Economic and jobs news thread

weatheriscool
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Re: Economic and jobs news thread

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Employers added 528,000 jobs in July, as the hot labor market powers on
Source: Washington Post

The hot labor market continued to show rapid growth in July, with employers adding 528,000 jobs, despite fears of a recession.

The unemployment rate edged down to 3.5 percent, according to the Bureau of Labor Statistics. In July, the labor market continued to show stunning growth that afforded workers historic wage gains and more leverage at their jobs.
Share with The Post: What's one way you've felt the impact of inflation?

The labor market has shown little signs of cooling off, proving to be a pillar of strength for an economy facing strong head winds. Other indicators, especially inflation at 40-year highs and six months of negative economic growth paint a less rosy picture. The financial markets have lost trillions of dollars in value this year, and one measure of consumer sentiment hit a record low in June.

A slowdown in job growth would have indicated that the Fed's interest rate hikes are achieving their intended goal of cooling down the labor market. As the Fed continues to raise rates, and borrowing becomes more expensive for households and companies, workers will probably have less leverage in the job market than they did earlier this year. Also, higher interest rates could lead to a wave layoffs.
Read more: https://www.washingtonpost.com/business ... july-2022/
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caltrek
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Re: Economic and jobs news thread

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weatheriscool wrote: Fri Aug 05, 2022 4:15 pm Employers added 528,000 jobs in July, as the hot labor market powers on
Source: Washington Post

The hot labor market continued to show rapid growth in July, with employers adding 528,000 jobs, despite fears of a recession.

The unemployment rate edged down to 3.5 percent, according to the Bureau of Labor Statistics. In July, the labor market continued to show stunning growth that afforded workers historic wage gains and more leverage at their jobs.

Share with The Post: What's one way you've felt the impact of inflation?

The labor market has shown little signs of cooling off, proving to be a pillar of strength for an economy facing strong head winds.
Read more: https://www.washingtonpost.com/business ... july-2022/
Ken_J wrote: Fri Jul 29, 2022 2:48 am why are they playing games with calling a recession a recession. it's a stupid game that will quickly make it so that people won't trust anything they say afterward.
Well, I think the new jobs growth report is part of the answer. Normally, one associates a recession with a rise in unemployment, not a reaching of an almost unprecedented low of 3.5%.

Still, I have always thought that a recession is defined as two consecutive quarters of negative growth. So, you are right, by that definition this is a recession, and should be called such. Maybe something like "a recession - with an explanation." Alternatively, a recession with an asterisk. An asterisk that notes the otherwise high employment figures.
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caltrek
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Re: Economic and jobs news thread

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Fears of More Recessionary Fed Rate Hikes as Jobs Numbers Smash Expectations
by Jake Johnson
August 5, 2022

Extract:
(Common Dreams) Heidi Shierholz, president of the Economic Policy Institute (EPI), said Friday that while the new jobs figures show that "we're almost surely not in a recession now, the Fed may have already overshot and secured a recession in coming months" as rate hikes slowly work their way through the economy, slashing investment by making borrowing more expensive.

"Regardless, they should slow the pace of rate increases substantially and be ready to go into neutral or even cut rates," Shierholz argued. "A recession caused by the Fed raising rates too aggressively would undo a great deal of the enormous gains that have occurred in the current recovery."

Fed chair Jerome Powell has publicly admitted that rate hikes are not likely to impact key drivers of record-high inflation such as gas and food prices, leading lawmakers and economists to caution that the central bank is risking a recession and huge job loss for no reason.

The Fed chief has conceded that the central bank's actions could push the U.S. into recession, though he has said that is not policymakers' intention.
"The Fed's single tool for fire-fighting—interest-rate increases—is aimed in the wrong direction," former U.S. Labor Secretary Robert Reich wrote in an op-ed for The Guardian after the Fed's latest policy meeting on July 27. "It's hitting working people rather than corporations responsible for most price increases (over and above the rising costs of global supplies)."
Read more here: https://www.commondreams.org/news/2022 ... ectations
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caltrek
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Re: Economic and jobs news thread

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They are right when they say the Fed is not the appropriate institution to address the inflationary oil and food price situation. This is something that is more appropriately addressed through fiscal policy. Now, if only those deadbeats Joe Manchin and Kristin Sinema would come along and agree with Joe Biden on some sort of inflation reduction act.

