Economic and jobs news thread

weatheriscool
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New Fed research flags rising risk of U.S. recession

Fri, December 30, 2022 at 6:04 AM EST
By Michael S. Derby
NEW YORK (Reuters) - Just over half of the 50 U.S. states are exhibiting signs of slowing economic activity, breaching a key threshold that often signals a recession is in the offing, new research from the St. Louis Federal Reserve Bank report said.

That report, released Wednesday, followed another report from the San Francisco Fed from earlier in the week that also delved into the rising prospect that the U.S. economy may fall into recession at some point in coming months. ... The St. Louis Fed said in its report that if 26 states have falling activity within their borders, that offers “reasonable confidence” that the nation as a whole will fall into a recession.

Right now, the bank said that as measured by Philadelphia Fed data tracking the performance of individual states, 27 had declining activity in October. That’s enough to point to a looming downturn while standing short of the numbers that have been seen ahead of some other recessions. The authors noted that 35 states suffered declines ahead of the short and sharp recession seen in the spring of 2020, for example.

Meanwhile, a San Francisco Fed report, released Tuesday, observed that changes in the unemployment rate can also signal a downturn is on the way, in a signal that offers more near-term predictive value than the closely-watched bond market yield curve.

{snip}
Read more: https://finance.yahoo.com/news/fed-rese ... 57142.html
weatheriscool
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Nonfarm payrolls rose 223,000 in December, as strong jobs market tops expectations
Source: CNBC

Payroll growth decelerated in December but was still better than expected, a sign that the labor market remains strong even as the Federal Reserve tries to slow economic growth.

Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000, while the unemployment rate fell to 3.5%, 0.2 percentage point below the expectation. The job growth marked a small decrease from the 256,000 gain in November, which was revised down 7,000 from the initial estimate.

Wage growth was less than expected in an indication that inflation pressures could be weakening. Average hourly earnings rose 0.3% for the month and increased 4.6% from a year ago. The respective estimates were for growth of 0.4% and 5%.

By sector, leisure and hospitality led with 67,000 added jobs, followed by health care (55,000), construction (28,000) and social assistance (20,000).

Read more: https://www.cnbc.com/2023/01/06/jobs-re ... tions.html
weatheriscool
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Unemployment rate falls below 7%
Source: Axios

Detroit's unemployment rate hit 6.4% in November — its first time below 7% in 22 years, according to Bureau of Labor Statistics figures Mayor Mike Duggan said Thursday.

Yes, but: It's "not something that we're celebrating and stopping, we're going to keep going," he said in a news conference.

While jobs have flooded out of the city and into the suburbs in recent decades, there's currently about 8,400 open jobs in the city.
"We have an opportunity we've never had," he added.
Read more: https://www.axios.com/local/detroit/202 ... low-7-2023
weatheriscool
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Consumer prices fell 0.1% in December, in line with expectations from economists

PUBLISHED THU, JAN 12 2023 8:31 AM EST UPDATED 2 MIN AGO

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

Inflation closed out 2022 in a modest retreat, with consumer prices posting their biggest monthly decline since early in the pandemic, the Labor Department reported Thursday. ... The consumer price index, which measures the cost of a broad basket of goods and services, fell 0.1% for the month, in line with the Dow Jones estimate. That equated to the largest month-over-month decrease since April 2020, as much of the country was in lockdown to combat Covid.

Even with the decline, headline CPI rose 6.5% from a year ago, highlighting the persistent burden that rising cost of living has placed on U.S. households. However, that was the smallest annual increase since October 2021. ... Excluding volatile food and energy prices, co-called core CPI rose 0.3%, also meeting expectations. It was up 5.7% from a year ago, once again in line.

CPI is the most closely watched inflation gauge as it takes into account moves in everything from a gallon of gas to a dozen eggs and the cost of airline tickets. ... The Federal Reserve prefers a different gauge that adjusts for changes in consumer behavior. However, the central bank takes in a broad array of information when measuring inflation, with CPI being part of the puzzle.

Markets are watching the Fed’s moves closely as officials battle against inflation that at its peak was the highest in 41 years. Supply chain bottlenecks, the war in Ukraine and trillions in fiscal and monetary stimulus helped contribute to surging prices that spanned across most areas of the economy.

{snip}
Read more: https://www.cnbc.com/2023/01/12/consume ... tions.html
weatheriscool
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U.S. inflation cooling as consumer prices fall; labor market still tight
Source: Reuters

U.S consumer prices fell for the first time in more than 2-1/2 years in December amid declining prices for gasoline and motor vehicles, offering hope that inflation was now on a sustained downward trend, though the labor market remains tight.

Americans also got some relief at the supermarket, with the report from the Labor Department on Thursday showing food prices posting their smallest monthly increase since March 2021. But rents remained very high and utilities were more expensive.

The report could allow the Federal Reserve to further scale back the pace of its interest rate increases next month. The U.S. central bank is engaged in its fastest rate hiking cycle since the 1980s.

