Economic and jobs news thread

weatheriscool
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Price growth cooled to 5% in February, but consumer pain is set to linger
Source: NBC News
Consumer prices climbed 5% in March, the Bureau of Labor Statistics reported Wednesday, down from a 6% rate in February. The latest inflation reading represents the ninth-straight month of easing price growth, and is down from a 9% high last June.

But it's still well above the Federal Reserve’s 2% target. Among the key categories still seeing outsized price growth are food, which climbed 8.5% in March; and rent, which hit 8.3% growth, its largest-ever 12-month increase.

As a result, cooling inflation won't prove much solace to consumers, who can still expect to feel the pinch in their pocketbooks for a while longer.

Because inflation numbers are closely tied to the Federal Reserve's decisions about how high interest rates should be, a majority of investors are betting the Fed will raise rates by 0.25% again at its next meeting May 3.
Read more: https://www.nbcnews.com/business/econom ... -rcna79150
weatheriscool
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Yellen says US banks may tighten lending and negate need for more rate hikes
Source: Reuters
WASHINGTON, April 15 (Reuters) - U.S. Treasury Secretary Janet Yellen said banks are likely to become more cautious and may tighten lending further in the wake of recent bank failures, possibly negating the need for further Federal Reserve interest rate hikes.

Yellen said in a "Fareed Zakaria GPS" interview that policy actions to stem the systemic threat caused by last month's failures of Silicon Valley Bank and Signature Bank had caused deposit outflows to stabilize, "and things have been calm," according to a CNN transcript released on Saturday.

"Banks are likely to become somewhat more cautious in this environment," Yellen said in the interview, which is scheduled to air on Sunday. "We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come."

She said that would lead to a restriction in credit in the economy that "could be a substitute for further interest rate hikes that the Fed needs to make."

Read more: https://www.reuters.com/markets/us/yell ... 023-04-15/
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caltrek
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The Labor Supply Rebound from the Pandemic

April 17 , 2023

Introduction:
(The White House) Recent data provide encouraging news about a key economic variable: labor supply, specifically, the share of Americans participating in the job market. Labor demand—as proxied by job creation, nominal wage growth, and job vacancies—has been unusually strong in the post-pandemic recovery. But analysts have repeatedly raised concerns about the supply of labor, specifically regarding the extent to which labor force participation would recover.

Recent trends, however, reveal that most of the “missing workers” are back in the labor market. Overall labor force participation is back to its pre-pandemic forecasted level, and the closely-watched prime-age (25-54) labor force participation rate is now a tick above pre-pandemic levels (see Figure 1). Immigration flows, depressed during the pandemic, have also rebounded. Job openings are also moderating somewhat, signaling that labor demand and supply are becoming better aligned, a necessary condition for achieving a path to stable and steady growth.

Most of the “missing workers” are back

Throughout the economic recovery from the pandemic, there was much speculation about the “missing workers” who had not yet returned to the labor market. Numerous theories were offered to explain this apparent shortfall of workers. Analysts speculated that an epidemic of long Covid was keeping workers on the sidelines, that individuals were sitting out the labor market due to excess savings built up during the pandemic, that a “Great Resignation” was occurring as workers reassessed work/life balance or that the country had experienced a collective loss of work ethic.

Yet despite the enormous disruptions of the pandemic, these “missing workers” are now largely back in the labor market. The prime-age labor force participation rate, which had taken more than a decade to recover to pre-Great Recession levels, has now returned to those very high levels (see Figure 1). That labor force participation took only three years to recover to these highs is actually quite remarkable—and should reframe our thinking about the labor market in the aftermath of the pandemic.


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Further Extract:
The baby boom generation is aging out of the labor force, and the cohort of younger workers coming up to replace them is much smaller. This could pose a real challenge for industries with older workforces. Policies targeting barriers to labor supply, such as public investment in accessible, affordable childcare, and increasing immigration pathways are therefore warranted…
Immigration flows have largely recovered from the pandemic

Immigration bans and restrictive policies of the prior Administration decreased the flow of foreign-born workers who were critical for many industries, particularly food services and agriculture. Due in part to the Biden Administration’s efforts to reduce unnecessary barriers and accelerate visa processing, immigration flows have rebounded from the pandemic. As can be seen in Figure 3, the foreign-born labor force has now largely returned to 2012-2018 trends. This rebound in immigration flows has helped to ease labor supply pressures.


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Read more here: https://www.whitehouse.gov/cea/written ... pandemic/

Note: This is from a government source, therefore length restrictions due to copyright considerations do not need to apply.
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caltrek
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Whole Foods Plans to Lay Off Several Hundred Corporate Employees
by Annie Palmer
April 20, 2023

Introduction:
(CNBC) Amazon’s Whole Foods is letting go some corporate employees as part of a planned reorganization of select teams, and as its parent company closely examines costs.

Whole Foods plans to reorganize certain global and regional support teams over the next two months, the company’s executive team wrote in a memo to employees on Thursday. As a result, the upscale grocer is laying off several hundred employees from those teams, a spokesperson confirmed. The cuts translate to about less than half of a percent of the company’s global workforce, a Whole Foods Market spokesperson said.

