday that would overturn a new Biden administration rule on automobile emissions that Republicans say would force Americans to buy unaffordable electric vehicles they don’t want.The House passed the measure, 215-191. Eight Democrats voted in favor, while one Republican, Rep. Brian Fitzpatrick of Pennsylvania, voted no.

The rule issued by the Environmental Protection Agency in March would impose the most ambitious standards ever in the United States to cut planet-warming emissions from passenger vehicles.

Under the regulation, industry could meet the limits if 56% of new vehicle sales are electric by 2032, the EPA said. The standard also would require at least 13% plug-in hybrids or other partially electric cars by 2032, as well as more efficient gasoline-powered cars that get more miles to the gallon than cars currently on the road.

“The EPA’s latest tailpipe emissions rule is not really about reducing air pollution. It’s about forcing Americans to drive electric vehicles,’’ said Rep. Cathy McMorris Rodgers, R-Washington, the chair of the House Energy and Commerce Committee.

She called the rule “unreasonable” and “just another example of how the Biden-Harris administration’s rush-to-green agenda is handing China the key to America’s energy future, jeopardizing our auto industry and forcing people to buy unaffordable EVs they don’t want.’’

The new standards are designed to be technology-neutral and performance-based, EPA Administrator Michael Regan said, noting that there are “multiple pathways companies can choose to comply″ with the rule. The EPA could achieve its carbon pollution goals even if sales of battery electric vehicles are as low as 30% in 2032, as long as stringent standards for gas-powered cars are met, he said.

The Federal Reserve on Wednesday enacted its first interest rate cut since the early days of the Covid pandemic, slicing half a percentage point off benchmark rates in an effort to head off a slowdown in the labor market.

With both the jobs picture and inflation softening, the central bank’s Federal Open Market Committee chose to lower its key overnight borrowing rate by a half percentage point, or 50 basis points, affirming market expectations that had recently shifted from an outlook for a cut half that size. The decision lowers the federal funds rate to a range between 4.75%-5%.

In addition to this reduction, the committee indicated through its “dot plot” the equivalent of 50 more basis points of cuts by the end of the year, close to market pricing. The matrix of individual officials’ expectations pointed to another full percentage point in cuts by the end of 2025 and a half point in 2026. In all, the dot plot shows the benchmark rate coming down about 2 percentage points beyond Wednesday’s move.

“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the post-meeting statement said.

A report card from a group of civil engineers graded Wisconsin’s infrastructure with a C+ in an assessment that covers 17 categories, including parks, roads and energy.

The American Society of Civil Engineers issues the report card every four years as a way to give residents and policymakers a picture of where a state stands when it comes to transportation, water systems, waste management and other infrastructure. This year, Wisconsin became the first state to have broadband evaluated as part of the report.

The report card is intended to identify infrastructure areas with critical needs and to keep things running smoothly where the state is already doing well. The report authors offered three key recommendations for raising the state’s grade in 2028:

• Increase overall investment in infrastructure;
• Ensure that infrastructure is safe, reliable and resilient;
• Monitor access and improve data collection.

U.S. retail sales unexpectedly rose in August as a decline in receipts at auto dealerships was more than offset by strength in online purchases, suggesting that the economy remained on solid footing through much of the third quarter.

Retail sales increased 0.1% last month after an upwardly revised 1.1% surge in July, the Commerce Department’s Census Bureau said.

Retail sales increased 2.1% on a year-on-year basis in August. Online store sales rebounded 1.4% last month after falling 0.4% in July. Sales at gasoline stations dropped 1.2%, reflecting lower prices at the pump. Cheaper gasoline is likely freeing money for other spending. Sales at sporting goods, hobby, musical instrument and book stores increased 0.3%. Building material and garden equipment store sales edged up 0.1%. But sales at food services and drinking places, the only services component in the report, were unchanged after rising 0.2% in July.

Furniture store sales fell 0.7%. Receipts at electronics and appliance outlets dropped 1.1%, while those at clothing retailers decreased 0.7%. Receipts at motor vehicle and parts dealers dipped 0.1%.

On Friday, the Wisconsin Department of Workforce Development announced that the Governor’s Council on Workforce Investment (CWI) has launched a new CWI Dashboard, an online data tool to measure the success of the state’s workforce programs that support workers and employers.

The dashboard will serve as an information resource for council members, workforce system partners, employers, and the public by providing a way to track the progress of the actions items within the 2022 – 2026 CWI Strategic Plan. The dashboard also provides another public resource as DWD continues its dedication to transparency and public accountability.

