Economic and jobs news thread

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caltrek
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Re: Economic and jobs news thread

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Life has been a bit of a distraction for me lately, so I missed posting some of these one percent move reports. So, the market has actually been a little bit more volatile lately than one might suppose from a strict reading of this thread. As indicated, over all there has been a 4.3% gain in the S&P since the beginning of the year. This could easily be wiped out by a couple of bad days in the market.

One Percent Move Report for March 21, 2023

Introduction:
(Morgan Stanley)

What Happened in the Markets?

• The S&P 500 Index rose 1.3% Tuesday to 4,003.16. With the gains, the index is now up 4.3% year to date.

• Eight of the 11 S&P 500 sectors rose on the day, as Energy (+3.4%) and Consumer Discretionary (+2.7%) outperformed while Real Estate (-0.6%) and Utilities lagged (-2.0%).

• Stocks bounced for the second straight day this week. The move higher comes after last week's volatility, where pressures mounted for some regional banks within the US banking system. However, remarks by the US Treasury Secretary Janet Yellen in addition to measures and protections put in place by the FDIC, the Federal Reserve, the Swiss central bank, and a consortium of large banks helped rebuild confidence in recent days.

• The uncertainty that still remains could potentially lead to more volatility in financial markets. In particular, tomorrow's FOMC meeting has investors debating whether the Fed will hike rates or choose to pause entirely. Currently, the odds of a 25 basis point (bp) rate hike are 80%, down from 100% on March 10th. MS & Co.'s US Economics team forecasts the Fed will deliver a 25bp rate hike at each of the March and May meetings, to a peak rate of 5.125%. The team then expects the Fed to pause until the Fed cuts rates 25bp in March 2024.

Read more here: https://www.morganstanley.com/content/ ... -20230321
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-Joe Hill
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caltrek
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Re: Economic and jobs news thread

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California Adds Jobs but Growth is Down From January
by Eric Burkett
March 24, 2023

Introduction:
SAN FRANCISCO (Courthouse News) — California, the world’s fourth largest economy, continues to add jobs although that growth has slowed since the last jobs report came out for January. February added 32,300 new non-agricultural jobs throughout the state across eight major industry sectors. Tech, however, continues to bleed jobs, laying off thousands.

The state has created jobs in 16 out of the last 17 months, according to Governor Gavin Newsom’s office, while unemployment inched up by a tenth of a percent to 4.3%. That’s still higher than the national rate which stands at 3.6%. California’s growth accounted for 10.4% of the nation’s overall non-farm job growth, compared with January’s dramatic 19%.

The latest report from the California Employment Development Department released Friday showed that eight of the 11 major industry sectors continued to show growth although, in several cases, it was very slow. Construction showed the most dramatic growth over the past month, shooting up from a loss of 7,300 jobs in January to a gain of more than 7,600 last month. That’s nearly 15,000 jobs.

Education and health services — the fast growing sector — grew over January, which saw an increase of 11,000 jobs, while February moved upward to 11,300. Leisure and hospitality’s growth slowed to a still respectable 11,200 new jobs compared to January’s figures, which stood at 20,800. Most notably, government positions dropped from January, when it was the fastest growing industry, reporting 46,000 new hires compared to February, which saw it drop to just 2,400.

“Overall, these numbers paint a very encouraging picture. Tourism and healthcare are major industries in San Francisco, and these strong increases in payroll show that the recent obituaries for San Francisco are premature,” said state Senator Scott Weiner, a Democrat from San Francisco.

Read more here: https://www.courthousenews.com/califor ... -january/

caltrek's comment: Reports of continued job growth alongside news of the Silicon Valley Bank (SVB) collapse seems paradoxical. In addition to the downturn in the tech sector noted in the article, there is another connection. That is that the Fed's raising of interest rates to curb inflation has been in part due to rapid overall job growth. It was that raising of interst rates which appear to be very much a root of the SVB collapse.
Don't mourn, organize.

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weatheriscool
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Re: Economic and jobs news thread

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Jobless claims edge up to 198,000, higher than expected
Source: CNBC
Initial filings for unemployment insurance ticked higher last week but remained generally low in a tight labor market. Jobless claims for the week ended March 25 totaled 198,000, up 7,000 from the previous period and a bit higher than the 195,000 estimate, the Labor Department reported Thursday.

Though the number was slightly higher than expectations, the total indicates that companies are slow to lay off workers despite expectations that the unemployment rate will rise through the year. Continuing claims, which run a week behind, edged up 4,000 to 1.689 million. That was below the FactSet estimate for 1.6935 million.

The four-week moving average of weekly claims, which smoothes volatility in the numbers, edged up to 198,250, but has been below 200,000 since mid-January. The relatively benign claims numbers come despite aggressive Federal Reserve efforts to slow down inflation. In large part, the central bank is targeting a labor market beset by a sharp supply-demand imbalance in which there are nearly two open jobs for every available worker.

