Economic and jobs news thread

[weatheriscool]

Price growth cooled to 5% in February, but consumer pain is set to linger
Source: NBC News

Consumer prices climbed 5% in March, the Bureau of Labor Statistics reported Wednesday, down from a 6% rate in February. The latest inflation reading represents the ninth-straight month of easing price growth, and is down from a 9% high last June.

But it's still well above the Federal Reserve’s 2% target. Among the key categories still seeing outsized price growth are food, which climbed 8.5% in March; and rent, which hit 8.3% growth, its largest-ever 12-month increase.

As a result, cooling inflation won't prove much solace to consumers, who can still expect to feel the pinch in their pocketbooks for a while longer.

Because inflation numbers are closely tied to the Federal Reserve's decisions about how high interest rates should be, a majority of investors are betting the Fed will raise rates by 0.25% again at its next meeting May 3.

Read more: https://www.nbcnews.com/business/econom ... -rcna79150

[weatheriscool]

Yellen says US banks may tighten lending and negate need for more rate hikes
Source: Reuters

WASHINGTON, April 15 (Reuters) - U.S. Treasury Secretary Janet Yellen said banks are likely to become more cautious and may tighten lending further in the wake of recent bank failures, possibly negating the need for further Federal Reserve interest rate hikes.

Yellen said in a "Fareed Zakaria GPS" interview that policy actions to stem the systemic threat caused by last month's failures of Silicon Valley Bank and Signature Bank had caused deposit outflows to stabilize, "and things have been calm," according to a CNN transcript released on Saturday.

"Banks are likely to become somewhat more cautious in this environment," Yellen said in the interview, which is scheduled to air on Sunday. "We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come."

She said that would lead to a restriction in credit in the economy that "could be a substitute for further interest rate hikes that the Fed needs to make."

Read more: https://www.reuters.com/markets/us/yell ... 023-04-15/

[caltrek]

The Labor Supply Rebound from the Pandemic

April 17 , 2023

Introduction:

(The White House) Recent data provide encouraging news about a key economic variable: labor supply, specifically, the share of Americans participating in the job market. Labor demand—as proxied by job creation, nominal wage growth, and job vacancies—has been unusually strong in the post-pandemic recovery. But analysts have repeatedly raised concerns about the supply of labor, specifically regarding the extent to which labor force participation would recover.

Recent trends, however, reveal that most of the “missing workers” are back in the labor market. Overall labor force participation is back to its pre-pandemic forecasted level, and the closely-watched prime-age (25-54) labor force participation rate is now a tick above pre-pandemic levels (see Figure 1). Immigration flows, depressed during the pandemic, have also rebounded. Job openings are also moderating somewhat, signaling that labor demand and supply are becoming better aligned, a necessary condition for achieving a path to stable and steady growth.

Most of the “missing workers” are back

Throughout the economic recovery from the pandemic, there was much speculation about the “missing workers” who had not yet returned to the labor market. Numerous theories were offered to explain this apparent shortfall of workers. Analysts speculated that an epidemic of long Covid was keeping workers on the sidelines, that individuals were sitting out the labor market due to excess savings built up during the pandemic, that a “Great Resignation” was occurring as workers reassessed work/life balance or that the country had experienced a collective loss of work ethic.

Yet despite the enormous disruptions of the pandemic, these “missing workers” are now largely back in the labor market. The prime-age labor force participation rate, which had taken more than a decade to recover to pre-Great Recession levels, has now returned to those very high levels (see Figure 1). That labor force participation took only three years to recover to these highs is actually quite remarkable—and should reframe our thinking about the labor market in the aftermath of the pandemic.

Further Extract:

The baby boom generation is aging out of the labor force, and the cohort of younger workers coming up to replace them is much smaller. This could pose a real challenge for industries with older workforces. Policies targeting barriers to labor supply, such as public investment in accessible, affordable childcare, and increasing immigration pathways are therefore warranted…
Immigration flows have largely recovered from the pandemic

Immigration bans and restrictive policies of the prior Administration decreased the flow of foreign-born workers who were critical for many industries, particularly food services and agriculture. Due in part to the Biden Administration’s efforts to reduce unnecessary barriers and accelerate visa processing, immigration flows have rebounded from the pandemic. As can be seen in Figure 3, the foreign-born labor force has now largely returned to 2012-2018 trends. This rebound in immigration flows has helped to ease labor supply pressures.

Read more here: https://www.whitehouse.gov/cea/written ... pandemic/

Note: This is from a government source, therefore length restrictions due to copyright considerations do not need to apply.

[caltrek]

Whole Foods Plans to Lay Off Several Hundred Corporate Employees
by Annie Palmer
April 20, 2023

Introduction:

(CNBC) Amazon’s Whole Foods is letting go some corporate employees as part of a planned reorganization of select teams, and as its parent company closely examines costs.