“We are making continuous investments in building our workforce, and measuring the results of our efforts is critical to our long-term success,” Department of Workforce Development Secretary Amy Pechacek said. “The dashboard will strengthen the collaboration between DWD and its partners as we prepare Wisconsinites for good jobs and support employers’ economic growth.”

CWI is Wisconsin’s federally required workforce board, and it works closely with DWD to craft a comprehensive workforce development strategy. The dashboard incorporates many aspects of the CWI Strategic Plan, including the plan’s four focus areas: Education, Employers, Workforce, and System Alignment. Each focus area includes action items and key workforce system benchmarks. The dashboard also includes data to monitor the state workforce system’s performance and outcome requirements under the Workforce Innovation and Opportunity Act (WIOA).

On September 11, 2024, the U.S. Court of Appeals for the Fifth Circuit upheld the U.S. Department of Labor’s (DOL) authority to use a salary basis to define its white-collar overtime exemptions.

The Fifth Circuit, in Mayfield v. U.S. Department of Labor, held that a 2019 DOL rule, which sought to raise the minimum salary requirement for the so-called white collar or executive, administrative, or professional (EAP) employee exemptions to the Fair Labor Standards Act (FLSA), “fell within the [DOL’s] explicitly delegated authority to define and delimit the terms of the Exemption.”

The ruling is a significant win for the DOL as it defends its new April 2024 rule to further increase the minimum salary requirement for the EAP exemptions in similar legal challenges by business groups. The groups argue that the DOL rule exceeds the agency’s statutory authority because under the new rule, employees’ EAP status turns on their salary, not their job duties.

Minimum Salary Requirement

The 2019 DOL rule raised the required minimum weekly salary to qualify for the EAP exemptions by more than 50 percent, from $455 to $684 per week. Robert Mayfield, who owns thirteen fast-food restaurants in Austin, Texas, challenged the rule, arguing that the DOL has always lacked authority to set a minimum salary level for the EAP exemptions.

However, a Fifth Circuit panel disagreed. The panel found that a minimum salary requirement is “consistent with DOL’s statutorily conferred authority,” both as a defining “what it means to work in an [EAP] capacity” and as delimiting the scope of the EAP exemption.

The panel further sided with the DOL in noting that the inclusion of the word “executive” in the FLSA as part of the exemption connotes a “status of level for which salary may be a reasonable proxy,” hence it is frequently referred to as the “white collar exemption.”

“Distinctions based on salary level are also consistent with the FLSA’s broader structure, which sets out a series of salary protections for workers that common sense indicates are unnecessary for highly paid employees,” the panel stated in its decision.

Agency Deference

The Fifth Circuit panel further addressed the Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo, which held that courts must exercise independent judgment in deciding whether an agency acted within its statutory authority. The Fifth Circuit examined whether the DOL should be afforded so-called Skidmore deference, which allows a court to determine the appropriate level of deference based on the agency’s support of its action.

“We need not address that issue here because DOL’s interpretation of the statute is ‘best’ based on traditional tools of statutory interpretation and without reliance on deference of any kind,” the panel stated.

To the extent that Skidmore deference is in force, the panel said it applies to the 2019 DOL overtime rule: “The DOL has consistently issued minimum salary rules for over eighty years. Though the specific dollar value required has varied, DOL’s position that it has the authority to promulgate such a rule has been consistent. Furthermore, it began doing so immediately after the FLSA was passed.”

2024 DOL Rule

The Fifth Circuit ruling in Mayfield comes after a federal judge in the Eastern District of Texas granted a preliminary injunction blocking the 2024 DOL overtime rule as it applied to the State of Texas as an employer. The judge found that challengers were likely to succeed in showing that the minimum salary requirement exceeded the DOL’s authority, relying on the Loper Bright decision. That case, and another case challenging the rule in the Western District Texas, are currently in the midst of summary judgment briefing that will address the ongoing viability of the rule on the merits.

The 2024 DOL rule raised the minimum weekly salary to qualify for the EAP exemption from $684 per week to $844 per week, or the equivalent salary of $43,888 per year, on July 1, 2024. The rule then called for the minimum salary to increase to $1,128 per week, the equivalent of a $58,656 annual salary, on January 1, 2025. Under the rule, that threshold would increase every three years based on up-to-date wage data.

Key Takeaways

The Fifth Circuit ruling in Mayfield backs the DOL in its attempts to set minimum salary requirements for its white-collar overtime exemptions despite the FLSA not explicitly calling for the DOL to set such a requirement. The minimum salary increases pushed by the DOL pose significant compliance challenges for employers in setting employee compensation structures. In total, the 2024 rule is expected to make four million employees previously eligible for the exemption no longer eligible and, therefore, entitled to overtime compensation under the FLSA.