According to estimates last week, central bankers expect the unemployment rate to rise to 4.5% this year, from its current 3.6% level. Doing so would require the loss of more than 540,000 jobs, according to an Atlanta Fed calculator.
Read more: https://www.cnbc.com/2023/03/30/jobless ... cted-.html
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Re: Economic and jobs news thread

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Key Fed inflation gauge rose 0.3% in February, less than expected
Source: CNBC

An inflation gauge the Federal Reserve follows closely rose slightly less than anticipated in February, providing some hope that interest rate hikes are helping ease price increases.

The personal consumption expenditures price index excluding food and energy increased 0.3% for the month, the Commerce Department reported Friday. That was below the 0.4% Dow Jones estimate and lower than the 0.5% January increase.

On a 12-month basis, core PCE increased 4.6%, a slight deceleration from the level in January. Including food and energy, headline PCE increased 0.3% monthly and 5% annually, compared to 0.6% and 5.3% in January.

The softer than expected data came with monthly energy prices decreasing 0.4% while food prices rose 0.2%. Goods prices rose 0.2% while services increased 0.3%. In other data from the report, personal income increased 0.3%, slightly above the 0.2% estimate. Consumer spending increased 0.2%, compared to the 0.3% estimate.
Read more: https://www.cnbc.com/2023/03/31/fed-inf ... 2023-.html
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caltrek
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Re: Economic and jobs news thread

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caltrek’s comment: High rates of return are supposed to be justified by high risk. If the government acts to mitigate that risk, then we see yet another mechanism by which the rich get richer, and inequality of income and wealth grows.
Here is an article more or less centered on that same basic theme:

Making The Rich Richer: The Silicon Valley Bank Bailout
by Dean Baker
April 1, 2023
(Eurasia Review) There is a standard tale of politics where conservatives want to leave things to the market, whereas the left want a big role for government. The right likes to tell this story because it advantages them politically, since most people tend to have a positive view of the market. The left likes to tell it because they are not very good at politics and have an aversion to serious thinking.

The Silicon Valley Bank (SVB) bailout is yet another great example of how the right is just fine with government intervention, as long as the purpose is making the rich richer. Left to the market, the outcome in this case was clear. The FDIC guaranteed accounts up to $250k. This meant that the government’s insurance program would ensure that everyone got the first $250,000 in their account returned in full.

The amounts above $250,000 were not insured. This is both a matter of law and a matter of paying for what you get. The FDIC charges a fee on the first $250,000 in an account based on the size and strength of the bank. This fee ranges from 0.015 percent to 0.40 percent annually, depending on the size and riskiness of the bank. Most people would not see the insurance fee directly, because it is charged to bank, but we can be sure that the bank passes this cost on to its depositors.

However, these fees only apply to the first $250,000 in an account. This means that people who had more than $250,000 in an account were not paying for insurance. Nonetheless, when they needed insurance from the government, they got it, even though they didn’t pay for it.

As we are now hearing, in many cases this handout ran into the tens of millions, or even billions, of dollars, almost all of it going to the very richest people in the country. Compare these depositors’ sense of entitlement to a government handout, to the outrage over President Biden’s proposal to forgive $10,000 of student loan debt. (To be clear, depositors likely would have gotten 80 to 90 percent of their money back in any case.)
Read more here: https://www.eurasiareview.com/01042023- ... -analysis/
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caltrek
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Re: Economic and jobs news thread

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Markets End March on a High After Tempestuous Start
by Nick Rummell
March 31, 2023

Introduction:
MANHATTAN (Courthouse News) — Wall Street was able to overcome a rocky beginning to finish March on the positive side of the ledger, though consumer confidence hints at problems to come.

For the week, the Dow Jones Industrial Average gained 1,036 points, while the S&P 500 increased 138 points and the Nasdaq netted 398 points. All three indices ended the month up, despite massive losses a couple weeks ago. The Dow began the month trading at 32,656 points; it ended the month at 33,273 points. Similar gains were seen in the S&P and Nasdaq.

On Friday, much-awaited inflation data from the U.S. Bureau of Economic Analysis showed that the personal consumption expenditures index rose by just 0.3%, less than what experts had predicted. The report also noted that real spending fell by 0.1% as the economy continues to slow down after a 1.5% surge in spending in January.

In particular, food price increases have dropped for seven consecutive months, gaining just 0.2% last month compared with 0.4% in January. Prices for energy goods and services, which have see-sawed up and down the last few months, fell by 0.4% in February.

Experts are encouraged by the report but believe the central bank likely still has one more interest rate hike in the works, noting that annual and three-month-annualized interest inflation both remain above 4.5%.

Read more here: https://www.courthousenews.com/markets ... us-start/
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weatheriscool
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Re: Economic and jobs news thread

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Private payrolls rose by 145,000 in March, well below expectations, ADP says
Source: CNBC
Private sector hiring decelerated in March, flashing another potential sign that U.S. economic growth is heading for a sharp slowdown or recession, payroll processing firm ADP reported Wednesday. Company payrolls rose by just 145,000 for the month, down from an upwardly revised 261,000 in February and below the Dow Jones estimate for 210,000.

That took first-quarter hiring to an average of just 175,000 jobs a month, down from 216,000 in the fourth quarter and a sharp reduction from the average of 397,000 in the first quarter of 2022. “Our March payroll data is one of several signals that the economy is slowing,” said ADP chief economist Nela Richardson. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.”