"The mountain peak of inflation is behind us but the question is how steep the downhill is," said Sung Won Sohn, finance and economics professor at Loyola Marymount University in Los Angeles. "To be sure, the efforts by the Federal Reserve have begun to bear fruit, even though it will be a while before the promised land of a 2% inflation rate is here."
Read more: https://www.reuters.com/markets/us/us-c ... 023-01-12/
weatheriscool
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Real average hourly earnings for all employees increase 0.4% in December

Economic News Release USDL-23-0018

Real average hourly earnings for all employees increased 0.4 percent from November to December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.3 percent in average hourly earnings combined with a decrease of 0.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.1 percent over the month due to the change in real average hourly earnings combined with a decrease of 0.3 percent in the average workweek.

Real average hourly earnings decreased 1.7 percent, seasonally adjusted, from December 2021 to December 2022. The change in real average hourly earnings combined with a decrease of 1.4 percent in the average workweek resulted in a 3.1-percent decrease in real average weekly earnings over this period.
{snip}

Read more: https://www.bls.gov/news.release/realer.nr0.htm
weatheriscool
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Wholesale prices fell 0.5% in December, much more than expected
Source: CNBC
Prices for wholesale goods and services fell sharply in December, providing another sign that inflation, while still high, is beginning to ease. The producer price index, which measures final demand prices across hundreds of categories, declined 0.5% for the month, the Labor Department reported Wednesday.

Economists surveyed by Dow Jones had been looking for a 0.1% decline. Excluding food and energy, the core PPI measure rose 0.1%, matching the estimate. A sharp drop in energy prices helped bring the headline inflation reading down for the month.

The PPI’s final demand energy index plunged 7.9% on the month. Within that category, wholesale gasoline prices fell 13.4%. The final demand food index also fell, declining 1.2%. Inflation readings ahead could be less certain, though, as the cost for a gallon of gas is up about 21 cents from this time last month, and crude oil prices are up about 1.6% so far in January.

Still, the general trend in inflation has been slightly lower. The consumer price index decreased 0.1% in December, though it was still up 6.5% from a year ago – 5.7% excluding food and energy. CPI gauges the prices that consumers pay at the marketplace, while PPI measures what business pay for goods and services.
Read more: https://www.cnbc.com/2023/01/18/wholesa ... ected.html
weatheriscool
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Existing home sales fell for the 11th consecutive month in December

Source: CNBC
Sales of previously owned homes dropped 1.5% in December from the previous month, according to the National Association of Realtors. Sales ended the year at a seasonally adjusted, annualized pace of 4.02 million units, which was 34% lower than December 2021.

It is the slowest pace since November 2010, when the nation was struggling through a housing crisis brought on by faulty subprime mortgages. Total sales for the year were down 17.8% from 2021.

Home sales have now fallen for 11 straight months, due to much higher mortgage rates, which began rising last spring and had more than doubled by fall. Sky-high prices, driven by high demand during the first years of the pandemic only weakened affordability further and caused supply to fall sharply.

“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said Lawrence Yun, chief economist for the Realtors. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.” Mortgage rates have fallen a full percentage point since their high last October, but they are still roughly double what they were one year ago.
Read more: https://www.cnbc.com/2023/01/20/existin ... -2010.html
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caltrek
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Google's Stock Climbed After It Fired 12,000 Employees. Was It Worth It?
by Sonali Kolhatkar
January 22, 2023

Introduction:
(Alternet) Alphabet, the parent company of Google, has announced it will lay off about 6 percent of its global workforce. Google CEO Sundar Pichai sent his employees a letter warning of imminent layoffs and saying how “deeply sorry” he was. He offered for workers to “feel free to work from home” for the day in order to process the tough news that about 12,000 of them would soon lose their jobs.

This was roughly the same number of new employees that Alphabet lured to join its workforce last quarter. According to Investor’s Business Daily, the company “added 12,765 employees, which was above Wall Street estimates.”

Pichai was frank about why he had to fire so many people. He admitted in his letter that the company had a “huge opportunity” thanks in part to Google’s “early investments in AI,” and that to “fully capture” this opportunity, he would “need to make tough choices” such as cutting 12,000 jobs. Surely his laid-off employees could understand?

Wall Street thanked Pichai for his ruthlessness, with CNBC reporting that “Google shares were up more than 5 percent in early trading after the news” of layoffs.

It’s a familiar story elsewhere in the technology industry—once considered the most lucrative sector for secure and well-paid employment. Microsoft plans to cut 10,000 jobs. Amazon will ax more than 18,000 workers. Meta, Facebook’s parent company, fired 11,000 workers last November. And, Twitter will be firing even more workers than the number initially laid off when Elon Musk first took over the company in 2022.
Read more here: https://www.alternet.org/googles-stock ... -firing/
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weatheriscool
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U.S. GDP rose 2.9% in the fourth quarter, more than expected even as recession fears loom
Source: CNBC

The U.S. economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead.

Fourth-quarter gross domestic product, the sum of all goods and services produced for the October-to-December period, rose at a 2.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had expected a reading of 2.8%.


This is breaking news. Please check back here for updates.
Read more: https://www.cnbc.com/2023/01/26/gdp-q4- ... -loom.html
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