Jobless claims: Another 248,000 Americans filed new claims last week
Source: Yahoo! Finance
Yahoo Finance
New weekly jobless claims unexpectedly rose last week, ending a three-week streak of improvements.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print compared to consensus estimates compiled by Bloomberg:
-- Initial jobless claims, week ended Feb. 12: 248,000 vs. 218,000 expected and a revised 225,000 during prior week
-- Continuing claims, week ended Feb. 5: 1.593 million vs. 1.605 million expected, and a revised 1.619 million during prior week
Jobless claims have hovered around pre-pandemic levels for months now, holding near 2019's weekly average of approximately 220,000 new claims. In February last year, jobless claims were still coming in at a weekly rate of about 800,000 as virus-related pressures weighed on the labor market.
Initial jobless claims edged higher in January around the time that Omicron cases surged to a record level in the U.S. but have started to come down since then, albeit with some choppiness. Though the virus-induced impact appeared as a brief bump higher in the weekly jobless claims data, the latest monthly jobs report showed surprising resilience. Non-farm payrolls soaring by a much greater-than-expected 467,000 in January while the labor force participation rate rose more than expected.
Not news as this happened last year, but I've decided to share with you guys: a big corporation purchased the startup I was working on, most probably just for the existing customer-base to later discard half the products (this is still to be seen...). The corp is in a purchasing spree, it bough more than 5 companies in a row. The startup had a great environment at the time I've joined but since the purchase half the workers have left and the remaining are unsure as the corp has a history of outsourcing work to sweatshops, in a totally different perspective from the purchased company and the reason I've actually joined them in the first place. I am unsure about my future which makes me slightly anxious. Maybe covid/lockdown-related shit will finally splash on me soon. Damn, I really hate big corps.
U.S. economy takes a step back in January, leading indicators show
By Jeffry Bartash
U.S. leading economic index drops 0.3% in January
The numbers: The U.S. leading economic index fell 0.3% in January owing to a surge in omicron cases, high inflation and persistent supply-chain disruptions.
The decline in the index was the first since last spring. Wall Street had expected a small increase.
The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and valleys.
Key details: A measure of current economic conditions rose 0.2% in January, the Conference Board said Friday. (1) The privately run company is the publisher of the report.
The so-called lagging index — a look of sorts in the rearview mirror — also rose by 0.2%.
Key inflation gauge hit 6.1% in January, highest since 1982
CHRISTOPHER RUGABER
Fri, February 25, 2022, 8:39 AM
WASHINGTON (AP) -- An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1% in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia's invasion of Ukraine. ... The figure reported Friday by the Commerce Department was the largest year-over-year rise since 1982. Excluding volatile food and energy prices, core inflation increased 5.2% in January from a year earlier. ... Robust consumer spending has combined with widespread product and worker shortages to create the highest inflation in four decades -- a heavy burden for U.S. households, especially lower-income families faced with elevated costs for food, fuel and rent.
At the same time, consumers as a whole largely shrugged off the higher prices last month and boosted their spending 2.1% from December to January, Friday's report said, an encouraging sign for the economy and the job market. That was a sharp improvement from December, when spending fell. Americans across the income scale have been receiving pay raises and have amassed more savings than they had before the pandemic struck two years ago. That expanded pool of savings provides fuel for future spending.
Inflation, though, is expected to remain high and perhaps accelerate in the coming months, especially with Russia's invasion likely disrupting oil and gas exports. The costs of other commodities that are produced in Ukraine, such as wheat and aluminum, have also increased.
