Economic and jobs news thread

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caltrek
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The One Percent Swing Report for May 27, 2022

Introduction:
(Morgan Stanley)
  • The S&P 500 rallied 2.5% Friday to close at 4,158. With the recent gains, the index is now down 12.8% year to date.
  • The index recuperated all of the month-to-date losses after recording the best week since November 2020 with Consumer Discretionary, Energy, Information Technology, and Financials leading the rebound.
  • For the first time in seven weeks, US equities closed the week higher: the S&P 500 gained 6.6%, the Nasdaq 100 increased 7.1%, and the Russell 2000 improved 6.5% since last Friday's 4pm close. Markets may be experiencing a bit of a relief rally coming off of short-term oversold conditions and following first quarter earnings releases. Additionally, today's headline PCE inflation data release of 6.3% year over year inflation came in-line with expectations but remains well ahead of the Federal Open Market Committee (FOMC)'s target.
  • Each of the 11 S&P 500 sectors was higher in the session, with Consumer Discretionary (+3.5%), Information Technology (+3.4%), and Real Estate (+2.8%) outperforming the broad market while Utilities (+1.5%) and Consumer Staples (+1.1%) lagged.
  • As of the 4pm equity market close, the 10-year Treasury yield was flat at 2.74% and WTI oil prices rose to $115 per barrel.
Read more here: https://www.morganstanley.com/content/m ... e-20220527
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wjfox
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California surplus expected to hit unprecedented $97 billion under Newsom’s budget plan

BY JOHN MYERS
MAY 13, 2022 UPDATED 3:05 PM PT

California’s government surplus is expected to balloon to $97.5-billion by next summer under the budget plan unveiled Friday by Gov. Gavin Newsom, an estimate that vastly exceeds previous projections and comes amid concerns that rising inflation and arcane spending rules could throw the state’s finances into disarray in the near future.

Many of the governor’s ideas on how to use the extra cash — including rebates, new debt repayments and additional funding for public schools — are contained in a $300.6-billion budget blueprint for the fiscal year that begins in July. Other portions of the surplus would be set aside in the state’s cash reserves.

“No other state in American history has ever experienced a surplus as large as this,” Newsom said at a news conference in Sacramento.

The revised budget Newsom will send to the Legislature reflects $14 billion in additional spending for the fiscal year that begins in July, most of it for K-12 education. It also ratchets up total spending for the current fiscal year, as the surplus is spread across both time frames. While other estimates have been floated in recent weeks, Friday’s proposal reflects the first full accounting of tax receipts collected in April.

The governor’s budget asks lawmakers to devote billions of dollars to a raft of new items: an inflation relief package for Californians, more money to address dangerous drought and wildfire conditions, subsidies for low- and middle-income healthcare plans and the highest per-pupil school funding levels in the state’s history.

https://www.latimes.com/california/stor ... m-new-plan
weatheriscool
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Consumer confidence dips on worries over inflation and slowing U.S. economy

Last Updated: May 31, 2022 at 11:08 a.m. ET
First Published: May 31, 2022 at 10:14 a.m. ET
By Jeffry Bartash

Consumer confidence index drops to 106.4 in May from 108.6

The numbers: A survey of U.S. consumer confidence fell slightly in May to a three-month low of 106.4, reflecting worries about high inflation and a slowdown in the economy.

Economists polled by The Wall Street Journal had forecast the index to total 103.9.

The index was revised up to 108.6 in April.

Big picture: The U.S. economy is still growing, but government spending has tapered off and high inflation is forcing the Federal Reserve to jack up interest rates. Higher rates could eventually slow the economy.

On the flip side, the strongest labor market in decades and rising wages have offset some of the damage from high inflation and allowed consumers to keep spending. Consumer spending is the main driver of the U.S. economy.
{snip}

Read more: https://www.marketwatch.com/story/consu ... 1654006453
weatheriscool
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Home prices surged at record pace in March despite higher mortgage rates

Ronda Lee
Tue, May 31, 2022, 11:22 AM · 3 min read

Higher mortgage rates did nothing to stop home price momentum in March.

U.S. home values jumped 20.6% in March from the year before, according to the S&P CoreLogic Case-Shiller national home price index, up from a 20% increase in February and marking the largest year-over-gain in the index’s 35-year history.

The acceleration occurred even as mortgage rates jumped nearly a full percentage point during the month.

“Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer,” Craig Lazzara, managing director at S&P DJI, said in a statement. “The strength of the composite indices suggests very broad strength in the housing market, which we continue to observe.”
{snip}

Read more: https://finance.yahoo.com/news/home-pri ... 45872.html
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weatheriscool
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U.S. jobless claims drop; layoffs fall in May
Reuters

WASHINGTON, June 2 (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week as demand for labor remained strong, helping to underpin the economy amid rising interest rates and tightening financial conditions.

Initial claims for state unemployment benefits fell 11,000 to a seasonally adjusted 200,000 for the week ended May 28, the Labor Department said on Thursday. Economists polled by Reuters had forecast 210,000 applications for the latest week.

