Economic and jobs news thread

weatheriscool
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US Jobless Claims Rise to Highest Since November in Holiday Week

ByMaria Paula Mijares Torres
July 14, 2022, 8:34 AM EDT * Updated on July 14, 2022, 8:57 AM EDT

-- Applications for unemployment led by a big jump in New York
-- Layoffs increasing from companies like Google, Microsoft

Applications for US state unemployment insurance rose to the highest level since November during the week that included the July 4th holiday, led by a big jump in New York.

Initial unemployment claims increased by 9,000 to 244,000 in the week ended July 9, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 235,000 applications.
{snip}

Read more: https://www.bloomberg.com/news/articles ... #xj4y7vzkg
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caltrek
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U.S. Venture Capitalists Have Never Had So Much Spare Cash
by Alex Wilhelm
July 14, 2022

Entire Article (for those who do not subscribe to Techcrunch+):
(Techcrunch) You might think given the chatter in the startup world that venture capitalists are short on funds — after all, we’re hearing about young tech companies finding themselves marooned between stages, hitting up investors with smaller capital pools than prior backers and turning to equity crowdfunding to keep their cash balances healthy.

And yet new data from PitchBook and the National Venture Capital Association indicate that while the pace of U.S. venture capital investment is slowing — more here on the global perspective — American venture capitalists are sitting atop more investable capital (dry powder) than ever before.

Even more, the pace at which venture investors are accreting funds is elevated compared to historical norms, meaning that private-market investors are in aggregate not struggling to raise, even if their portfolio companies may find themselves in a very different situation.

The question bouncing around our minds this morning is why — why are venture investments slowing when so much capital has been raised by VCs to invest?
Read more here: https://techcrunch.com/2022/07/14/us-v ... e-cash/

caltrek’s comment: My first thought is insufficient product demand. Why invest in a company that produces products and services that nobody is going to buy because they cannot afford said products and services?
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caltrek
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A Recession Would be Worse Than This
by Emily Peck
July 18, 2022

Introduction:
(Axios) A recession would be worse than the inflation the U.S. is seeing now, which is actually showing signs of easing up, some progressive economists are now arguing.

Why it matters: The Federal Reserve has been hiking interest rates to tamp down inflation, and is expected to continue — but this runs the risk of triggering a downturn. And at this point, that "cure" might be worse than the illness Dr. Powell is treating.

• "The data is saying we have time to be flexible," says Josh Bivens, who makes this point in a new column from the Economic Policy Institute.
Details: The high rate of inflation the government reported for June freaked a lot of people out, but energy prices mostly drove the surge. This month, gas prices have fallen at their fastest rate since the pandemic.

• Other commodity prices are down, too. Lumber, a leading indicator of the pandemic inflation, is well off its recent highs.

• Meanwhile, inflation expectations are receding, as Axios Macro reported last week.
Read more here: https://www.axios.com/2022/07/18/rece ... ts-argue
Don't mourn, organize.

-Joe Hill
weatheriscool
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The job market is beginning to show cracks

Job growth is slowing, vacancies are down and unemployment claims are ticking up

By Abha Bhattarai and Lauren Kaori Gurley
July 22, 2022 at 6:00 a.m. EDT
Matt Miller thought he was getting a promotion when he met with his boss on Tuesday. Instead, he got laid off. ... Business at the Pennsylvania art industry firm where he worked had been brisk until a few months ago. But lately, jitters about the crashing stock market and a possible recession had many regulars tapping the brakes on new purchases.

“Over the last three months, sales dropped 50 percent, then 50 percent again, until they were basically at zero,” said Miller, 32, who is worried about future job prospects. “Most of our clients were in real estate or tech, and they’ve just disappeared. They don’t want to spend $10,000 on a painting if they’re worried things are going to crash in a few months.”

The labor market, until now a pillar of economic resilience, is showing cracks. ... Job growth is slowing, unemployment claims are ticking up and several big companies, including Apple and Meta, are putting hiring plans on hold. There are signs that more firms are slashing jobs in industries as varied as tech, advertising, health care, finance and law.
https://www.washingtonpost.com/business ... xtra-jobs/
weatheriscool
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U.S. consumer confidence slips further in July
Reuters

WASHINGTON, July 26 (Reuters) - U.S. consumer confidence fell for a third straight month in July amid persistent worries about higher inflation and rising interest rates, pointing to slower economic growth at the start of the third quarter.

The Conference Board said on Tuesday its consumer confidence index dropped 2.7 points to a reading of 95.7 this month.

The survey's present situation index, based on consumers' assessment of current business and labor market conditions, fell to 141.3 from 147.2 in June. Its expectations index, based on consumers' short-term outlook for income, business and labor market conditions, ticked down to 65.3 from 65.8 last month.