President Joe Biden said Thursday that he would do "everything I can" to keep gas prices in check. Biden did not spell out details, though he mentioned the possibility of releasing more oil from the nation's strategic reserves. He also warned that oil and gas companies "should not exploit this moment" by raising prices at the pump. ... A separate report Friday showed that orders for long-lasting factory goods rose sharply in January, led by a rise in demand for airplanes. The figures indicate that many companies are willing to invest more in industrial equipment and other goods, a sign of confidence in the economy. (1)
U.S. construction spending surges in January on homebuilding
Tue, March 1, 2022, 10:30 AM
WASHINGTON (Reuters) - U.S. construction spending surged in January, boosted by strong outlays on single-family homebuilding and private nonresidential structures. ... The Commerce Department said on Tuesday that construction spending increased 1.3%. Data for December was revised higher to show construction outlays rising 0.8% instead of 0.2% as previously reported. ... Economists polled by Reuters had forecast construction spending gaining 0.2%. Construction spending increased 8.2% on a year-on-year basis in January.
Spending on private construction projects shot up 1.5% in January. Outlays on residential construction increased 1.3%. ... Single-family homebuilding spending advanced 1.2%, while outlays on multi-family housing projects dipped 0.1%.
Despite January's jump, homebuilding remains constrained by higher prices for building materials, especially framing lumber. The United States last November nearly doubled the duties on imported Canadian softwood lumber after a review of its anti-dumping and countervailing duty orders. ... The National Association of Homebuilders said last month that building material production bottlenecks were raising construction costs and delaying projects.
Residential investment rebounded moderately in the fourth quarter after two straight quarterly declines. ... Investment in private non-residential structures like gas and oil well drilling accelerated 1.8% in January, suggesting a rebound in spending early in the first quarter. Spending on structures fell for a third straight quarter in the October-December period. ... Spending on public construction projects gained 0.6% in January. Outlays on state and local government construction projects fell 0.5%, while federal government spending soared 13.8%.
(Eurasia Review) After weeks of taunting, threatening, and trolling, Russian President Vladimir Putin gave the go-ahead to invade Ukraine, causing the global financial markets to drown in a sea of red ink – at least temporarily. The leading benchmark indexes sank, commodities soared, and currencies plummeted. But investors, from the institutions to the armchair traders, took advantage of the hemorrhaging and bought the dip in equities. Is this further proof that the market is irrational, or is this how the New York Stock Exchange generally functions?
Despite the crash at the Feb. 24 opening bell, stocks finished the session higher. They continued this momentum heading into the weekend, posting triple-digit gains and the best day of 2022. The Dow Jones Industrial Average soared about 800 points, the S&P 500 Index added 100 points, and the Nasdaq Composite Index surged nearly 200 points. Bonds climbed higher, with the benchmark ten-year Treasury yield up 0.028% to 2.00%. Investors were so confident, they dumped the U.S. dollar, gold, silver, and energy commodities. Even Russian stocks were up as the VanEck Russia ETF and the Direxion Daily Russia Bull 2X Shares soared 17% and 32%, respectively.
So, what happened? There are a couple of possible reasons to justify this head-spinning turnaround.
The first is that the final shoe dropped in the Ukraine-Russia saga when Moscow pulled the trigger on an invasion. The financial repercussions have been clearly outlined, and the worst is over. The war has now manufactured a calm ocean of certainty. Unless there is a nuclear conflict or the United States puts boots on the ground in Kyiv, investors’ worries have faded. Put simply, like the Mar. 23, 2020 bottom, markets are forward-looking.
The second is that participants in the equities arena are speculating that everything will be fine at home. President Joe Biden reiterated that Western sanctions are targeting the Russian economy. In other words, the Ukraine-Russia conflict will not dramatically impact the U.S. economy, except potentially on the energy front. Plus, the situation that could intensify inflation might give the Federal Reserve some pause to accelerate rate hikes, meaning the Eccles Building might move ahead with a 25-basis-point increase rather than a hefty 50-basis-point jump.
Private payrolls rose by 475,000 in February, topping expectations: ADP
Emily McCormick · Reporter
U.S. private-sector employers brought back more jobs than expected in February as virus-related disruptions receded following the Omicron variants spread.
