Economic and jobs news thread

caltrek
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Re: Economic and jobs news thread

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Federal Reserve Chair Jerome Powell Says Inflation, Though Elevated, Will Likely Moderate
by Christopher Rugaber
July 14, 2021

https://news.yahoo.com/powell-says-infl ... 49836.html

Introduction:
WASHINGTON (AP via Yahoo) — Federal Reserve Chair Jerome Powell suggested Wednesday that inflation, which has been surging as the recovery strengthens, “will likely remain elevated in coming months" before “moderating."

At the same time, Powell signaled no imminent change in the Fed's ultra-low-interest rate policies.

In testimony before the House Financial Services Committee, Powell reiterated his long-held view that high inflation readings over the past several months have been driven largely by temporary factors, notably supply shortages and rising consumer demand as pandemic-related business restrictions are lifted.

Once such factors normalize, Powell said, inflation should ease. Yet the Fed chair did not repeat in his testimony an assertion he made three weeks ago before another House panel, that inflation would “drop back” to the Fed's target of 2%.

The Fed has said it will keep its benchmark short-term rate pegged near zero until it believes maximum employment has been reached and annual inflation moderately exceeds 2% for some time. The central bank's policymakers have said they are prepared to accept inflation above its target to make up for years of inflation below 2%.
Image
Federal Reserve Board chairman Jerome Powell testifies on the Federal Reserve's response to the coronavirus pandemic during a House Oversight and Reform Select Subcommittee on the Coronavirus hearing on Capitol Hill in Washington, in this Tuesday, June 22, 2021, file photo.
Credit:Graeme Jennings/Pool via AP, File
weatheriscool
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Re: Economic and jobs news thread

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CEOs sound the alarm on inflation
Source: Axios

CEOs are speaking up about what we’ve seen in the government data: inflation. And some of them warn elevated levels of inflation could persist.

Why it matters: Prices for goods and services have been rising at a historic pace, a phenomenon that many economists have characterized as transitory.

...

"The inflation could be worse than people think," JPMorgan Chase CEO Jamie Dimon said on an earnings call Tuesday. “I think it'll be a little bit worse than what the Fed thinks. I don't think it's only temporary."

"[Policymakers] are saying jobs are more important than consumerism," BlackRock CEO Larry Fink told CNBC on Wednesday. "That is going to probably lead to systematically more inflation."

"Is there somewhat more inflation out there? There is," PepsiCo CFO Hugh Johnston said on an earnings call Tuesday. "Are we going to be pricing to deal with it? We certainly are."

"Will Conagra take list pricing increases? The short answer is, yes," Conagra CEO Sean Connolly said. "And we have more pricing coming."
Read more: https://www.axios.com/ceos-warn-inflati ... be775.html
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weatheriscool
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Re: Economic and jobs news thread

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U.S. Jobless Claims Rose to 419,000 Last Week
Source: The Wall Street Journal.

Jobless claims rose to 419,000 last week, returning to a level last recorded in early June.

With job gains and consumer spending at high levels, along with more Americans getting fully vaccinated, the economy has expanded robustly so far in 2021 and it is expected to continue into next year. The Delta variant of Covid-19, which has become the primary cause of illness tied to the virus, isn’t expected to jeopardize the U.S. economic recovery.

“I would expect more jobs to be created in the months coming forward,” said Alejandro Gutierrez-Li, an economist at North Carolina State University. He said that some employers, such as resorts and hotels, may lose workers to other growing industries as job openings trend at record highs.

U.S. employers added 850,000 jobs in June, the largest gain in 10 months, and workers wages rose briskly, more signs of a strengthening labor market. Economists surveyed in July expected employers to add an average of nearly 500,000 jobs a month over the next year, which would be a historically fast pace of employment gains.

The number of Americans receiving unemployment benefits has been declining in recent weeks. About half of states have acted to end enhanced and extended unemployment benefits early. Under those pandemic programs, recipients are paid $300 a week on top of state benefits and allowed to receive payments for longer than the six months or less most states allow.
{snip}

Read more: https://www.wsj.com/articles/weekly-job ... 1?mod=e2tw
weatheriscool
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Re: Economic and jobs news thread

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Yellen outlines to Congress emergency measures on debt limit
Source: AP

By MARTIN CRUTSINGER and ALAN FRAM
WASHINGTON (AP) — Treasury Secretary Janet Yellen told Congress on Friday that she will start taking emergency measures next week to keep the government from an unprecedented default on the national debt, warning that a default would cause “irreparable harm to the U.S. economy and the livelihoods of all Americans.”

