Economic and jobs news thread

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caltrek
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On Friday, August 20, 2022, the market dropped: https://www.morganstanley.com/content/m ... e-20220819
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Durable goods orders unexpectedly stall in July, core figure up more than expected

Aug. 24, 2022 8:31 AM ET By: Liz Kiesche, SA News Editor

-- July Durable Goods Orders: 0.0% to $273.5B vs. +0.6% expected and +2.2% prior (revised from +1.9%).

-- Durable goods orders in July fell less than $0.1B, or were virtually unchanged, from the prior month. That follows four straight months of increases.

-- Core durable goods: +0.3% vs. +0.2% expected and +0.3% prior (unchanged).

-- Durable goods, excluding defense: +1.2% vs. +0.7% in June (revised from +0.4%).

-- Non-defense orders, excluding aircraft: +0.4% vs. +0.3% expected and +0.9% prior (revised from +0.5%).

-- Shipments of manufactured durable goods, up 14 of the last 15 months, rose 0.4% to $270.5B. That's after a 0.3% increase in June. -- Transportation equipment, up nine of the last 10 months, drove the increase, rising 1.1% to $86.3B.

-- Last week (Aug. 16), Industrial production rose more than expected in July
Read more: https://seekingalpha.com/news/3876162-d ... ll-in-july
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'All of Us Are Paying the Price' as Corporate Profits Surge to Record-High $2 Trillion
by Jake Johnson
August 26, 2022

Introduction:
(Common Dreams) Federal data published Thursday shows that nonfinancial corporate profits in the U.S. surged to an all-time record of $2 trillion in the second quarter of 2022 as companies continued jacking up prices, pushing inflation to a 40-year high to the detriment of workers and consumers.

According to figures released by the Commerce Department's Bureau of Economic Analysis (BEA), corporate profit margins over the past three months were the widest they've been since the 1950s as ongoing price hikes pad the bottom lines of large businesses—and eat into the paychecks of employees.
"We can argue until the cows come home about the cause of inflation," Chris Becker, senior economist at the Groundwork Collaborative, wrote in response to the new data. "But we can't lose sight of the basic moral point that it is outrageous that corporations are seeing skyrocketing profits while purchasing power for so many American households is declining."

Bloomberg noted Thursday that "with household budgets squeezed by the rising cost of living, some firms have been able to offset any slip in demand by charging more to the customers they've retained."

"Across the economy, adjusted pretax corporate profits increased 6.1% in the April-to-June period from the prior quarter—the fastest pace in a year—after falling 2.2% in the first three months of the year," the outlet continued. "Profits are up 8.1% from a year earlier."
Read more here: https://www.commondreams.org/news/2022 ... -trillion
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Fed Chief Powell: Bringing Down Inflation Will Require Economic Pain
by Neil Irwin and Courtenay Brown
August 26, 2022

Introduction:
(Axios) Bringing down inflation will require some economic pain, Federal Reserve chair Jerome Powell said on Friday in a tough-talking speech that signals the Fed is nowhere near relenting on interest rate increases.

Why it matters: In a much-awaited address, Powell was blunt about the likelihood that bringing down inflation will come at the expense of the solid labor market that's been beneficial to workers and softer business conditions. But he indicated the Fed does not intend to reverse course and cut rates just because of such softening.

Driving the news: In a much-awaited speech before leading economists gathered in Jackson Hole, Wyoming, on Friday, Powell was uncommonly succinct and direct, aiming to convey nothing but resolve in the central bank's efforts to bring down inflation.

What they're saying: "Reducing inflation is likely to require a sustained period of below-trend growth," Powell said, according to a prepared text. "Moreover, there will very likely be some softening of labor market conditions."

• "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."
Read more here: https://www.axios.com/2022/08/26/fed-p ... inflation
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Inflation falls for first time in more than two years, key U.S. gauge shows, due to sinking gas pric
Source: Market Watch

prices

The numbers: A key gauge of U.S. inflation fell 0.1% in July thanks to tumbling gasoline prices, marking the first decline in more than two years and giving Americans some relief from a rapidly rising cost of living.

The drop in the so-called personal-consumption price index was the first since April 2020, when the U.S. economy was locked down after the initial outbreak of the coronavirus.

Economists polled by The Wall Street Journal had predicted no change in July.

A narrower measure of inflation that omits volatile food and energy costs, known as the core PCE, edged up 0.1% . That was below Wall Street’s 0.2% forecast.
Read more: https://www.marketwatch.com/story/infla ... 1661517617
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Asian Shares Slide on Wall Street Drop that Ended Last Week
August 29, 2022

Introduction:
(AP via the Asahi Shimbun) Asian shares declined Monday after the head of the U.S. Federal Reserve indicated high interest rates will continue for some time to curb inflation.