Private payrolls rose by 475,000 in February compared to January, ADP said Wednesday. Economists were looking for payrolls to grow by 375,000, according to Bloomberg consensus data.
February's report also came alongside a sharp upward revision to January's payrolls. In January, private sector employment rose by 509,000, ADP said in its revised monthly print. Previously, ADP reported January payrolls fell by 301,000, which would have been the first drop since December 2020.
While February's labor market data will likely capture some residual impact from the record surge in Omicron variant cases in the U.S. in January, disruptions to the demand side of the labor market have started to attenuate as new cases have come down and consumers began going back out. However, employers remain in stiff competition for talent, with demand for workers elevated as the labor force participation rate holds below pre-pandemic levels.
(Investigate Midwest) Over the past 20 years, inflation on food prices has averaged about 2% per year. But, last year, inflation accelerated.
Between 2020 and 2021, inflation on food prices jumped 3.5% — an upswing of 75%, according to an analysis by the U.S. Department of Agriculture.
Meat and fish prices led the way: beef and veal rose 9.3%; pork, 8.6%; and fish and seafood, 5.4%. The new data reflects a trend of meat prices rising faster than prices for other kinds of food.
The USDA expects the high prices to continue in 2022. The inflation will likely be between 2% and 3%, the agency predicted.
The S&P 500 declined 3.0% Monday to close at 4,201. With today's sell off, the index is now down 11.9% year to date.
Stocks continued last week's weakness as the sell off deepened on Monday. Elevated geopolitical tensions have remained the main driver behind the downbeat sentiment of late, with most recent reports focused on the potential for the United States to ban Russian oil imports. While stocks declined on Monday, WTI oil prices reached as high as $130 this morning before closing at $120 per barrel, still rallying more than 3% on the day. Despite the large sell off in equities, interest rates were higher across the curve, with the yield curve flattening. Markets will focus on the February CPI report on Thursday, which will be the last inflation print ahead of next week's FOMC meeting.
Nine of the 11 S&P 500 sectors were lower, with Energy (+1.6%) and Utilities (+1.3%) outperforming, while Communication Services (-3.7%) and Consumer Discretionary (-4.8%) lagged.
Interest rates were higher across the curve, with 10-year Treasury yields closing at 1.78% as of the 4 p.m. equity market close. WTI oil closed up more than 3% to $120 per barrel, while gold nearly reached $2,000 per ounce for the first time since August 2020, up 1.4%. The U.S. dollar strengthened as measured by the US Dollar Index.
With Brent crude climbing steadily towards $130 per barrel, fears of an economic slowdown and even a slip into recession have reared their heads among traders, very likely reinforced by warnings of food supply troubles because of the war in Ukraine. It seems like everything is going wrong at the same time.
Oil prices soared as soon as Russia invaded Ukraine in what it euphemistically called a “special military operation” aimed at “demilitarizing” its eastern neighbor. As the conflict escalated and the West began implementing sanctions on Moscow, fears grew over potential action against Russia’s oil industry, which supplies around 7 percent of the world’s crude and is the biggest exporter of crude oil and oil products taken together.
Talks about oil sanctions marked the start of the week, and the market response was a sharper rise in oil prices. So far, nothing surprising. According to data about hedge fund buying activity in oil contracts, however, there are fears of a global economic slowdown, and while also unsurprising, this is most unwelcome.
In his weekly column on hedge funds and oil buying, Reuters’ John Kemp said the industry remained very bullish on oil, with the ratio to bearish positions at 7:1. This ratio signals that hedge funds are following recent geopolitical events in Europe closely, but they will be watching for demand destruction as oil prices remain elevated.
As oil prices rise, eventually, they tend to reach a certain point when demand destruction begins either through fuel conservation, as Reuters’ Kemp noted in his column, or simply because expensive fuels make everything else more expensive and discourage spending.
And remember my friend, future events such as these will affect you in the future