In a letter to House and Senate leaders, Yellen said her actions will buy time until Congress can pass legislation to either raise the debt limit or suspend it again for a period of time.

The debt limit has been suspended for the past two years but will go back into effect on July 31. The total debt subject to the limit currently stands at $28.4 trillion.

Yellen said her first move on July 30 will be to suspend the sale of state and local government securities, which are used by some local jurisdictions to meet some of their financing needs but increase the level of debt held by the federal government.



Read more: https://apnews.com/article/lifestyle-bu ... 9c752449ba
weatheriscool
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Re: Economic and jobs news thread

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U.S. new home sales drop to 14-month low in June


July 26, 2021
New home sales drop 6.6% in June; May revised down
Median house price rises 6.1% to $361,800 from year ago

WASHINGTON, July 26 (Reuters) - Sales of new U.S. single-family homes tumbled to a 14-month low in June and sales in the prior month were weaker than initially estimated, suggesting that expensive building materials and the resulting surge in prices for properties were restraining the housing market.

New home sales fell 6.6% to a seasonally adjusted annual rate of 676,000 units last month, the lowest level since April 2020, the Commerce Department said on Monday. May's sales pace was revised down to 724,000 units from the previously reported 769,000 units. Sales have now dropped for three straight months.

Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, increasing 3% to rate of 800,000 units in June.

"Until builder costs and supply-chain problems become less of an impediment, it is hard to see new sales picking up significantly in the near term," said David Berson, chief economist at Nationwide in Columbus, Ohio.
{snip}

Read more: https://www.reuters.com/business/us-new ... 021-07-26/
caltrek
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Joined: Mon May 17, 2021 1:17 pm

Re: Economic and jobs news thread

Post by caltrek »

Looks like using the filing of unemployment insurance claims as an indicator of economic health needs to further take into account fluctuating levels of attempted fraud.

How Unemployment Insurance Fraud Exploded During the Pandemic
by Cezary Podkul
July 26, 2021

https://www.propublica.org/article/how- ... e-pandemic

Introduction:
(ProPublica) A Bronx man allegedly received $1.5 million in just ten months. A California real estate broker raked in more than $500,000 within half a year. A Nigerian government official is accused of pocketing over $350,000 in less than six weeks.

What they all had in common, according to federal prosecutors, was participation in what may turn out to be the biggest fraud wave in U.S. history: filing bogus claims for unemployment insurance benefits during the COVID-19 pandemic. (The broker has pleaded guilty, while the Bronx man and Nigerian official have pleaded not guilty.)

Fraudsters have filed in high volumes, sometimes obtaining payments from multiple states, despite the fact that a jobless person is barred from getting assistance in more than one state. One person, according to the U.S. Department of Labor, used a single Social Security number to file unemployment insurance claims in 40 states. Twenty-nine states paid up, sending $222,532.

But the problem extends far beyond a plague of solo scammers. A ProPublica investigation reveals that much of the fraud has been organized — both in the U.S. and abroad. Fraudsters have used bots to file online claims in bulk. And others, located as far away as China and West Africa, have organized low-wage teams to file phony claims.

In addition, the fraud has been enabled by a burgeoning online infrastructure, whose existence has not previously been reported in the mainstream press. Much of it is geared toward exploiting aging or obsolete state unemployment systems whose weaknesses have drawn warnings for decades. Communities have sprouted on messaging apps such as Telegram, where fraudsters trade tips on how to cash in. Hustlers advertise their techniques — or “sauces” (apparently short for “secret sauce”) — for filing bogus claims, along with state-specific instructions on how to get around security checks, according to a ProPublica review of messages on more than 25 such chat forums.
weatheriscool
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Re: Economic and jobs news thread

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U.S. economy grew 6.5 percent between April and June, marking full recovery from the pandemic
Source: Washington Post
The U.S. economy was officially back and fully recovered from the pandemic as of June, although a recent surge in covid cases could threaten new uncertainty ahead. The economy grew 6.5 percent in the quarter ending in June, as covid vaccinations and unleashed consumer spending added momentum to the recovery. For the first time since the pandemic took hold, economic output eclipsed its pre-pandemic high, after adjusting for inflation.