Oh wait, there is news that they have come around (see below). My apologies for the insults. Of course, I will believe it when I see it.

Kyrsten Sinema Is on Board with Democrats’ Climate, Tax, and Inflation Reduction Bill
by Abigail Weinberg
August 5, 2022

Introduction:
(Mother Jones) Sen. Kyrsten Sinema (D-Ariz.), a crucial vote in an evenly divided Senate, announced last night that she would support a key piece of Biden’s legislative agenda—with some caveats.

Last week, Sen. Joe Manchin (D-W.Va.), a longtime holdout, stunned his colleagues when he announced that he had struck a deal with Senate Majority Leader Chuck Schumer (D-N.Y.) on the “Inflation Reduction Act of 2022,” which “includes roughly $370 billion in energy and climate spending, $300 billion in deficit reduction, three years of subsidies for Affordable Care Act premiums, prescription drug reform and significant tax changes,” per Politico.

But the bill was not going to move forward without the support of Sinema, who demanded that Democrats drop a provision that would place new limitations on the carried interest loophole—which many of her donors happen to benefit from—and garner roughly $14 billion in funding. Instead, the bill will reportedly include a 1 percent excise tax on stock buybacks—the practice of corporations repurchasing their own stock to drive up share prices—that’s set to garner $73 billion in federal revenue. Sinema also reportedly managed to win $5 billion in drought resiliency funding, a boon to Arizona.

Even in its altered form, the bill is a huge deal, promising to direct billions toward combating climate change, extend Obamacare subsidies through Biden’s term, and reduce prescription drug costs. The Senate parliamentarian still has to ensure that all the bill’s provisions all qualify for the reconciliation process that would allow the legislation to evade a GOP filibuster. But for now, things are moving. Schumer plans to introduce the final bill tomorrow.
Read more here: https://www.motherjones.com/politics/2 ... ion-deal/

caltrek's comment: Keeping carried interest loophole is not a good thing, so there is still some reason for shame there. A drought resiliency fund is probably a good idea, so Sinema has most likely earned some bragging rights there.
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weatheriscool
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Re: Economic and jobs news thread

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US Productivity Falls for a Second Quarter, Labor Costs Surge

-- Consecutive declines in output per hour worst back to 1947
-- Unit labor costs jumped nearly 11% in second quarter

By Reade Pickert
August 9, 2022 at 8:32 AM EDTUpdated onAugust 9, 2022 at 9:21 AM EDT
US productivity slumped for a second-straight quarter as the economy shrank, driving another surge in labor costs that risks keeping inflation elevated and further complicates the Federal Reserve’s efforts to tame price increases.

Productivity, or nonfarm business employee output per hour, decreased at a 4.6% annual rate in the second quarter after falling at a 7.4% pace in the previous three months, Labor Department figures showed Tuesday. ... That marked the weakest back-to-back readings in data back to 1947. On a year-over-year basis, output per hour fell by the most on record.

With the drop in productivity, unit labor costs jumped at a 10.8% rate in the second quarter from the prior three months. The increase from a year earlier was the biggest since 1982.

Labor costs are the biggest expense for many businesses, so firms often adopt new technologies and upgrade equipment to make their workers more productive, helping blunt the inflationary impact of higher wages.
{snip}

Read more: https://www.bloomberg.com/news/articles ... osts-surge
weatheriscool
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Inflation cools in July as CPI rises 8.5%

Alexandra Semenova · Reporter
Wed, August 10, 2022 at 8:33 AM
U.S. consumer prices rose at a slower pace in July as gas prices fell and supply chains improved, but inflation held near its highest level in 40 years.

