Economic and jobs news thread

[Yuli Ban]

[caltrek]

The GOP Has Nothing to Offer on Inflation
by Jim Hightower
March 9, 2022

https://otherwords.org/the-gop-has-noth ... inflation/

Introduction:

(Other Words) Republican politicos are all over Joe Biden for failing to stop inflation. Perhaps you wonder, though, what these squawkers would do if they were in charge.

No need to wonder — just look back to 1974, when Americans were being pummeled by price spikes that topped 12 percent, nearly double what we’re enduring today. Back then, President Gerald Ford and his Republican contingent in Congress met the challenge head-on with a new magical program of economic uplift they called “WIN”: Whip Inflation Now!

But it was nothing — just a political slogan with no magic and no action behind it

...

Conclusion:

Yet, this time, Republican leaders are more surreal, not even pretending to have a solution. They’re even holding up President Biden’s Fed nominees*, who actually could do something about inflation, and will likely oppose Democratic legislation to crack down on price gouging.**

And we don’t even get a button.

* https://www.npr.org/2022/02/15/10808900 ... -inflation

**https://energycommerce.house.gov/commit ... rate-price

[caltrek]

It's Not Just Inflation - Its Price Gouging
by Lindsay Owens
March 9, 2022

https://otherwords.org/its-not-just-inf ... e-gouging/

Extract:

(Other Words) If you’ve been slammed lately by higher prices on everything from groceries to rental cars and gas prices, you’re probably wondering what on earth is behind these skyrocketing costs.

...
Four times a year, corporations are required by law to update their investors on how they’re doing in terms of sales and profits. These are called “earnings reports,” and the companies will usually hold calls with the investors to walk them through the latest report.

My organization, Groundwork Collaborative, recently got our hands on the transcripts from hundreds of these earnings calls. And you won’t believe what CEOs are boasting about.

Knowing that the current inflation frenzy is a convenient scapegoat, these companies are charging customers even more to pad their profit margins. They are just admitting it — they’re openly bragging to investors about how well it’s working.
…
And now, the conflict in Ukraine is providing yet another opportunity for oil and gas companies to pad their bottom lines. (See article linked and cited below). “It’s tragic what’s going on in Eastern Europe,” said one oil executive in late February. “But if anything, these high prices, the volatility, drive even more energy security and long-term contracting.”

Vultures Are Circling the Ukraine Crisis
by Kate Aronoff
February 25, 2022

https://newrepublic.com/article/165487/ ... as-profits

Introduction:

(The New Republic) The winners of Vladimir Putin’s cruel, imperialist war on Ukraine are few and far between. But some of them could be found on an upbeat earnings call held Thursday by Cheniere, America’s largest exporter of liquefied natural gas, or LNG, whose stock jumped 7.6 percent as markets opened just hours after Russia’s invasion began.

“It’s tragic what’s going on in Eastern Europe, and it saddens me to see the satellite images on the newscreen that we’ve all witnessed this morning,” Cheniere President and CEO Jack Fusco said, responding to JP Morgan analyst Jeremy Tonet’s question about the company’s prospects on the continent in light of the conflict. “But if anything, these high prices, the volatility, drive even more energy security and long-term contracting.”
Fusco appears to have been referring to his industry’s desire for extended gas-supply deals in Europe, which have been harder to come by as the continent begins moving away from fossil fuels. Times haven’t been too tough, though: Cheniere reported a record $15.9 billion in revenue last year. “The fact that there’s scarcity of LNG these days,” Fusco continued, “is driving more and more conversation on how to increase our infrastructure and secure long-term contracts for our European customers.”

Anatol Feygin, the company’s vice president and chief commercial officer, noted that Cheniere’s tankers are well positioned to supply Europe—“a key part of the solution going forward.” He added that the “human toll and tragedy obviously has our thoughts and prayers.”

Russia meets about a third of Europe’s energy demand. There is a real threat—not yet acted upon—that Putin could turn off the taps as retaliation for Western sanctions, or for some other reason entirely. U.S. LNG producers have already been selling more gas to Europe in recent months at elevated prices. Those prices are in part a result of Putin already constraining eastward gas flows, but also due to cold weather and surging global demand as more countries ease lockdown restrictions. For the first time ever last month, the United States exported more gas to Europe than Russia delivered to the continent via pipeline.