The Gross Domestic Product (GDP) report, released Thursday by the Bureau of Economic Analysis, offered a backward-looking snapshot of the months when hiring picked up speed and people felt comfortable booking vacations, eating at restaurants and buying tickets to concerts or movies. Some Americans got $1,400 stimulus checks in the late spring or received extended unemployment benefits, providing a financial cushion that helped households step back into their old routines -- and spend.

Economists still hope for strong continued growth in 2021. But that optimism has been complicated by surging covid cases and the spread of the delta variant of the coronavirus, particularly among unvaccinated people. On Tuesday, the Centers for Disease Control and Prevention urged indoor masked wearing for people in covid hot spots and other circumstances.

The economic repercussions are unclear. The Biden administration is pledging a bold economic agenda and urging Americans to get vaccinated. Policymakers at the Federal Reserve and elsewhere have made clear that controlling the pandemic is key to stabilizing the recovery.
Read more: https://www.washingtonpost.com/business ... -recovery/
weatheriscool
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Re: Economic and jobs news thread

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Key inflation indicator up 3.5% year over year in June for fastest gain since 1991
Source: CNBC

PUBLISHED FRI, JUL 30 2021 8:32 AM EDT UPDATED 3 MIN AGO

Jeff Cox
@JEFF.COX.7528 https://facebook.com/jeff.cox.7528
@JEFFCOXCNBCCOM https://twitter.com/JeffCoxCNBCcom

KEY POINTS

-- An inflation gauge followed closely by the Federal Reserve increased 3.5% year over year in June, slightly below the 3.6% estimate.

-- Consumer spending rose 1%, faster than expected as personal income also increased.

-- Labor costs rose as well, with compensation rising 2.9% from a year earlier.

An inflation indicator that the Federal Reserve uses as its key guide rose 3.5% in June, a sharp acceleration that was nonetheless right around Wall Street expectations, the Commerce Department reported Friday.

The personal consumption expenditures price index, which excludes food and energy, was expected to increase 3.6% at a time when the U.S. economy has seen its highest inflation pressures in more than a decade. ... That gain was slightly ahead of the 3.4% May increase and represents the biggest move since July 1991.

Fed officials have said they expect the inflation surge to be transitory as it has come largely from industries sensitive to the economic reopening, as well supply chain bottlenecks and other issues likely to fade. The central bank targets 2% as its desired inflation goal, though officials are willing to tolerate higher levels temporarily as the economy tries to get back to full employment.

The core PCE index rose 0.4% month over month, which was below the 0.6% Dow Jones estimate, indicating that inflationary pressures may be starting to ebb at least a bit. ... Personal income and spending numbers, however, were better than expectations as consumers flush with stimulus cash kept the economic rebound going.

Income rose 0.1%, better than the estimate for a 0.2% decline, while spending increased 1% against a 0.7% forecast. ... Employment inflation also continued to increase.

{snip}

Read more: https://www.cnbc.com/2021/07/30/key-inf ... imate.html


BIG LETTERS: FROM JUNE 2020 TO JUNE 2021. ON AN ANNUAL BASIS. THIS IS NOT AN INCREASE IN JUNE 2021.

Hat tip, another site.

Earlier, kind of misleading LBN news snippet:

The Fed's favorite price index rose 4 percent.

https://www.nytimes.com/2021/07/30/busi ... rcent.html

Daily Business Briefing

The Fed's favorite price index rose 4 percent.

By Jeanna Smialek
July 30, 2021, 8:37 a.m. ET

The Federal Reserve's favorite inflation index climbed by 4 percent in June compared with a year earlier, as a rebounding economy and soaring demand for goods helped to push prices higher.

The gains in the Personal Consumption Expenditures inflation index were the fastest since 2008, but in line with economists expectations. That rapid pace is not expected to last, but how much and how quickly it will fade is the economic question of the moment.