The Bureau of Labor Statistics' July Consumer Price Index (CPI) reflected a year-over-year increase of 8.5% last month, down from June's 40-year high of 9.1%. Consensus economists were expecting last month's reading to show an 8.7% increase, according to estimates compiled by Bloomberg.

Core CPI, which excludes the volatile food and energy components of the report, rose 5.9%, unchanged from 5.9% in June.


Read more: https://finance.yahoo.com/news/july-inf ... 30998.html
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caltrek
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On Wednesday, August 10, 2022, the marketets were up again: https://www.morganstanley.com/content/ ... -20220810
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weatheriscool
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Re: Economic and jobs news thread

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Jobless claims rise again to highest level since November
Source: The Hill

FINANCE

Jobless claims rise again to highest level since November

BY KARL EVERS-HILLSTROM - 08/11/22 9:09 AM ET
New applications for unemployment benefits rose slightly in the first month of August to the highest level since November, according to Labor Department data released Thursday.

Jobless claims totaled 262,000 in the week ending Aug. 6, up 14,000 from the previous week’s revised total. Claims continue to hover around pre-pandemic levels, but they’ve risen in five out of the last six weeks.

The four-week average of claims rose 4,500 to 252,000, according to the report.

Economists are closely monitoring jobless claims to gauge whether interest rate hikes are causing businesses to cut back on jobs, an indicator of an economic slowdown. The Federal Reserve has raised rates by 2.25 percent to fight 40-year high inflation.
{snip}

Read more: https://thehill.com/policy/finance/3596 ... -november/
weatheriscool
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New York Manufacturing Plunges by Second-Most in Data to 2001

-- Empire State business activity index dives more than 42 points
-- New orders and shipments gauges underscore weaker demand

By Vince Golle
August 15, 2022, 12:30 PM UTC Updated on August 15, 2022, 1:16 PM UTC

A gauge of New York state manufacturing activity plunged by the second-most in data back to 2001, with sharp declines in orders and shipments that indicate an abrupt downturn in demand.

The Federal Reserve Bank of New York’s August general business conditions index slumped more than 42 points to minus 31.3, with the drop just behind that seen in April 2020, a report showed Monday. A reading below zero indicates contraction, and the figure was far weaker than the most downbeat forecast in a Bloomberg survey of economists.
{snip}

Read more: https://www.bloomberg.com/news/articles ... ta-to-2001
weatheriscool
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U.S. retail sales flat in July; core sales rise

Source: Reuters

WASHINGTON, Aug 17 (Reuters) - U.S. retail sales were unchanged in July as declining gasoline prices weighed on receipts at service stations, but consumer spending appeared to holding up, which could further assuage fears that the economy was already in recession. The Commerce Department on Wednesday said that retail sales' flat reading last month followed a downwardly revised 0.8% increase in June. Retail sales in June were previously reported to have advanced 1.0%.

Economists polled by Reuters had forecast that sales would gain 0.1%, with estimates ranging from as low as a 0.3% decline to as high as a 0.9% increase. Retail sales are mostly goods and are not adjusted for inflation. Monthly consumer prices were unchanged in July as gasoline prices retreated from record highs, lowering the annual rate of increase in inflation to 8.5% from 9.1% in June.

The national average gasoline price dropped to about $4.27 per gallon in the last week of July after hitting an all-time high just above $5.00 in mid-June, according to data from motorist advocacy group AAA. Prices at the pump were averaging $3.943 per gallon on Wednesday. Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.8% last month after rising 0.7% in June.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have risen 0.8% in June. Consumer spending grew at its slowest pace in two years in the second quarter. The modest rise was offset by weakness in business and government spending as well as residential investment, resulting in the second straight quarter of GDP contraction. But with the labor market maintaining a brisk pace of job growth in July and industrial production hitting a record high, the economy is probably not in recession.
Read more: https://www.reuters.com/markets/us/us-r ... 022-08-17/
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