Economic and jobs news thread

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Ken_J
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Re: Economic and jobs news thread

Post by Ken_J »

it sounds like the supply chain issues, labor strikes and now energy crisis are getting tangled up into one hell of an gordian knot.

https://www.businessinsider.com/energy- ... eo-2021-10
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caltrek
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U.S. Inflation at its Highest in Thirty Years
by Erin Doherty
November 10, 2021

https://www.axios.com/consumer-price-in ... a47ba.html

Inroduction:
(Axios) The core Consumer Price Index (CPI), which measures the price of goods and services excluding food and energy, rose 0.6% in October, according to data out Wednesday.
  • The headline CPI, which includes all items, increased 0.9% in October, compared to economist expectations for a 0.5% uptick.
The big picture: The latest inflation reading shows that price gains are picking up steam.

What they're saying: "We expected inflation would get worse before it got better, but not this much worse. Particularly painful is the increase in food prices as we approach the holidays, and the rise in energy prices as we plan to travel more to family get-togethers,” Robert Frick, corporate economist with Navy Federal Credit Union, wrote in a research note.
  • “However, both those increases are likely to be temporary, and the forecasts that inflation overall will drop early-to-mid-next year still seems credible,” he added.
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caltrek
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Re: Economic and jobs news thread

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Putting Current Inflation in the Proper Perspective
by Dean Baker
November 11, 2021

https://www.commondreams.org/views/2021 ... erspective

Introduction:
(Common Dreams) The October Consumer Price Index data has gotten the inflation hawks into a frenzy. And, there is no doubt it is bad news. The overall index was up 0.9 percent in the month, while the core index, which excludes food and energy, rose by 0.6 percent. Over the last year, they are up 6.2 percent and 4.6 percent, respectively. This eats into purchasing power, leaving people able to buy less with their paychecks or Social Security benefits.

There is no argument about what the numbers show, but the key questions are what caused this rise in inflation and what can be done to bring it down.

There are four important points to recognize:

• Inflation has risen sharply in many wealthy countries, so this isn't something that can be laid entirely on the policies of the Trump and Biden administrations.
• There are good reasons for believing that many of the factors driving this inflation are temporary and will be reversed in the not too distant future.
• Conventional remedies for inflation, like raising interest rates to increase unemployment, and thereby putting downward pressure on wages, are likely to prove counterproductive; and
• Many people have seen increases in wages and benefits that far outweigh the impact of higher prices.
The article goes on to further discuss these points.
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caltrek
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Re: Economic and jobs news thread

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How Corporate Power is the Real Driving Force Behind Inflation
by Robert Reich
November 11, 2021

https://www.alternet.org/2021/11/corporate-inflation/

Introduction:
(Alternet) The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices.

If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv.

Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.
Conclusion:
This structural problem is amenable to only one thing: the aggressive use of antitrust law.
caltrek's comment: This is an important point to note. Many would use the problem of inflation as an argument for more conservative economic policies. Yet, those policies would more often benefit corporate power rather than hold it in check. Thus, actually adding to the problem of inflation.

It is also important in that it highlights another point of confusion perpetuated by others commenting in this forum. That is the notion that a declining rate of profit is somehow a big problem for corporate America. Put simply, the rising concentration of wealth and economic power can clearly offset such problems. Monopolistic corporations, as the article points out, are in a better position to set there own prices and therefore their margin of profit. Also, if my profit is 1% on ten billion dollars of assets, I am still clearly much better off than if my profit is 10% on one hundred million dollars of assets.

Moreover, modern economic relations with government can also offset problems of a tendency for the rate of profit to decline. This can and is done through tax policies in which powerful corporations are given tax breaks and tax related subsidies. There are also government contracts in which a margin of profit is guaranteed. The declining rate of profit as a potential source of crisis and collapse may have been a strong point to make about 19th century capitalists economies. It clearly leaves much to be desired in analyzing the present situation.

Put another way, socialism was the remedy to the declining rate of profit that was put forward by some 19th century economists. That is precisely the remedy that has been put in place for the 21st century. The question now is do we want a socialism for the rich, or a socialism that benefits the poor and working class. This question is what divides left from right, although it is obscured by other arguments and ideological tendencies. Part of this obscuring process is to insist that there is no difference between, say, the left wing of the Democratic party and the Republican party. Clearly, there is such a difference, one that we should better understand.
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Yuli Ban
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Re: Economic and jobs news thread

Post by Yuli Ban »

A record 4.4 million Americans quit their jobs in September as the sheer volume of available jobs is empowering workers to have their pick.

Workers are quitting in search for better pay or better jobs, representing a fundamental shift in America's labor market.
"Labor now has the initiative, and the era of paying individuals less than a livable wage has ended," said Joseph Brusuelas, chief economist at RSM US. "This strongly suggests that rising wages are going to be part and parcel of the economic landscape going forward."
The nation had 10.4 million open jobs that month as the worker shortage crisis continues, data from the Bureau of Labor Statistics showed Friday. It was a modest decrease from the 10.6 million open jobs in August.
And remember my friend, future events such as these will affect you in the future
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caltrek
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Re: Economic and jobs news thread

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^^^Of course, one aspect of this situation is the impact on inflation. Especially when monopoly sectors can simply pass along the increased wage costs to the consumer.

