Economic and jobs news thread

weatheriscool
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Senate confirms Jerome Powell to second term as Federal Reserve chair
Source: Washington Post
The Senate confirmed Federal Reserve Chair Jerome H. Powell to a second term leading the central bank on Thursday, as he faces the enormous task of slashing the highest inflation in 40 years without sending the country into a recession. The Senate supported Powell to another four year term by a vote of 80-19.

Powell, 69, first became Fed chair in 2018 after being tapped for the position by former president Donald Trump. He was reappointed by President Biden and has broad support among Republicans and Democrats, who have praised his leadership since the pandemic seized the economy in spring 2020. “Few institutions are more important to help steer our economy in the right direction — and to fight inflation — than the Fed,” Senate Majority Leader Charles E. Schumer (D-N.Y.) said Thursday on the Senate floor. “Chairman Powell presided as Fed chair during some of the most challenging moments in modern American history.”

The challenge of getting the economy on more sustainable footing is a daunting one. The main tool for the Fed to slow down the economy is through interest rates, which work with blunt force. Higher rates make an array of loans costlier for households and businesses, and they can eventually slow consumer spending and business investment. The Fed bets that seven rate hikes this year will rein in inflation while recalibrating the job market so there is less demand for workers.

“The economy is strong, and is well positioned to handle tighter monetary policy,” Powell said at a news conference last week. “So, but I’ll say I do expect that this will be very challenging, it’s not going to be easy. And it may well depend, of course on events that are not in our under our control. But our job is to use our tools to try to achieve that outcome. And that’s what we’re going to do.”
Read more: https://www.washingtonpost.com/us-polic ... fed-chair/
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Yuli Ban
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And remember my friend, future events such as these will affect you in the future
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raklian
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To know is essentially the same as not knowing. The only thing that occurs is the rearrangement of atoms in your brain.
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caltrek
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Barely Recovering After Wednesday’s Rout, Markets Suffer Eighth Losing Week
by Nick Rummel
May 20, 2022

Introduction:
MANHATTAN (Courthouse News) — It has been eight weeks since the last winning week on Wall Street, with investors this time hammered by horrible earnings reports from leading retailers.

Markets mostly treaded water earlier in the week, but a huge decline on Wednesday sent investors into panic mode as the Dow Jones Industrial Average plunged a headline-making 1,164, its biggest loss since 2020. The Nasdaq and S&P 500 fared just as poorly, with the former dropping 566 points and the latter seeing a 165-point decline.

The losses continued early Friday, though markets recovered by the closing bell, with the Dow gaining 7 points and the S&P increasing 1 point. The Nasdaq lost 33 points for the day. With the losses, this marks the eighth week in a row that the U.S. indices have fallen, and the S&P is now teetering around 20% lower than at the beginning of the year.

Investors were largely spooked by poor earnings from a couple of leading retailers. In its quarterly report, Target posted a stunning 52% drop in its pre-tax earnings during the first quarter of 2022 and a 43% decline in operating income. That resulted in shareholders bolting on the company, and, by the open of markets on Wednesday, Target suffered its worst sell-off since 1987, losing about $50 per share.

Fellow big-box store Walmart on Wednesday also had its worst outing since 1987 after it noted a 25% drop in profit. “Bottom-line results were unexpected and reflect the unusual environment,” Walmart CEO Doug McMillon said in a statement. “U.S. inflation levels, particularly in food and fuel, created more pressure.”
Read more here: https://www.courthousenews.com/barely-r ... sing-week/ including
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caltrek
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One Percent Swing Report for May 23, 2022


Introduction:
(Morgan Stanley)
  • The S&P 500 rallied 1.9% on Monday to close at 3,974. With the gains, the index is now down 16.6% year to date.
  • Stocks rebounded Monday after recording a seventh consecutive week of declines Friday. The White House administration noted that tariffs imposed on China by the prior administration could be reconsidered, which appeared to help fuel risk-on sentiment today. Cyclical stocks outperformed with Financials and Energy the strongest sectors on the day, and interest rates rose across the curve. With volatility continuing in recent weeks and Q1 earnings season at its tail-end, markets will focus on economic updates this week as well as Wednesday's FOMC minutes, which could provide a glimpse of how policymakers are thinking about the future path for monetary policy.
  • All 11 S&P 500 sectors were higher in the session, with Financials (+3.2%) and Energy (+2.7%) outperforming the broad market while Health Care (+0.8%) and Consumer Discretionary (+0.6%) lagged.
  • As of the 4pm equity market close, the 10-year Treasury yield rose to 2.86%. WTI oil prices were flat at $110 per barrel, while the US Dollar Index declined.

What to Watch Going Forward
  • Monetary Policy: The FOMC sees a path to a "softish landing" as the labor market and the financial conditions of households and businesses are strong enough to provide "a good chance to restore the economy without a recession." This path includes an expeditious move in policy rates. During the May meeting, the FOMC unanimously voted to hike rates 50 basis points and guided to "ongoing 50-basis-point increases in the target rate at the next couple of meetings." Additionally, Fed Chair Powell said that a hike of "75 basis-points is not something the committee is actively considering." Quantitative Tightening ("QT") is set to begin June 1. The reductions to the $9 trillion Federal Reserve balance sheet will occur within cap limits as $47.5 billion of securities will be removed each month for the next three months ($30 billion from Treasury securities and $17.5 billion from mortgage-backed securities). In September, the reductions will ramp to a maximum of $95 billion per month ($60 billion from Treasury securities and $35 billion from mortgage-backed securities). Currently, futures markets are pricing in 7.8, 25-basis-point hikes in the forward curve for the U.S., down from 10.2 hikes on May 3.
Read more here: https://www.morganstanley.com/content/m ... e-20220523
Don't mourn, organize.