Claims have been largely treading water since hitting more than a 53-year low of 166,000 in March. Demand for labor remains strong, though some signs of cooling are emerging.

The Federal Reserve's Beige Book on Wednesday showed "one district explicitly reported that the pace of job growth had slowed," and that "some firms in most of the coastal districts noted hiring freezes or other signs that market tightness had begun to ease."
{snip}

Read more: https://www.reuters.com/markets/us/us-j ... 022-06-02/
weatheriscool
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More Than a Third of 250k Earners Live Paycheck-to-Paycheck
Motley Fool

Those who make $250,000 or more make up just 5% of Americans, according to the Census Bureau.

But, according to a new survey by Pymnts.com and LendingClub, 36% of them -- while earning four times the median US salary -- are living paycheck-to-paycheck. Someone should tell them there's nothing wrong with having a Dollar Tree vase in a $1.7 million home.

Living paycheck-to-paycheck, of course, doesn't necessarily mean wealthy earners are struggling or deserve a pity party. Only one in ten said they struggled to pay their household expenses in April, and of course there's always another fat paycheck on the way.

The surprising statistic may well be blamed on a disproportionate number of free-spenders in a generation often stereotyped for free-spending: Millennials. Turns out, even the highest-earning members of the age group struggle to stuff their savings accounts, with roughly 55% of millennials earning over $250,000 saying they have little money left at the end of the month. Unsurprisingly, for all generations, the biggest culprit of high spending is likely housing expenses, which often account for a bigger slice of wealthier budgets and exploded during the pandemic.
https://www.fool.com/investing/2022/06/ ... ycheck-to/
weatheriscool
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U.S. Treasury yields fall as data show slowest job growth in pandemic recovery

PUBLISHED THU, JUN 2 2022 3:29 AM EDT UPDATED AN HOUR AGO
Matt Clinch
@MATTCLINCH81
https://twitter.com/MATTCLINCH81

The U.S. 10-year Treasury yield dipped Thursday, as investors looked to employment data showing the slowest pace of job creation in the pandemic recovery so far.

The yield on the benchmark 10-year Treasury note lost 2.7 basis points to 2.904% as of 8:42 a.m. ET. The yield on the 30-year Treasury bond moved 1.7 basis points lower to 3.06%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Private sector employment rose by just 128,000 in May, payroll processing firm ADP reported Thursday. That fell well short of the 299,000 Dow Jones estimate and marked a decline from the downwardly revised 202,000 in April, initially reported as a gain of 247,000.

Rates fell as traders took the ADP report to mean the economy is already slowing, suggesting the Federal Reserve could be less aggressive in tightening monetary policy.

{snip}
—CNBC’s Tanaya Macheel and Vicky McKeever contributed to this article.

Read more: https://www.cnbc.com/2022/06/02/us-trea ... -data.html
weatheriscool
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Treasury secretary concedes she was wrong on 'path that inflation would take'
Source: CNN

Washington (CNN)US Treasury Secretary Janet Yellen admitted Tuesday that she had failed to anticipate how long high inflation would continue to plague American consumers as the Biden administration works to contain a mounting political liability.

"I think I was wrong then about the path that inflation would take," Yellen told CNN's Wolf Blitzer on "The Situation Room" when asked about her comments from 2021 that inflation posed only a "small risk."

The admission was the latest indication that the administration's expectations of a normalizing economy were thrown into disarray by the continuing pandemic and the war in Europe.

"As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn't -- at the time -- didn't fully understand, but we recognize that now," she said.
Read more: https://www.cnn.com/2022/05/31/politics ... index.html
weatheriscool
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U.S. tech sector sees highest job cuts in May since Dec. 2020 - report

Thu, June 2, 2022, 2:02 PM
(Reuters) - U.S. employers in the technology sector cut nearly nine times more jobs in May than in the first four months of the year as rising inflation and slowing demand force companies to cut corners.

Though overall layoffs in the country reported by global outplacement firm Challenger, Gray & Christmas on Thursday fell 14.7% in May from April, thanks to strong demand in the labor market, the technology sector cut 4,044 jobs, up from the 459 between January and April. ... It is the highest monthly total since December 2020 when tech companies cut as many as 5,253 jobs.

"Many technology startups that saw tremendous growth in 2020, particularly in the real estate, financial, and delivery sectors, are beginning to see a slowdown in users, and coupled with inflation and interest rate concerns, are restructuring their workforces to cut costs," said Andrew Challenger, senior vice president of challenger, Gray & Christmas.



The impact of the Ukraine crisis, a four-decade high inflation and rising interest rates has led to forecast cuts by companies such as Snap Inc and Microsoft, while others like Meta Platforms Inc have slowed hiring to rein in costs. ... Fintech companies also announced 268% more job cuts in May than in the first four months of 2022, the report from Challenger, Gray & Christmas said. ... However, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week. Initial claims for state unemployment benefits fell 11,000 to a seasonally adjusted 200,000 for the week ended May 28, the Labor Department said on Thursday.
(Reporting by Tiyashi Datta in Bengaluru; Editing by Shinjini Ganguli)

Read more: https://finance.yahoo.com/news/u-tech-s ... 58108.html
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