Economic and jobs news thread

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Markets Dip on Positive Jobs Data, Which Raises New Fears of Fed Interest Rate Hikes
by Nick Rummell
July 7, 2023

Introduction:

MANHATTAN (Courthouse News) — Disparate job reports this week caused investors to cautiously retreat from last week’s rally, as Wall Street worries the Federal Reserve may resume its process of hiking rates later this month.

Failing to compound last week’s gains, all three equities dropped earlier in the week, though they reclaimed some ground on Friday. By the week’s closing, the Dow Jones Industrial Average declined 642 points, while the S&P 500 and Nasdaq fell 51 points and 127 points, respectively.

On Friday, the Bureau of Labor Statistics’ monthly jobs report showed that nonfarm employment increased by 209,000 last month, slightly less than expected and the smallest monthly jobs gain since late 2020. Wage growth continued its upwards path, gaining 0.4% last month and unemployment sits once against at 3.6%.

Among individual sectors, healthcare and government saw the biggest increases, of 65,000 and 60,000 jobs, respectively. Retail lost just over 11,000 jobs, and temporary employment also fell by 12,000 jobs.

The numbers were disappointing, especially compared with another employment report earlier in the week. Worse still, the payroll numbers for May and April were revised downward by 110,000 jobs.

Read more here: https://www.courthousenews.com/markets ... ate-hikes

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Inflation rose just 0.2% in June, less than expected as consumers get a break from price increases
Source: CNBC

Inflation fell to its lowest annual rate in more than two years during June, the product both of some deceleration in costs and easy comparisons against a time when price increases were running at a more than 40-year high.

The consumer price index increased 3% from a year ago, which is the lowest level since March 2021. On a monthly basis, the index, which measures a broad swath of prices for goods and services, rose 0.2%. That compared to Dow Jones estimates for respective increases of 3.1% and 0.3%.

Stripping out volatile food and energy prices, core CPI rose 4.8% from a year ago and 0.2% on a monthly basis. Consensus estimates expected respective increases of 5% and 0.3%.

In sum, the numbers could give the Federal Reserve some breathing room as it looks to bring down inflation that was running around a 9% annual rate at this time in 2022, the highest November 1981.

Read more: https://www.cnbc.com/2023/07/12/inflati ... eases.html

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in more than two years

Well that was an exceptional situation....

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June wholesale prices rise less than expected in another encouraging inflation report
Source: CNBC

The producer price index for June had a smaller than expected increase, the Labor Department reported Thursday, in the latest sign that inflation is calming in the United States.

The PPI for final demand rose 0.1%. Economists surveyed by Dow Jones were expecting a rise of 0.2%. PPI rose 0.1% when excluding food, energy and trade services, which was in line with expectations.

The producer report comes a day after the consumer price index showed a smaller-than-expected increase. The CPI rose just 3% year over year, its lowest since March 2021, bolstering hopes for investors that the Federal Reserve is near the end of its rate-hiking cycle.

The wholesale producer numbers have declined faster than the consumer inflation data. In May, the headline PPI number actually declined 0.4%, and was unchanged when excluding food, energy and trade services.

Read more: https://www.cnbc.com/2023/07/13/ppi-jun ... ected.html

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US inflation outlook brightening; consumer sentiment near two-year high
Source: Reuters

With the inflation environment improving considerably, Americans are growing more optimistic about the economic outlook. Consumer sentiment vaulted to the highest level in nearly two years in July, other data showed on Friday.

The disinflationary trend has raised cautious optimism that the economy could avoid a recession this year. Economists also believe an expected interest rate hike from the Federal Reserve later this month would be the last in the U.S. central bank's fastest monetary policy tightening cycle since the 1980s.

The Fed, which has hiked its benchmark overnight interest rate by 500 basis points since March 2022, skipped a rate hike at its policy meeting last month.

"The inflation pipeline is clearing up," said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina. "Investors should expect the Fed in the upcoming meeting to acknowledge the continued improvement in pricing dynamics across the domestic economy."

Read more: https://www.reuters.com/markets/us/us-i ... 023-07-14/

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US jobless claims fall again as labor market continues to flash strength
Source: ABC News/AP

Fewer Americans applied for unemployment benefits last week with the labor market continuing to cruise along despite higher interest rates intended to cool hiring.

U.S. applications for jobless claims fell by 9,000 to 228,000 for the week ending July 15, from 237,000 previous week, the Labor Department reported Thursday. The four-week moving average of claims, which evens out some of the weekly volatility, fell by 9,250 to 237,500. Jobless claim applications are viewed as reflective of the number of layoffs in a given week.

For three weeks in late May and early June, jobless claims had appeared to reach a sustained, higher level, above 260,000. But the past four weeks, claims have retreated and the labor market remains historically healthy.

Since more than 20 million jobs vanished when the COVID-19 pandemic hit in the spring of 2020, U.S. employers have added jobs at a blistering pace, more often than not beating forecasts. Despite the fastest interest rate hikes since 1989, the unemployment rate has hardly budged and remains historically low at 3.6%.

Read more: https://abcnews.go.com/Business/wireSto ... -101517839

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House passes bill that would raise retirement age for pilots to 67
Source: NBC News

WASHINGTON — The House voted Thursday to pass legislation that would reauthorize the Federal Aviation Administration, the agency that oversees commercial airlines and airports, for the next five years.

Lawmakers approved the bill, called the Securing Growth and Robust Leadership in American Aviation Act, which included a provision to raise the retirement age for pilots from 65 to 67 amid a major pilot shortage, in a 351-69 vote.