-Joe Hill
weatheriscool
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U.S. business activity slows in May, survey shows
Tue, May 24, 2022, 9:50 AM · 2 min read
WASHINGTON (Reuters) - U.S. business activity slowed moderately in May as higher prices cooled demand for services while renewed supply constraints because of COVID-19 lockdowns in China and the ongoing conflict in Ukraine hampered production at factories.

S&P Global said on Tuesday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a reading of 53.8 this month from 56.0 in April. That growth pace, which was the slowest in four months, was attributed to "elevated inflationary pressures, a further deterioration in supplier delivery times and weaker demand growth."

A reading above 50 indicates expansion in the private sector. The index remains consistent with strong economic growth halfway through the second quarter. The economy contracted in the first quarter under the weight of a record trade deficit, although domestic demand remained solid as households increased spending and businesses ramped up investment in equipment.

Annual consumer prices have increased at their fastest pace in 40 years, prompting the Federal Reserve to start raising interest rates in March and increasingly adopt an aggressive monetary policy posture. The rate hikes and tightening financial conditions have raised fears of a recession next year.
{snip}

Read more: https://finance.yahoo.com/news/u-busine ... 03644.html
weatheriscool
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Pending home sales slide for sixth straight month in April

Gabriella Cruz-Martinez · Personal finance writer
Thu, May 26, 2022, 11:49 AM
All signs point to a cooled off homebuying season before going into summer.

Pending home sales, a leading indicator of the health of the housing market, declined for the sixth straight month in April. The number of homes under contract to be sold edged down 3.9% from March, according to the National Association of Realtors’ (NAR), a larger decline than the 1.5% drop expected in the consensus outlook from Econoday.

The news follows a drop in both new and existing home sales, which showed housing activity had slowed for the past months as rising borrowing rates price out would-be homebuyers

“Pending contracts are telling as they better reflect the timelier impact from higher mortgage rates than do closings,” said Lawrence Yun, NAR’s chief economist in a press statement. “The latest contract signings … are at the slowest pace in nearly a decade.
{snip}

Read more: https://finance.yahoo.com/news/pending- ... 21670.html
weatheriscool
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US Jobless Claims Fall More Than Forecast in Tight Labor Market
Source: Bloomberg

Markets
Economics

US Jobless Claims Fall More Than Forecast in Tight Labor Market
-- Applications for unemployment insurance drop to 210,000
-- Fed raising rates may slow hiring or lead to layoffs this year
By Olivia Rockeman
May 26, 2022, 8:32 AM EDT Updated on May 26, 2022, 8:38 AM EDT

@livrockeman
https://www.twitter.com/livrockeman[quote]

Applications for US unemployment insurance declined last week by more than forecast, underscoring a persistently tight labor market.

Initial unemployment claims decreased by 8,000 to 210,000 in the week ended May 21, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for a drop to 215,000.[/quote]

{paywall}

Read more: https://www.bloomberg.com/news/articles ... -last-week
weatheriscool
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U.S. first-quarter GDP contracted at slightly faster rate, revised data show

Published: May 26, 2022 at 8:45 a.m. ET

By Greg Robb
The U.S. economy contracted at a negative 1.5% annual rate in the first quarter instead of the initial estimate of negative 1.4%, revised government data released Thursday show. Forecasters surveyed by the Wall Street Journal had expected a slight upward revision to a negative 1.3% reading. Economists believe the contraction overstates the slowing economy. Most of the weakness stemmed from the record trade deficit as consumers opened their wallets and bought foreign goods. In fact, consumer spending was revised higher in the first quarter, to a 3.1% rate up from the prior estimate of a 2.7% increase. The downward revision to GDP was led by weaker inventory and household investment. Looking ahead, economists at IHS forecast the economy will grow at a 2% annual rate in the second quarter. In one piece of new data, corporate profits fell at a 2.3% rate in the first quarter after a 0.7% gain in the prior three months. This is the first decline in five quarters. On a year-on-year basis, corporate profits are up 12.5%.
{snip}


Read more: https://www.marketwatch.com/story/us-fi ... 2022-05-26
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caltrek
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Tech Layoffs Exceed 15,000 in Brutal May
by Natasha Mascarenhas and Amanda Silberling
May 27, 2022

https://techcrunch.com/2022/05/27/tech- ... rutal-may/

Introduction:
(TechCrunch) It’s been a rough month in the tech sector. We’ve rounded up week after week of layoffs, and according to aggregator layoffs.fyi, more than 15,000 tech workers (internationally) have lost their jobs this month. Hopefully the sun will come out in June.

A number of tech companies that enjoyed pandemic-related surges are facing a correction, due to a number of factors, from rising inflation, economic distress, war and shifting consumer taste buds. Companies including Meta and Twitter have publicly announced hiring freezes, while Snap confirmed this week that it is slowing hiring as it misses revenue targets.

It’s worth noting that a change in hiring cadence, along with the Great Resignation, could mean that headcount is net decreasing at the aforementioned companies, as people leave and companies are slow to refill those empty positions.
The article goes on to discuss the job situation at the Brazilian based Vtex, PayPal (based in San Jose, California), Getir (Turkey), Gorillas (based in Berlin, Germany), Latch (New York), Snap (based in Santa Monica, California), Klarna (Sweden), Bolt (San Francsico, California), and Instacart (headquartered in San Francisco, California).

Read more here: https://techcrunch.com/2022/05/27/tech- ... rutal-may/

For the layoffs.fyi list: https://layoffs.fyi/
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