[weatheriscool]

Inflation sets fresh 40-year high: February CPI rises 7.9% over last year

Emily McCormick · Reporter

U.S. consumers paid more for a variety of goods and services in February compared to the prior month and year, with prices climbing across the economy amid lingering supply and demand imbalances.

The Bureau of Labor Statistics' Consumer Price Index (CPI) rose 7.9% in February compared to last year, marking the fastest annual jump since 1982. This took out January's previous 40-year high rate of 7.5%, and matched consensus economist expectations, according to Bloomberg data. ... On a month-over-month basis, consumer price increases also accelerated. The CPI rose 0.8% in February compared to January after increasing by 0.6% during the prior month.

A surge in energy prices was one of the key contributors to the latest red-hot CPI print. Even before Russia invaded Ukraine and raised concerns over global energy disruptions, oil and gas prices were on the rise, as demand for fuel oil and other energy products outstripped tight global supplies. In February, the energy index jumped 3.5% for the largest monthly rise since October. And over last year, the energy index was up 25.6%.

A further impact from the Russia-Ukraine crisis and extended jump in energy prices that has ensued will likely show up in the CPI data in March, given the invasion first began in late February. Since then, gas prices at the pump have jumped to record levels, and crude oil prices have climbed to 14-year highs and at least briefly topped $130 per barrel.

{snip}

Read more: https://finance.yahoo.com/news/consumer ... 14415.html

[caltrek]

Democrats Introduce Windfall Tax on Big Oil So Companies 'Pay a Price When They Price Gouge'
by Andrea Germanos
March 10, 2022

https://www.commondreams.org/news/2022/ ... rice-gouge

Introduction:

(Common Dreams) Congressional Democrats on Thursday introduced the bicameral Big Oil Windfall Profits Tax to target price gouging by profit-gorging fossil fuel companies amid Russian President Vladimir Putin's invasion of Ukraine.

"We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump—that starts with ensuring these corporations pay a price when they price gouge."

"This is a bill to reduce gas prices and hold Big Oil accountable," declared Rep. Ro Khanna (D-Calif.), who's leading the measure in the U.S. House.

"As Russia's invasion of Ukraine sends gas prices soaring," said Khanna, "fossil fuel companies are raking in record profits. These companies have made billions and used the profits to enrich their own shareholders while average Americans are hurting at the pump."

Sen. Sheldon Whitehouse (D-R.I.) introduced the legislation in the upper chamber along with co-sponsors including Sens. Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), and Bernie Sanders (I-Vt.).

[caltrek]

U.S. Corporations Boost Profits with Crushing Price Hikes Blamed on Inflation
by Brett Wilkins
March 10, 2022

https://www.commondreams.org/news/2022/ ... -inflation

Introduction:

(Common Dreams) Many of the most profitable U.S. corporations are raising prices under the pretext of inflation to boost profits and shareholder returns at the expense of consumers, an analysis published Thursday revealed.

Thirty leading companies in major categories of the U.S. Bureau of Labor Statistics' Consumer Price Index (CPI)—including food, energy, commodities, healthcare and shelter—have hiked prices while collectively increasing their profits by $151 billion, according to the analysis by the watchdog group Accountable.US.

"Across nearly every single industry that is measured for price changes, we're seeing highly profitable corporations demand more money for consumer staples that families depend on without a good reason why," said Accountable.US president Kyle Herrig in a statement.

"These companies would have consumers believe they marked up prices just to keep up with outside costs," he added, "but the tens of billions in extra profits and generous giveaways to investors last year show otherwise."

caltrek's comment: As a shareholder in many corporations, it upsets me that much of this gouging will go to increase the salaries of already overcompensated high-level managers instead of being paid out as dividends. Something not examined in this article. As a human being, it upsets me that those with the lowest incomes in our society will once again suffer the most from such recent developments.

[weatheriscool]

U.S. Consumer Sentiment Sinks as Inflation Expectations Soar

-- Michigan sentiment gauge drops to 59.7, lowest since 2011
-- One-year ahead inflation expectations hit four-decade high

By Emma Kinery
March 11, 2022, 10:00 AM EST Updated on March 11, 2022, 10:08 AM EST

U.S. consumer sentiment tumbled in early March to the lowest since 2011 and year-ahead inflation expectations rose to a four-decade high in the aftermath of Russia's invasion of Ukraine.