The plunge in early trading in Asia paralleled the drop on Wall Street, where the Dow Jones Industrial Average ended the week sinking more than 1,000 points. A slowdown in the U.S. is damaging to Asia’s export-reliant economies.

The message from Federal Reserve Chair Jerome Powell in a speech Friday had been expected, though some had wished for words that weren't quite so clear.

“The market apparently was looking for something a little more neutral. After all the talk of a ‘pause’ and ‘pivot’, none of which ever made any sense with a Fed that has said several times it will keep hiking rates even if it means some economic pain, we are back to square one with a Fed outlook to keep tightening,” said Clifford Bennett, chief economist at ACY Securities.

“The Fed was always going to keep raising rates aggressively, but the market decided to price in a slowing in hikes, and even a reversal.”

The article goes on to give further detail in the drop in both Asian and U.S. markets. It also briefly reports on a drop in Chinese industrial profits.

Read more here: https://www.asahi.com/ajw/articles/14705748
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Re: Economic and jobs news thread

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Job vacancies rose in July, dashing Fed hopes for cooling
Source: AP by way of MSN
The number of open jobs in the United States rose in July after three months of declines, a sign that employers are still urgently seeking workers despite a weakening economy and high inflation.

The increase that the government reported Tuesday will be a disappointment for Federal Reserve officials, who are seeking to cool hiring and the economy by raising short-term interest rates to try to slow borrowing and spending, which tend to fuel inflation. Fed officials hope that their policies will serve primarily to reduce job openings and spare workers the pain of widespread layoffs and higher unemployment.

There were 11.2 million open jobs available on the last day of July — nearly two jobs, on average, for every unemployed person — up from 11 million in June. June's figure was also revised sharply higher.

"The Fed has made very little progress in terms of narrowing the gap between labor supply and demand," Aneta Markowska, chief economist at investment bank Jefferies, wrote in a research note.
Read more: https://www.msn.com/en-us/money/markets ... r-AA11hlFN
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Revisions confirm steep decline in U.S. productivity in second quarter
Reuters
WASHINGTON, Sept 1 (Reuters) - U.S. worker productivity plunged in the second quarter, leading to the largest year-on-year decline on record, the government confirmed on Thursday, keeping upward pressure on labor costs.

Nonfarm productivity, which measures hourly output per worker, contracted at a 4.1% annualized rate last quarter, the Labor Department said. That was revised up from the previously reported 4.6% pace of contraction reported last month. Productivity tumbled at a 7.4% rate in the first quarter. ... Economists polled by Reuters had expected that pace of decline in productivity would be revised to 4.5%.

Productivity fell at 2.4% rate from a year ago, instead of the 2.5% pace estimated last month. It was still the biggest year-on-year decline since the government started tracking the series in the first quarter of 1948.

The decline in productivity, against the backdrop of fairly strong job growth, is likely unsustainable. That has made economists expect that hiring will slow down in the coming months. Job growth averaged about 461,300 per month in the first half of the year and has outperformed the overall economy.

{snip}
Read more: https://www.reuters.com/markets/us/revi ... 022-09-01/
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Private payrolls grew by just 132,000 in August, ADP says in reworked jobs report

PUBLISHED WED, AUG 31 2022 * 8:16 AM EDT * UPDATED 37 MIN AGO


KEY POINTS
-- Private payrolls grew by just 132,000 for the month, a deceleration from the 268,000 gain in July, ADP said in its monthly payroll report.
-- August's numbers add to the inflation worries, as the firm reported annual pay up 7.6% for the month.

Companies sharply slowed the pace of hiring in August amid growing fears of an economic slowdown, according to payroll processing company ADP. ... Private payrolls grew by just 132,000 for the month, a deceleration from the 268,000 gain in July, the firm said in its monthly payroll report. ... The Dow Jones estimate for the ADP count was 300,000.

"Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy's conflicting signals," said ADP's chief economist, Nela Richardson. "We could be at an inflection point, from super-charged job gains to something more normal."

August payroll numbers are notoriously volatile. ADP's release also comes at an uncertain time for a U.S. economy which saw negative growth for the first half of 2022 amid the highest inflation the nation has seen since the early 1980s. The more closely watched nonfarm payrolls report from the Bureau of Labor Statistics comes out Friday and is expected to show an increase of 318,000.

The ADP report had been on public hiatus through the latter part of the summer as the firm adjusted methodology and entered into a partnership with the Stanford Digital Economy Lab. (1) ... While much of the changes are technical in nature, ADP’s count differs in how it accounts for issues such as weather and natural disasters. The company also differs from the BLS in that ADP’s count includes any employees active in the company, while the BLS measures only those who have been paid that month.
{snip}

(1) https://adpemploymentreport.com/common/ ... Detail.pdf

Read more: https://www.cnbc.com/2022/08/31/adp-job ... ugust.html
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