“We often talk about how simplifying our work and improving how we operate is critical as we grow,” the executive team wrote in the memo. “We’ve made great progress in these areas through previous operational and organizational changes. As the grocery industry continues to rapidly evolve, and as we — like all retailers — have navigated challenges like the COVID-19 pandemic and continued economic uncertainty, it has become clear that we need to continue to build on these changes. With additional adjustments, we will be able to further simplify our operations, make processes easier, and improve how we support our stores.”

As part of the changes, Whole Foods, which operates across nine different regions, will shift to six regions. The move won’t result in any store closures or the letting go of any store or distribution center employees, according to the memo.

Whole Foods is tweaking its operational structure as it seeks to expand and better serve customers, the spokesperson said. The company has roughly 50 new stores in development, they added.

Read more here: https://www.cnbc.com/2023/04/20/whole- ... here.html
Don't mourn, organize.

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Disney begins second, larger round of layoffs, bringing total to 4,000 jobs cut
Source: CNBC

Disney began its second, larger wave of layoffs Monday, bringing total job cuts in recent weeks to 4,000 when the latest round is completed.

Earlier this year, Disney said it would slash 7,000 jobs from its workforce as part of a larger reorganization of the company that will see it cut costs by $5.5 billion. The announcement was made during Bob Iger’s first earnings call since returning as CEO.

Disney officials said Monday that they don’t take the departure of so many colleagues lightly. Eliminating 7,000 jobs from its workforce equates to about 3% of the roughly 220,000 people Disney employed as of Oct. 1, according to a securities filing, with roughly 166,000 in the U.S. and about 54,000 internationally. Disney notified employees of a first wave of layoffs on March 27, which saw cuts in its metaverse strategies unit and part of its Beijing office.

The second round, which will be completed Thursday, will affect various divisions across the company, including Disney Entertainment and ESPN, as well as Disney Parks, Experiences and Products. The jobs affected will span across the country from Burbank, California, to New York and Connecticut. CNBC reported last week layoffs would soon commence at ESPN.
Read more: https://www.cnbc.com/2023/04/24/disney- ... -wave.html
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U.S. GDP rose at a 1.1% pace in the first quarter as signs build that the economy is slowing
Source: CNBC
Growth in the U.S. slowed considerably during the first three months of the year as interest rate increases and inflation took hold of an economy largely expected to decelerate even further ahead.

Gross domestic product, a measure of all goods and services produced for the period, rose at a 1.1% annualized pace in the first quarter, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had been expecting growth of 2%.

The growth rate followed a fourth quarter in which GDP climbed 2.6%, part of a year that saw a 2.1% increase.



The report also showed that the personal consumption expenditures price index, an inflation measure that the Federal Reserve follows closely, increased 4.2%, ahead of the 3.7% estimate. Stripping out food and energy, core PCE rose 4.9%, compared to the previous increase of 4.4%.
Read more: https://www.cnbc.com/2023/04/27/gdp-q1-2023-.html
weatheriscool
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weatheriscool
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caltrek
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Good Corporate Earnings Help Smooth Path Over Poor GDP & Inflationary Data
by Nick Rummell
April 28, 2023

Introduction:
MANHATTAN (Courthouse News) — Showing the best monthly gain since the beginning of the year, Wall Street polished off April in the black despite muddled corporate earnings and mixed inflationary data.

The Dow Jones Industrial closed out the week up 290 points since last Friday’s closing bell, while the Nasdaq gained 154 points and the S&P 500 increased by 36 points.

On Friday, the latest inflation data from the Bureau of Economic Analysis showed that personal consumption expenditures rose by less than 0.1% last month, a comforting sign. But another report issued on Friday by the U.S. Bureau of Labor Statistics showed that wages and salaries increased 5.1% over the last year, hinting that the Federal Reserve’s efforts to combat price increases has not yet fully worked.

“While inflationary pressures continue to ease, the trajectory is still not moving quickly enough for the Federal Reserve to declare victory,” said Quincy Krosby, chief global strategist at LPL Financial. The Fed is scheduled to meet again next week, during which it likely will announce its final interest rate hike of the year at 0.25%.

Another factor that may affect the Fed’s approach is the lackluster gross domestic product growth, which came in at 1.1% annualized for the first quarter, less than the 2% many experts had forecast. Real GDP increases have shrunk for three straight quarters since the middle of 2022.

Read more here: https://www.courthousenews.com/good-co ... ary-data/

caltrek’s comment: Doesn’t sound much like a “declining rate of profit” to me.
Don't mourn, organize.

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weatheriscool
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Fed Set to Raise Interest Rates to 16-Year High and Debate a Pause
Officials could keep their options open in crafting signals around the endgame for increases

Federal Reserve officials are on track to increase interest rates again at their meeting this week while deliberating whether that will be enough to then pause the fastest rate-raising cycle in 40 years.

“We are much closer to the end of the tightening journey than the beginning,” Cleveland Fed President Loretta Mester said April 20.

Just how much closer the Fed is to that endgame will be a focus of internal debate because officials think their communications around future policy actions can be as significant as individual rate changes.

Officials are likely to keep their options open as they finesse carefully calibrated signals in their postmeeting statement and remarks by Fed Chair Jerome Powell at a news conference after the meeting ends Wednesday.
https://www.wsj.com/articles/fed-set-to ... _permalink
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