Whole Foods plans to reorganize certain global and regional support teams over the next two months, the company’s executive team wrote in a memo to employees on Thursday. As a result, the upscale grocer is laying off several hundred employees from those teams, a spokesperson confirmed. The cuts translate to about less than half of a percent of the company’s global workforce, a Whole Foods Market spokesperson said.

“We often talk about how simplifying our work and improving how we operate is critical as we grow,” the executive team wrote in the memo. “We’ve made great progress in these areas through previous operational and organizational changes. As the grocery industry continues to rapidly evolve, and as we — like all retailers — have navigated challenges like the COVID-19 pandemic and continued economic uncertainty, it has become clear that we need to continue to build on these changes. With additional adjustments, we will be able to further simplify our operations, make processes easier, and improve how we support our stores.”

As part of the changes, Whole Foods, which operates across nine different regions, will shift to six regions. The move won’t result in any store closures or the letting go of any store or distribution center employees, according to the memo.

Whole Foods is tweaking its operational structure as it seeks to expand and better serve customers, the spokesperson said. The company has roughly 50 new stores in development, they added.

Read more here: https://www.cnbc.com/2023/04/20/whole- ... here.html

[weatheriscool]

Disney begins second, larger round of layoffs, bringing total to 4,000 jobs cut
Source: CNBC

Disney began its second, larger wave of layoffs Monday, bringing total job cuts in recent weeks to 4,000 when the latest round is completed.

Earlier this year, Disney said it would slash 7,000 jobs from its workforce as part of a larger reorganization of the company that will see it cut costs by $5.5 billion. The announcement was made during Bob Iger’s first earnings call since returning as CEO.

Disney officials said Monday that they don’t take the departure of so many colleagues lightly. Eliminating 7,000 jobs from its workforce equates to about 3% of the roughly 220,000 people Disney employed as of Oct. 1, according to a securities filing, with roughly 166,000 in the U.S. and about 54,000 internationally. Disney notified employees of a first wave of layoffs on March 27, which saw cuts in its metaverse strategies unit and part of its Beijing office.

The second round, which will be completed Thursday, will affect various divisions across the company, including Disney Entertainment and ESPN, as well as Disney Parks, Experiences and Products. The jobs affected will span across the country from Burbank, California, to New York and Connecticut. CNBC reported last week layoffs would soon commence at ESPN.

Read more: https://www.cnbc.com/2023/04/24/disney- ... -wave.html

[weatheriscool]

U.S. GDP rose at a 1.1% pace in the first quarter as signs build that the economy is slowing
Source: CNBC

Growth in the U.S. slowed considerably during the first three months of the year as interest rate increases and inflation took hold of an economy largely expected to decelerate even further ahead.

Gross domestic product, a measure of all goods and services produced for the period, rose at a 1.1% annualized pace in the first quarter, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had been expecting growth of 2%.

The growth rate followed a fourth quarter in which GDP climbed 2.6%, part of a year that saw a 2.1% increase.



The report also showed that the personal consumption expenditures price index, an inflation measure that the Federal Reserve follows closely, increased 4.2%, ahead of the 3.7% estimate. Stripping out food and energy, core PCE rose 4.9%, compared to the previous increase of 4.4%.

Read more: https://www.cnbc.com/2023/04/27/gdp-q1-2023-.html

[weatheriscool]

[weatheriscool]

[caltrek]

Good Corporate Earnings Help Smooth Path Over Poor GDP & Inflationary Data
by Nick Rummell
April 28, 2023

Introduction:

MANHATTAN (Courthouse News) — Showing the best monthly gain since the beginning of the year, Wall Street polished off April in the black despite muddled corporate earnings and mixed inflationary data.

The Dow Jones Industrial closed out the week up 290 points since last Friday’s closing bell, while the Nasdaq gained 154 points and the S&P 500 increased by 36 points.

On Friday, the latest inflation data from the Bureau of Economic Analysis showed that personal consumption expenditures rose by less than 0.1% last month, a comforting sign. But another report issued on Friday by the U.S. Bureau of Labor Statistics showed that wages and salaries increased 5.1% over the last year, hinting that the Federal Reserve’s efforts to combat price increases has not yet fully worked.

“While inflationary pressures continue to ease, the trajectory is still not moving quickly enough for the Federal Reserve to declare victory,” said Quincy Krosby, chief global strategist at LPL Financial. The Fed is scheduled to meet again next week, during which it likely will announce its final interest rate hike of the year at 0.25%.

Another factor that may affect the Fed’s approach is the lackluster gross domestic product growth, which came in at 1.1% annualized for the first quarter, less than the 2% many experts had forecast. Real GDP increases have shrunk for three straight quarters since the middle of 2022.