Inflation has been surprisingly rapid this year. Economists knew prices would post strong increases as they were measured against weak figures from 2020, when costs for many common purchases slumped. But the jump has been more intense than most were expecting.

That's partly because supply bottlenecks have emerged across America's reopening economy. Computer ship shortages pushed up the prices of electronics and delayed automobile production, causing used car prices to surge. Employers are struggling to hire back workers fast enough to meet returning demand, and prices for restaurant meals and some other services have begun to move higher.

June's personal consumption expenditure price data may be a high point in the inflationary saga. Last year's low figures are fading from the data, and many economists expect the rapid pace of price gains to begin to moderate in the coming months.

On a monthly basis, inflation climbed 0.5 percent from May to June, slightly less than the 0.6 percent economists in a Bloomberg survey had expected. The core inflation index, which strips out volatile food and fuel, climbed 3.5 percent over the past year.

{snip}

-- -- -- -- -- --

From the source:

https://www.bea.gov/news/2021/personal- ... ual-update

News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, FRIDAY, JULY 30, 2021
BEA 21-37

Personal Income and Outlays, June 2021 and Annual Update

Personal income increased $26.1 billion (0.1 percent) in June according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) decreased $2.6 billion (less than 0.1 percent) and personal consumption expenditures (PCE) increased $155.4 billion (1.0 percent).

Real DPI decreased 0.5 percent in June and Real PCE increased 0.5 percent; goods decreased 0.2 percent and services increased 0.8 percent (tables 5 and 7). The PCE price index increased 0.5 percent. Excluding food and energy, the PCE price index increased 0.4 percent (table 9).
weatheriscool
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Re: Economic and jobs news thread

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U.S. pending home sales decline in June
Source: Reuters


2 MIN READ

July 29 (Reuters) - Contracts to purchase previously owned U.S. homes declined in June in step with a spike in home prices after rebounding strongly in the prior month.

The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on contracts signed last month, fell 1.9% to 112.8. Economists polled by Reuters had forecast pending home sales would increase 0.3%.

Pending home sales for May were revised to show an increase of 8.3% instead of the 8.0% gain previously reported.

Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later.

“Pending sales have seesawed since January, indicating a turning point for the market,” Lawrence Yun, NAR’s chief economist, said in a statement. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.”

Compared with one year ago, pending home sales were down 1.9%.
Read more: https://www.reuters.com/article/usa-eco ... SL1N2P42UX
caltrek
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Re: Economic and jobs news thread

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Alexandria Ocasio-Cortez Correctly Breaks Down What’s Really Going on With Inflation
by Alex Henderson
July 30, 2021

https://www.alternet.org/2021/07/alexan ... z-economy/

Introduction:
(Alternet) A talking point that right-wing media outlets have repeatedly used against Rep. Alexandria Ocasio-Cortez of New York City is that the progressive congresswoman "doesn't understand economics." But Ocasio-Cortez got into specifics about inflation during a recent interview with CNN's Don Lemon. And Bloomberg TV's Joe Weisenthal, in response, tweeted that she has a "much better" grasp of the subject than "the vast majority of people who are paid to opine about inflation professionally."

Far-right MAGA Republicans have been claiming that President Joe Biden's Build Back Better agenda is a recipe for major inflation, noting recent price increases. Lemon asked AOC to discuss her "biggest concerns over inflation."

The two-term congresswoman, who was reelected in 2020, responded, "Well, here's the deal with inflation. If we do not get the root cause of these price increases right, then policy decisions could be made that could really negatively impact your life, boost unemployment, and again increase interest rates. And we do not want that. So, it's really important that we get the diagnosis right into what's going into these price increases."

AOC has been stressing that Federal Reserve Chairman Jerome Powell should not increase interest rates too rapidly. In response to the recession brought on by the COVID-19 pandemic, Powell brought interest rates down to near zero in the United States.

The 31-year-old Bronx/Queens congresswoman told Lemon, "When you look at what actual prices are going up, it's in very specific sectors. If this was an overall inflationary issue, we would see prices going up in relatively equal amounts across the board no matter what the good is. But we know what's getting expensive: things like the cost of lumber, items like cars — whether they are new or used — and other sorts of items that rely on shipping and shipping containers coming in from overseas. These are very sector-specific, which means that these are due to supply chain issues."
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