The University of Michigan's sentiment index dropped to 59.7, from 62.8 in February, data released Friday showed. The median estimate of economists in a Bloomberg survey called for a reading of 61. Consumers expect prices to rise 5.4% over the next year, the highest reading since 1981, according to the data.

The report showed the highest-ever share of Americans expecting their finances to worsen in the coming year, evidence of the growing toll inflation is having on incomes. Prices at the grocery store and gas pump were rising even before the war, which is now making those purchases that much harder.

A gauge of current conditions decreased to 67.8 in early March, the lowest since 2009. The survey's measure of future expectations declined to 54.4, the weakest since 2011. Inflation expectations over the next five to 10 years held at 3%. ... That may offer some assurance to the Federal Reserve, who's trying to keep long-term inflation expectations from spiraling out of control. The central bank is likely to raise interest rates next week, its first hike since 2018.

{snip}

Read more: https://www.bloomberg.com/news/articles ... tions-soar

[caltrek]

'There Should Be Consequences for It': Ocasio-Cortez Slams Big Oil Price Gouging
by Brett Wilkins
March 14, 2022

https://www.commondreams.org/news/2022/ ... ce-gouging

Introduction:

(Common Dreams) Rep. Alexandria Ocasio-Cortez on Monday took aim at corporate profiteers, calling for "consequences" for those who price gouge under the pretext of record inflation and international crises.

Responding to a tweet from MSNBC host Stephanie Ruhle, who asked "what's going on" with gas prices averaging $4.43 a gallon nationwide, Ocasio-Cortez (D-N.Y.) replied: "Profiteering. And there should be consequences for it."

Echoing Ocasio-Cortez, fellow "Squad" member Rep. Ilhan Omar (D-Minn.) tweeted that "Big Oil CEOs need to be held accountable for profiteering."

Last week, Sen. Sheldon Whitehouse (D-R.I.) introduced the Big Oil Windfall Profits Tax to target fossil fuel companies profiteering amid Russian President Vladimir Putin's invasion of Ukraine. The measure is co-sponsored by Sens. Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), and Bernie Sanders (I-Vt.). Rep. Ro Khanna (D-Calif.) simultaneously introduced a House version.

In a separate tweet Monday, Ocasio-Cortez highlighted a failure by lawmakers to hold fossil fuel companies accountable—especially those who take money from the industry.

[weatheriscool]

Average U.S. mortgage rates rise; 30-year loan breaches 4%
Source: AP

WASHINGTON (AP) — Average long-term U.S. mortgage rates rose this week as the key 30-year loan vaulted over 4% for the first time since May 2019.

The increase came amid expectations that with inflation at a four-decade high, the Federal Reserve would raise its benchmark short-term interest rate at its policy meeting this week to cool the economy. That action came Wednesday, as the Fed increased the key rate — which it had kept near zero since the pandemic recession struck two years ago — by a quarter point. And the central bank signaled potentially up to seven additional rate hikes this year.

The increases mean that mortgage rates likely will continue to rise over the year.

Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year loan this week jumped to 4.16% from 3.85% last week. That’s a sharp contrast from last year’s record-low mortgage rates of under 3%. A year ago, the 30-year rate stood at 3.09%.

Read more: https://apnews.com/article/business-eco ... 635f2c2657

[weatheriscool]

Jobless claims: Another 214,000 Americans filed new claims last week

Emily McCormick · Reporter
Thu, March 17, 2022, 8:31 AM · 3 min read

New unemployment claims improved more than expected last week, further reflecting a tight labor market and relatively low levels of firings and layoffs.

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 March 12: 214,000 vs. 220,000 expected, 227,000 during prior week

-- Continuing claims, week ended March 5: 1.419 million vs. 1.480 million expected, 1.494 million during prior week

Jobless claims came in below 250,000 for a seventh consecutive week and hovered around pre-pandemic levels. Continuing claims, which track the total number of individuals claiming benefits across regular state programs, have held well below levels from even before the pandemic, coming in under 1.5 million for four consecutive weeks now. Throughout 2019, continuing claims averaged around 1.7 million per week.

The labor market has remained a bright spot in the U.S. economy, especially as a brief hit from the Omicron variant earlier this year unwound further in the most recent economic data.

{snip}

Read more: https://finance.yahoo.com/news/weekly-j ... 55584.html