Read more here: https://www.courthousenews.com/good-co ... ary-data/

caltrek’s comment: Doesn’t sound much like a “declining rate of profit” to me.

[weatheriscool]

Fed Set to Raise Interest Rates to 16-Year High and Debate a Pause

Officials could keep their options open in crafting signals around the endgame for increases

Federal Reserve officials are on track to increase interest rates again at their meeting this week while deliberating whether that will be enough to then pause the fastest rate-raising cycle in 40 years.

“We are much closer to the end of the tightening journey than the beginning,” Cleveland Fed President Loretta Mester said April 20.

Just how much closer the Fed is to that endgame will be a focus of internal debate because officials think their communications around future policy actions can be as significant as individual rate changes.

Officials are likely to keep their options open as they finesse carefully calibrated signals in their postmeeting statement and remarks by Fed Chair Jerome Powell at a news conference after the meeting ends Wednesday.

https://www.wsj.com/articles/fed-set-to ... _permalink

[weatheriscool]

[weatheriscool]

Private payrolls surged by 296,000 in April, much higher than expected, ADP says
Source: CNBC

Hiring at private companies unexpectedly swelled in April, countering expectations for a cooling job market ahead, payroll processing firm ADP reported Wednesday.

Private payrolls rose by 296,000 for the month, above the downwardly revised 142,000 the previous month and well ahead of the Dow Jones estimate for 133,000. The gain was the highest monthly increase since July 2022.

The surge comes despite Federal Reserve efforts to slow economic growth and in particular to tame a powerful labor market that has added more than 800,000 jobs this year by ADP’s count. An imbalance of demand over supply in the labor market has created strong wage gains that are reflected in persistent inflation pressures.

One positive sign for the Fed is that annual pay rose 6.7% over the past year, a deceleration from gains that had been consistently coming in above 7%. “The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,” ADP chief economist Nela Richardson said. “Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines.”

Read more: https://www.cnbc.com/2023/05/03/adp-job ... -2023.html

[weatheriscool]

IA: Lawmakers approve bill loosening restrictions on home-based food businesses

The Senate sent legislation to the governor Wednesday that would loosen regulations on Iowans selling food made at home and in temporary establishments such as farmer’s market stands.

House File 661 passed Wednesday on a 33-15 vote. The bill’s floor manager, Sen. Jesse Green, R-Boone, said the legislation is “pro-small business,” helping home food and processing establishments, food processing plants and temporary food establishments, and farmers’ market vendors.

The bill sent to Gov. Kim Reynolds follows a 2022 law, House File 2431, which allows people to create businesses making food in their homes to be sold in stores. This law only allowed the sale of food that is not time or temperature-controlled for safe consumption or preserved foods like jams, pickles, chocolate or spices, or those under 41 degrees.

Home-based restaurants would still not be allowed under the bill, but the legislation would allow home food businesses to sell food made for immediate consumption.

“A classic example of this would be they can sell cold pizza, but not hot pizza,” Green said. Other states with similar “food freedom laws” do not have regulations restricting them from serving hot food, he said.

https://iowacapitaldispatch.com/2023/05 ... usinesses/

[weatheriscool]

Job growth totals 253,000 in April, beating expectations even as the U.S. economy slows

Source: CNBC

Job growth fared better than expected in April despite bank turmoil and a decelerating economy, the Labor Department reported Friday.

Nonfarm payrolls increased 253,000 for the month, beating Wall Street estimates for growth of 180,000, according to the Bureau of Labor Statistics.

The unemployment rate was 3.4% against an estimate for 3.6% and tied for the lowest level since 1969. A more encompassing number that includes discouraged workers and those holding part-time jobs for economic reasons edged lower to 6.6%.

Average hourly earnings, a key inflation barometer, rose 0.5% for the month, more than the 0.3% estimate and the biggest monthly gain in a year. On an annual basis, wages increased 4.4%, higher than the expectation for a 4.2% gain. Both numbers raise the chances that the Federal Reserve could decide to raise interest rates again in June, though markets were only pricing in a small probability following the jobs report.

Read more: https://www.cnbc.com/2023/05/05/jobs-re ... april.html

[weatheriscool]

Inflation rose 4.9% in April from a year ago, less than expectations

Source: CNBC

A widely followed measure of inflation rose in April, though the pace of the increase provided some hope that the cost of living will head lower later this year.

The consumer price index, which measures the cost of a broad swath of goods and services, increased 0.4% for the month, in line with the Dow Jones estimate, according to a Labor Department report Wednesday.

However, that equated to an annual increase of 4.9%, slightly less than the 5% estimate. Excluding volatile food and energy categories, core CPI rose 0.4% monthly and 5.5% from a year ago both in line with expectations.

Increases in shelter, gasoline and used vehicles pushed the index higher, and were offset somewhat by declines in prices for fuel oil, new vehicles and food at home.