"Concerns about inflation, rising gas and food prices, in particular, continued to weigh on consumers," said Lynn Franco, senior director of economic indicators at the Conference Board in Washington. "Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months."
https://www.thomsonreuters.com/en/about ... iples.html

Read more: https://www.reuters.com/markets/us/us-c ... 022-07-26/
weatheriscool
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US economy shrinks for a 2nd quarter, raising recession fear
Source: AP
WASHINGTON (AP) — The U.S. economy shrank from April through June for a second straight quarter, contracting at a 0.9% annual pace and raising fears that the nation may be approaching a recession.

The decline that the Commerce Department reported Thursday in the gross domestic product — the broadest gauge of the economy — followed a 1.6% annual drop from January through March. Consecutive quarters of falling GDP constitute one informal, though not definitive, indicator of a recession.

The GDP report for last quarter pointed to weakness across the economy. Consumer spending slowed as Americans bought fewer goods. Business investment fell. Inventories tumbled as businesses slowed their restocking of shelves, shaving 2 percentage points from GDP.

Higher borrowing rates, a consequence of the Federal Reserve’s series of rate hikes, clobbered home construction, which shrank at a 14% annual rate. Government spending dropped, too.

Read more: https://apnews.com/article/us-economy-s ... 23dad5825f
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Ken_J
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why are they playing games with calling a recession a recession. it's a stupid game that will quickly make it so that people won't trust anything they say afterward.
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caltrek
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Fed Raises Rates Another 0.75 Point, Sees Economy Softening
by Neil Irwin
July 27, 2022

Introduction:
(Axios) The Federal Reserve continued its campaign of aggressive interest rate increases Wednesday, hiking its rate target another 0.75 percentage point, while acknowledging for the first time that "recent indicators of spending and production have softened."

Why it matters: The Fed's tightening of monetary policy, the most rapid in decades, is intended to bring down inflation. It has also sent financial markets reeling and increased the risk the United States will fall into a recession.

Driving the news: At the end of a two-day policy meeting, the Federal Open Market Committee raised its target for short-term interest interest rates to 2.25% to 2.5% range, the highest since 2019. It is the fourth rate hike this year.

• Fed officials have signaled more rate increases are on the way, with the policy committee stating again that it "anticipates that ongoing increases in the target range will be appropriate."
• But they elected not to raise rates by a full percentage point at this meeting, as some analysts thought they might in the aftermath of a very high reading on the June inflation two weeks ago.
Read more here: https://www.axios.com/2022/07/27/fed-r ... est-rates
Don't mourn, organize.

-Joe Hill
weatheriscool
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U.S. inflation surges again and stays near 40-year high, key price gauge shows

Last Updated: July 29, 2022 at 8:35 a.m. ET
First Published: July 29, 2022 at 8:13 a.m. ET
By Jeffry Bartash

PCE inflation index rises 1% in June, core up 0.6%

{snip}

Read more: https://www.marketwatch.com/story/comin ... 1659096833


Ahead of the release:

https://www.marketwatch.com/story/comin ... 1659096833

Economic Report

Coming up: PCE inflation and consumer spending

Published: July 29, 2022 at 8:13 a.m. ET
By Jeffry Bartash

A key measure of U.S. inflation known as the PCE index is forecast to rise a sharp 0.9% in June. The core PCE, which excludes food and energy, is seen advancing 0.5%. The yearly increase in the PCE is expected to move up to a nearly 41-year high of 6.9% and the core rate is expected to stay flat at 4.7%.Consumer spending is forecast to climb 0.9% in June. The report on consumer spending and inflation will be released at 8:30 a.m. Eastern by the Bureau of Economic Analysis.

-- -- -- -- -- --

From the source:

https://www.bea.gov/news/2022/personal- ... -june-2022
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caltrek
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One Percent Swing report for August 3, 2022


Introduction:
(Morgan Stanley) What Happened in the Markets?

• US equity markets closed Wednesday higher: the S&P 500 Index rose 1.6%, while the Nasdaq 100 gained 2.7% and the Russell 2000 improved 1.4%. Meanwhile, 10-year yields remained below 2-year yields, and commodity prices moved lower.

• Equity markets seemed to make a sigh of relief as earnings season is more than 71% complete without much evidence of greater than anticipated margin pressures or changes to earnings forecasts for future quarters. Additionally, today's ISM services PMI report came in better than expected.
Investors continue to look for evidence that inflation is easing for guidance on the pace of future rate increases. CPI will be reported next week.

• Ten of the 11 S&P 500 sectors ended the day higher. IT (+2.7%) and Consumer Discretionary (+2.5%) and were the largest relative outperformers while Materials (+0.1%) and Energy (-3.0%) lagged.

• As of the 4pm equity market close, the 10-year Treasury yield decreased to 2.71% and 2-year yields improved to 3.08%. WTI oil moved lower to just above $91 per barrel, while gold rose to $1,766 per ounce. The US Dollar Index increased modestly.
Read more here: https://www.morganstanley.com/content/ ... e-20220803
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-Joe Hill
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