The effort to raise the retirement age was met with some opposition within the chamber from lawmakers who thought the move could endanger pilot standards and passenger safety. But the Rules Committee blocked an amendment that would have stopped the change.

America has always been the gold standard in aviation, and this bill ensures that we remain the world leader," House Transportation Committee Chairman Sam Graves, R-Mo., said in a statement. Several other amendments were considered to the bill, including one authored by Rep. Marjorie Taylor Greene, R-Ga., and Rep. Mary Miller, R-Ill., that would force airlines to rehire all pilots who were fired for refusing to be vaccinated. The chamber overwhelmingly rejected that amendment.

Read more: https://www.nbcnews.com/politics/congre ... -rcna95349

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Fed No Longer Forecasting a Recession
Source: Political Wire

Federal Reserve Chairman Jerome Powell said the Fed’s staff is no longer predicting near-term U.S. recession, Axios reports.

Said Powell: “Given the resilience of the economy recently, they are no longer forecasting a recession.”

Read more: https://politicalwire.com/2023/07/26/fe ... recession/

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The Fed's Preferred Inflation Metric Falls Again, to 4.1% Annual Rate

By Megan Cassella

The Federal Reserve's preferred inflation gauge climbed at a 4.1% annual pace in June, marking a sizable step down from May's 4.6% annual rate and bringing price growth to its slowest pace in nearly two years.

Read more: https://www.barrons.com/articles/pce-pr ... y-2eadc4a2

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Private sector added 324,000 jobs in July, well above expectations, ADP says
Source: CNBC

Private sector companies added far more jobs than expected in July, pushed higher by a boom in leisure and hospitality jobs, payroll processing firm ADP reported Wednesday.

Job gains for the month totaled 324,000, driven by a 201,000 jump in hotels, restaurants, bars and affiliated businesses. That total was well above the Dow Jones consensus estimate for 175,000, though it marked a decrease from the downwardly revised 455,000 in June.

The report provides another indication that the U.S. jobs market has retained its strength despite an extended Federal Reserve campaign to slow the economy and bring down inflation.

“The economy is doing better than expected and a healthy labor market continues to support household spending,” said ADP chief economist Nela Richardson. “We continue to see a slowdown in pay growth without broad-based job loss.”

Read more: https://www.cnbc.com/2023/08/02/private ... -says.html

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The U.S. economy added 187,000 jobs in July, less than expected

Source: CNBC

Job growth in July was less than expected, pointing to slower growth in the U.S. economy, the Labor Department reported Friday. Nonfarm payrolls expanded by 187,000 for the month, slightly below the Dow Jones estimate for 200,000. Though the headline number was a miss, it actually represented a modest gain from the downwardly revised 185,000 for June.

The unemployment rate was 3.5%, against a consensus estimate that the jobless level would hold steady at 3.6%.The rate is just above the lowest level since late 1969. Average hourly earnings, a key figure as the Federal Reserve fights inflation, rose 0.4% for the month, good for a 4.4% annual pace. Both numbers were higher than the respective estimates for 0.3% and 4.2%.

Another important figure, the labor force participation rate held at 62.6%, the fifth straight month at that level. A more encompassing unemployment rate that includes discouraged workers and those holding part-time jobs for economic reasons fell to 6.7%, down 0.2 percentage point from June. The survey of households, which is used to calculate the unemployment rate, showed a more robust gain of 268,000.

"The labor market seems to be humming along rather well at this point in the business cycle,. A 3.5% unemployment rate, you can't complain about that," said Satyam Panday, U.S. chief economist at S&P Global Ratings. "It's a nice glide path down. We would have liked to see wage growth come down a little, but the purchasing power of the consumer seems to be holding up well."

Read more: https://www.cnbc.com/2023/08/04/jobs-re ... -july.html

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Inflation gauge rose 3.2% annually in July, less than expected
Source: CNBC

The consumer price index rose 3.2% from a year ago in July, a sign that inflation has lost at least some of its grip on the U.S. economy.

Prices accelerated 0.2% for the month, in line with the Dow Jones estimate, the Bureau of Labor Statistics reported Thursday. However, the annual rate was slightly below the 3.3% forecast though higher than June.

Excluding volatile food and energy prices so-called core CPI also increased 0.2% for the month, equating to a 12-month rate of 4.7%, the lowest since October 2021. The annual rate for core also was slightly below a Dow Jones consensus estimate for 4.8%. Markets reacted positively to the report, with futures tied to the Dow Jones Industrial Average up nearly 200 points and Treasury yields mostly lower.

Almost all of the monthly inflation increase came from shelter costs, which rose 0.4% and were up 7.7% from a year ago. The BLS said more than 90% of the increase came from that category, which accounts for about one-third of the CPI weighting.

Read more: https://www.cnbc.com/2023/08/10/cpi-inf ... 2023-.html

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Number of Americans applying for jobless aid rises, but not enough to cause concern
Source: ABC News/AP

The number of Americans applying for jobless benefits jumped last week, but not enough to raise concern about the consistently strong U.S. labor market.

U.S. applications for unemployment benefits rose by 21,000 to 248,000 for the week ending August 5, from 227,000 the week before, the Labor Department reported Thursday. That’s the most in five weeks.

The four-week moving average of claims, a less volatile reading, ticked up by 2,750 to 228,250.

Jobless claim applications are viewed as broadly representative of the number of layoffs in a given week. Applications for jobless aid reached a higher level above 260,000 for a few weeks this spring, causing some concern, but then retreated.

Read more: https://abcnews.go.com/Business/wireSto ... -102162850