Read more: https://www.cnbc.com/2023/05/10/cpi-inf ... -2023.html

[weatheriscool]

Wholesale prices rose just 0.2% in April, less than estimate as inflation pressures ease

PUBLISHED THU, MAY 11 20238:42 AM EDTUPDATED 3 HOURS AGO

Jeff Cox
https://facebook.com/jeff.cox.7528
https://twitter.com/JeffCoxCNBCcom[quote]

KEY POINTS
• The producer price index, a measure of prices for final demand goods and services, increased 0.2%, against the Dow Jones estimate for 0.3%.
• Headline PPI rose just 2.3%, down from 2.7% in March and the lowest reading since January 2021.
• Portfolio management costs and gasoline prices helped push the increase, while a 37.9% plunge n chicken egg prices helped keep the number in check.
• In other news, weekly jobless claims jumped to 264,000, the highest reading since Oct. 30, 2021.

Wholesale prices rose less than expected in April, according to a Labor Department report Thursday that provides more hope that inflation is at least trending lower.

The producer price index, a measure of prices for final demand goods and services, increased 0.2%, against the Dow Jones estimate for 0.3% and after declining 0.4% in March. Excluding food and energy, the core PPI also rose 0.2%, in line with expectations. The core reading was the same excluding trade.

On an annual basis, the headline PPI increased just 2.3%, down from 2.7% in March and the lowest reading since January 2021.

Though the PPI rise was less than expected, the services index increased 0.3%, the biggest move since November 2022, the Bureau of Labor Statistics report stated.

A separate Labor Department report Thursday showed that jobless claims for the week ended May 6 jumped to 264,000, a rise of 22,000 from the previous period. The total was well above the Dow Jones estimate for 245,000 and the highest reading since Oct. 30, 2021. Continuing claims edged higher to 1.81 million.
[/quote]
{snip}

Read more: https://www.cnbc.com/2023/05/11/wholesa ... -ease.html

[weatheriscool]

[weatheriscool]

US weekly jobless claims fall; labor market defying recession fears
Source: Reuters

WASHINGTON, May 18 (Reuters) - The number of Americans filing new claims for unemployment benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labor market remains tight.

The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021. That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.

The state's Department of Unemployment Assistance said last week it was "experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."

"The labor market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits," said Christopher Rupkey, chief economist at FWDBONDS in New York. Initial claims for state unemployment benefits declined 22,000 to a seasonally adjusted 242,000 for the week ended May 13. The drop was the largest since Nov. 20, 2021. Economists polled by Reuters had forecast 254,000 for the latest week.

Read more: https://www.reuters.com/markets/us/us-w ... 023-05-18/

[weatheriscool]

Fitch puts United States' AAA rating on negative watch, citing debt ceiling fight
Source: CNBC

Fitch put the United States’ AAA long-term foreign-currency issuer default rating on negative watch Wednesday evening, pointing to brinksmanship over the debt ceiling.

“The Rating Watch Negative reflects increased political partisanship that is hindering reaching a solution to raise or suspend the debt limit despite the fast-approaching x date,” the rating agency said.

Futures linked to the Dow Jones Industrial Average briefly slipped about 100 points after Fitch, one of the big three ratings agencies, issued its note. The so-called X-date, which is when the U.S. could default on its debt, could arrive as early as June 1, according to Treasury Secretary Janet Yellen.

Fitch noted that it still expects Washington officials to arrive at a resolution before the deadline. “However, we believe risks have risen that the debt limit will not be raised or suspended before the X-date and consequently that the government could begin to miss payments on some of its obligations,” the rating agency said.

Read more: https://www.cnbc.com/2023/05/24/fitch-u ... iling.html

[weatheriscool]

The US economy grew faster in the first quarter than previously reported
https://www.cnn.com/2023/05/25/business ... index.html

Washington, DC
CNN
—

US economic growth in the first three months of the year was faster than previously estimated, the Commerce Department reported on Thursday.

Gross domestic product, the broadest measure of economic output, increased at an annualized rate of 1.3% in the first quarter, up from an initial estimate of 1.1% reported last month. GDP is adjusted for inflation and seasonality.

The change was mostly driven by an upward revision to private inventory investment, which includes finished goods, materials, and works in progress being saved for a later date. That means inventory investment had less of a drag on GDP earlier this year.

GDP grew at a slower pace in the January-through-March period compared with the previous quarter and was below economists’ expectations. Robust consumer spending, which accounts for about two-thirds of economic output, helped fuel the first quarter’s growth, along with strong government outlays. Businesses cut back their spending on equipment during that period.

So far, economic activity seems to be holding up. Retail sales rebounded in April following two months of declines, advancing a seasonally adjusted 0.4% from the prior month. Employers added 253,000 jobs in April, a strong gain, and average hourly earnings grew 0.5% that month.