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🚨 Situational awareness: President Biden arrived in Israel as chaos rises across the Middle East, Axios' Barak Ravid reports. Crude oil prices rose this morning after a deadly missile blast at a Gaza hospital.

Today's newsletter is 1,000 words, 4 minutes.

1 big thing: Even unions have union troubles

Illustration: Shoshana Gordon/Axios

The union that represents the AFL-CIO's staffers is in the midst of contentious negotiations with the big labor group, Emily writes.

Why it matters: The momentum behind workers is so strong lately, that even labor unions are having labor troubles.

Driving the news: After staffers picketed in D.C. last week, and two days of talks this week, the AFL-CIO proposed a revised contract to the union yesterday.

  • Their last deal expired back in February and the last proposal from the AFL-CIO, in September, was overwhelmingly rejected — 97% of members said no.
  • A vote on the latest proposal is expected by early next week.

The background: The AFL-CIO is basically synonymous with the American labor movement. It's the 67-year-old umbrella organization for nearly 60 unions — including the American Federation of Teachers, the American Postal Workers Union, and the Writers Guild of America — representing about 12.5 million workers.

  • Many of them, including the UAW's autoworkers and Hollywood actors, are on strike right now.

Zoom out: Labor unions are resurgent at the moment — and unions are flexing muscles not seen for a while. So, some observers were surprised the AFL-CIO hadn't worked this out yet.

  • The AFL-CIO "is supposed to set the tone for what the labor movement does," said Ana Avendaño, a lecturer at CUNY School of Law, and a former associate general counsel at the AFL-CIO.

At stake: The union says staffers haven't gotten a raise in nine years; and the best offer they've seen from the AFL-CIO is for 2.4% annual increases, well below inflation. Plus, they're fending off efforts to cut pension benefits.

  • The stagnating pay is hurting retention and hiring, and the staff union has dwindled to 90 employees from 160 in 2016, two of the union's leaders said in a column for the Cap Times. This hurts the group's ability to help its affiliate unions.
  • "The AFL-CIO once had an entire collective bargaining department to help unions navigate complex negotiations," they write. "Today we don't have a single staffer assigned to bargaining full time, even as affiliates like the Bakery, Confectionery, Tobacco Workers and Grain Millers in Memphis have been on strike for months."

The other side: The AFL-CIO "deeply respects the collective bargaining process and every worker's right to make their voices heard in any contract negotiation," said Ray Zaccaro, the AFL-CIO's director of public affairs.

  • "We remain committed to reaching a fair agreement that honors both the important work of our staff and a prudent stewardship of our members' resources," he said. "We look forward to the Guild's response to this revised offer and will continue negotiating in good faith for a fair contract."

The bottom line: Even a union needs a union.

  • "If you have a boss, you need a union," said Dan Gabor, the president of the Washington-Baltimore News Guild, which is the umbrella organization for the AFL-CIO staff union. "And that is also true for workers at the AFL-CIO."

2. Catch up quick

🇨🇳 China's Belt and Road initiative pulls Russian President Vladimir Putin closer. (Axios) Its GDP jumped 4.9%. (FT)

💸 X to test $1 subscription fee for new users. (Axios)

🏥 Workplace health insurance premiums for family coverage reach nearly $24,000. (Axios)

3. $115K is the magic number

Data: Redfin; Note: Affordable means homebuyer spends no more than 30% of income on monthly mortgage payment; Chart: Axios Visuals
Data: Redfin; Note: Affordable means homebuyer spends no more than 30% of income on monthly mortgage payment; Chart: Axios Visuals

The median income in the U.S. is $75,000 a year, but you'll need to earn $40,000 more to comfortably afford the median-priced home, per a new analysis from Redfin, Emily writes.

Why it matters: With mortgage rates at 20-year highs and home prices hardly budging, the barrier to homeownership is only getting higher.

  • The average rate on a 30-year mortgage hit 7.92% yesterday, according to Mortgage News Daily.

4. 🤑 If you pay Americans money, they will spend it

Data: U.S. Census Bureau, FactSet; Chart: Axios Visuals
Data: U.S. Census Bureau, FactSet; Chart: Axios Visuals

Americans continue to spend the fruits of their labor: Retail sales crushed expectations in September, Matt writes.

Why it matters: The U.S. economy is roughly 70% consumption, so if you want economic growth, consumers have to keep spending.

The latest: They clearly are. Retail sales numbers for September arrived far better than expected, in what Axios Macro's Neil Irwin calls a "blockbuster" report.

  • Sales jumped 3.8% compared to last September.
  • Online sales were up 8.4%. Receipts at eating and drinking establishments, up 9.2%.

Yes, but: These retail sales numbers are not inflation-adjusted, meaning that a lot of the increase over the last year reflects the 3.7% rise in the Consumer Price Index over the same period.

💭 Matt's thought bubble: Maybe this whole economics thing ain't rocket science.

  • By all accounts, the U.S. labor market is incredibly strong, with an unemployment rate that's been under 4% for almost two years.
  • Wage growth is solid — hourly earnings were up 4.4% compared to last year — and with inflation easing, real disposable income is up. That means that on the whole, people are better off than they were last year when inflation crushed real earnings.

The bottom line: People are spending their money. And in an economy based on people spending their money, that's good.

5. Yield on the T-note hits new post-crisis highs

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

The yield on the 10-year Treasury note rose to 4.84% yesterday, setting a new high for the post-COVID era, Matt writes.

  • The solid retail report and good data on industrial production lifted 10-year yields by 0.13 percentage points, a pretty big one-day jump in the Treasury market.

Why it matters: The yield on the 10-year Treasury note — basically what financial markets would charge the U.S. government to borrow for 10 years — forms a foundation for most other borrowing activity.

How it works: Borrowing costs for a range of assets from corporate bonds, to 30-year home mortgages, are tied to the yield on the benchmark Treasury bond.

  • If the U.S. government — the pre-eminent military, financial and economic power on earth — has to pay more, likely everybody else does, too.

The bottom line: The rise in yields over the last six months reflects an emerging higher-for-longer consensus view in the markets, which, in turn, reflects the fact that the U.S. economy has a ton of momentum.

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Today's Axios Markets was edited by Kate Marino and copy edited by Mickey Meece.