Annual pay rose at a 6.9% rate in March, down from 7.2% in February, according to the firm’s calculations. Job growth was almost evenly split between services and goods-producing firms, an unusual occurrence. The U.S. economy is heavily services-oriented, so that sector generally produces much stronger hiring gains. The data released Wednesday showed a gain of 75,000 in services and 70,000 in goods producers.

Last month, though, financial activities lost 51,000 jobs and professional and business services fell by 46,000. Manufacturing also saw a decline of 30,000. On the plus side, leisure and hospitality added another 98,000 workers, trade transportation and utilities grew by 56,000 and construction rose by 53,000. Natural resources and mining also showed a gain, up 47,000, while education and education and health services added 17,000.
Read more: https://www.cnbc.com/2023/04/05/adp-march-2023.html
weatheriscool
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Re: Economic and jobs news thread

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US Jobless Claims Show Emerging Cracks in a Strong Labor Market

Source: Bloomberg
Applications for US unemployment benefits last week signaled that the labor market still remains relatively strong, even though data revisions indicate some emerging signs of softening. Initial unemployment claims were 228,000 in the week ended April 1, Labor Department data showed Thursday.

For the week before that, the government revised the numbers up by 48,000 to 246,000, likely explaining why the latest reading exceeded almost all economists’ estimates. This report included updated seasonal factors going back to 2018. “These changes should provide a more accurate picture of claims levels and patterns for both initial and continued claims,” the report said.

The Labor Department had to change the way it adjusts for seasonal factors during the pandemic to limit distortions. Thursday’s data maintain that method for the first year of the pandemic but use the traditional way when looking at figures before March 2020 and after June 2021. Continuing claims, which include people who have received unemployment benefits for a week or more and are a good indicator of how hard it is for people to find work after losing their job, was little changed at 1.82 million in the week ended March 25. The previous week was revised up.

Economists have been puzzled as to why claims were so low, especially given large waves of layoffs and other signs of softening in the labor market. Even with the adjustments, applications are still relatively low and indicative of strong demand for workers. A separate report Thursday showed job-cut announcements from US-based employers rose 15% in March from the prior month, marking the highest first-quarter total since 2020, according to Challenger, Gray & Christmas, Inc.
Read more: https://www.bloomberg.com/news/articles ... al-factors
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caltrek
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Re: Economic and jobs news thread

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weatheriscool wrote: Thu Apr 06, 2023 3:41 pm US Jobless Claims Show Emerging Cracks in a Strong Labor Market

Source: Bloomberg
Applications for US unemployment benefits last week signaled that the labor market still remains relatively strong, even though data revisions indicate some emerging signs of softening. Initial unemployment claims were 228,000 in the week ended April 1, Labor Department data showed Thursday.

For the week before that, the government revised the numbers up by 48,000 to 246,000, likely explaining why the latest reading exceeded almost all economists’ estimates. This report included updated seasonal factors going back to 2018. “These changes should provide a more accurate picture of claims levels and patterns for both initial and continued claims,” the report said.

...
Read more: https://www.bloomberg.com/news/articles ... al-factors
More on that:

Job Market Shows Signs of Cooling as Payrolls Rise by 236,000

by Kevin Lessmiller
April 7 , 2023

Extract::
(Courthouse News) Nick Bunker, economic research director for North America at career site Indeed, said Friday’s report shows a still-strong labor market with historically low unemployment.

“The U.S. labor market has lost some speed, but all indications are that it’s slowing down not stalling,” he wrote. “And even if employment isn’t growing at the pace we saw last year, its speed is still rapid.”

The report comes two weeks after the Fed delivered its ninth straight rate hike in an attempt to cool down the economy in the face of surging inflation, which hit a four-decade high last year.

Andrew Hunter, deputy chief U.S. economist at Capital Economics, said the slower payroll growth combined with a drop in job openings, higher weekly unemployment claims and the fallout from banking instability all point to job gains slowing sharply soon.

Bunker said the robust hiring pace of 2022 is over, but he noted the average of 345,000 new jobs a month so far this year is more than enough to keep up with population growth.

Read more here: https://www.courthousenews.com/job-mar ... y-236000/
Don't mourn, organize.

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weatheriscool
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Re: Economic and jobs news thread

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IMF cuts GDP forecasts, says global economy heading for weakest growth since 1990
Source: CNBC
The International Monetary Fund on Tuesday released its weakest global growth expectations for the medium term in more than 30 years.

The D.C.-based institution said that five years from now, global growth is expected to be around 3% — the lowest medium-term forecast in an IMF World Economic Outlook since 1990.

“The world economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic,” the Fund said in its latest World Economic Outlook.

The weaker growth prospects stem from the progress economies like China and South Korea have made in increasing their living standards, the IMF said, as well as slower global labor force growth and geopolitical fragmentation, such as Brexit and Russia’s invasion of Ukraine.
Read more: https://www.cnbc.com/2023/04/11/imf-wor ... -2025.html
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