Goldman: "Inflation will get worse"
November 16, 2021

https://www.axios.com/goldman-sachs-inf ... 57cd0.html

Entire Article (less graph):
(Axios) "The current inflation surge will get worse this winter before it gets better," Goldman Sachs Global Investment Research warns clients in a "2022 U.S. Economic Outlook."

Driving the news: But Goldman expects the economy "to reaccelerate to a 4%+ growth pace over the next few quarters as the service sector continues to reopen, consumers spend part of their pent-up savings, and inventory restocking gets underway."

Goldman sees the unemployment rate — 4.6% in October — falling to "3.7% at mid-year and 3.5% — the pre-pandemic 50-year low — by end-2022."
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weatheriscool
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Re: Economic and jobs news thread

Post by weatheriscool »

Americans ramped up retail spending a strong 1.7% last month
Source: AP

By CHRISTOPHER RUGABER
WASHINGTON (AP) — Americans largely shrugged off higher prices last month and stepped up their spending at retail stores and online, providing a boost to the economy.

Retail sales rose a seasonally adjusted 1.7% in October from September, the U.S. Commerce Department said Tuesday. That’s the biggest gain since March and up from 0.8% in the previous month. Much of the sales increase also reflected higher prices.

Solid hiring, strong pay raises, and healthy savings for many households are underpinning robust spending. Americans are also still buying more cars, furniture, and other goods than they did before the pandemic, which is overwhelming U.S. ports and shipping firms and pushing up prices. The solid spending last month suggests the holiday shopping season is off to a strong start.

Tuesday’s retail sales figures aren’t adjusted for inflation, which rose 0.9% in October, the government said last Wednesday. In some categories, such as gas station sales, which rose 3.9% in October, a jump in gas prices accounted for nearly all the gain. Gas prices rose 3.7% in October, according to the government’s inflation report.


Read more: https://apnews.com/article/business-eco ... f4b59a006b
weatheriscool
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Re: Economic and jobs news thread

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US budget deficit eases to $165B in October, down 42%
Source: AP

By MATT OTT

The U.S. monthly budget deficit fell in October as the government collected more taxes from individuals and corporations thanks to a much improved economy emerging from the coronavirus pandemic.

The Treasury Department reported Wednesday that the federal government posted a deficit of $165 billion last month. That was 42% lower than the same month last year when it rang up a record October deficit of $284.1 billion. At that time revenues were declining while spending to deal with the impact of the coronavirus soared.

This October, the first month on the government’s calendar for fiscal 2022, spending fell 14% from last year to $449 billion, while revenues rose 19% to an October record of $284 billion.

Treasury officials said Wednesday that the lower October deficit this year was attributable to more tax revenue from millions more people back working, and booming corporate profits as the economy reopened. Last October, there were still no vaccines and many businesses suffered as people remained holed up at home.


Read more: https://apnews.com/article/coronavirus- ... 21bdbf4a23
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caltrek
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Re: Economic and jobs news thread

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Inflation is Complicated, but Making it Better Doesn't Have to Be
by Domenica Ghanem
November 17, 2021

https://otherwords.org/inflation-is-com ... ave-to-be/

Introduction:
(Other Words) Many Americans are noticing the rising price of goods from sour cream to carburetors as politicians sound the alarm on an inflation crisis.

You may be wondering what single force would cause the cost of a dairy product to go up at the same time as the cost of a car part. The truth is that not all inflation is the same. Each sector has its own issues.

And none of it is solved by less government funding for our safety net, as some politicians have proposed.

Some of it is what we can call pandemic inflation. Because our economy bounced back quicker after the COVID-19 shutdowns than anyone predicted — thanks largely to investments from the American Rescue Plan — people have more spending money and demand has risen faster than our underinvested supply chain could handle.

This rising demand accounts for price flares in auto manufacturing and lumber, for example. At the same time, you’ll notice prices that had plummeted during the shutdowns returning to pre-pandemic levels. Think: plane tickets
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caltrek
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Re: Economic and jobs news thread

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Jerome Powell to Keep His Job as Chair of the Fed
by Veronika Dolar

https://theconversation.com/jerome-powe ... omy-171812

Introduction:
(The Conversation) The person who helms the Federal Reserve is one of the most powerful figures in the world. Their job is also one of the most impactful on the lives of ordinary Americans, not to mention others across the world.

That will be especially true in the coming months as the Fed seeks to tame soaring prices without jeopardizing the economic recovery. The consequences of getting it wrong could be catastrophic and result in higher inflation, a return to recession or, worse, the Fed might have to deal with stagflation – in which you get both rising prices and a sluggish economy.

Jerome Powell is the current chair of the Fed, but his first term was set to expire in February. Progressive Democrats had been pushing President Joe Biden to replace him with Lael Brainard, a Harvard economist who is currently serving as the only registered Democrat on the board of governors of the Federal Reserve System. Progressives prefer her in part because she appears to be more sympathetic to more financial regulation and Fed action on climate change.

On Nov. 22, 2021, Biden announced he was sticking with Powell, after weeks in which Wall Street investors, economists like me and other central bankers around the world impatiently waited word. Powell had long been considered very likely to keep the job. Biden also elevated Brainard, nominating her to be vice chair. Both moves are subject to Senate confirmation.
Don't mourn, organize.

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