Economic and jobs news thread

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caltrek
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The 1% Move Report
October 3, 2022

Introduction:
(Morgan Stanley)
What Happened in the Markets?
• The S&P 500 Index rose 2.6% Monday to close at 3,678. With the rally, the index is now down 22.8% year to date.
• Stocks surged on Monday as the first day of the fourth quarter commenced. After closing the month of September down 9.3%, the S&P 500 Index recorded its best day since July. It appeared short-term oversold conditions contributed to today's bounce, as just 3% of S&P 500 constituents traded above Friday's 50-day moving averages (DMA). This compares with over 90% of constituents trading above their 50-DMA's in mid-August. Additionally, sharply lower interest rates and rallying commodity prices helped buoy sentiment Monday.
• Reports of OPEC+ plans to scale back production helped WTI oil rally nearly 5%.
• All 11 S&P 500 sectors improved, with Energy (+5.8%) and Materials (+3.4%) the relative outperformers, while Consumer Staples (+1.7%) and Consumer Discretionary (+0.2%) underperformed.
• As of the 4pm equity market close, the 10-year Treasury yield declined to 3.66%. Gold prices gained over 2% to above $1,700 on the back of lower interest rates. The US Dollar Index modestly declined.
Read more here: S&P Market 1% Move Report | Morgan Stanley

caltrek’s comment: In all honesty, I missed posting a couple of One Percent Swing Reports in which the market went down. In such cases, pay attention to “the index is now down 22.8% year to date” which is typically a part of the first bullet.
Don't mourn, organize.

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weatheriscool
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Re: Economic and jobs news thread

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America’s national debt has now surpassed $31 trillion

By Alicia Wallace, CNN Business
Published 6:31 PM EDT, Tue October 4, 2022

Minneapolis (CNN Business) — America’s national debt has climbed north of $31 trillion for the first time, a milestone that comes at a time of historically high inflation, rising interest rates and growing economic uncertainty.

The nation’s total public debt outstanding closed at $31.1 trillion on Monday, according to Treasury Department data published Tuesday.

The US government went on a borrowing spree during the Covid-19 pandemic to help shore up the nation’s economy as the deadly virus upended lives, labor markets and supply chains. Outstanding debt has climbed nearly $8 trillion since the beginning of 2020. And it has jumped by $1 trillion in just eight months.

The borrowing that occurred under the Trump administration and early on in the Biden administration came at a time when interest rates were low. Now, during a period of historically high inflation and a series of steep interest rates hikes by the Federal Reserve in its battle to tame rising prices, borrowing costs are far higher.
{snip}

Read more: https://www.cnn.com/2022/10/04/economy/ ... index.html
weatheriscool
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Re: Economic and jobs news thread

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US mortgage rates hit 16-year high
Source: The Hill
Mortgage rates reached a 16-year high last week, further dampening demand from home buyers, according to data from the Mortgage Bankers Association released Wednesday.

The 30-year fixed mortgage rate rose to 6.75 percent in the final week of September, the highest figure since 2006. Mortgage rates have climbed a whopping 1.3 percentage points over seven straight weeks of increases.

Mortgage applications fell 14.2 percent from the week prior, according to the MBA, amid rising mortgage rates, which stem from the Federal Reserve’s persistent interest rate hikes aimed at fighting inflation.

“The steep increase in rates continued to halt refinance activity and is also impacting purchase applications, which have fallen 37 percent behind last year’s pace,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

Read more: https://thehill.com/policy/finance/hous ... year-high/
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Re: Economic and jobs news thread

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Jobs report: U.S. payrolls grew by 263,000 in September, unemployment rate falls to 3.5%
Source: Yahoo! Finance
Job growth slowed for a second month in September as a series of supersized interest rate hikes permeated the U.S. economy, but the softer nonfarm payroll gain is still unlikely to deter policymakers from aggressive monetary action to fight inflation that remains at a decades-high. Here are highlights from the latest monthly jobs report released by the Labor Department on Friday, compared to consensus estimates from Bloomberg.

Non-farm payrolls: +263,000 vs. +255,000 expected

Unemployment rate: 3.5% vs. 3.7% expected

Average hourly earnings, month-over-month: +0.3% vs. +0.3% expected

Average hourly earnings, year-over-year: +5.0% vs. +5.0% expected



The cool-off in September employment data is a welcome sign for Fed officials trying to tamp down an extraordinarily tight labor market that has placed upward pressure on wages and contributed to soaring prices. However, the print remains well above estimates and leaves room for the U.S. central bank to proceed with hefty rate increases. “Today’s job number is a hawkish reading, with almost all the elements of the report moving in the wrong direction for the Fed," Principal Global Investors Chief Global Strategist Seema Shah said in a note.

Stock futures plunged and Treasury yields spiked immediately following the report. "Payrolls were broadly in line with expectations but, importantly in this good news is bad news: markets were hoping for a downside surprise today," Shah added. "Instead, the number only confirms that the Fed needs to hike rates by a fourth consecutive 0.75% in November.” Despite the drop off in jobs added during the month, the unemployment rate fell to 3.5%, while economists had expected the figure to hold at 3.7%. The labor force participation rate in September ticked down only slightly to 62.3% from 62.4% the prior month.
Read more: https://finance.yahoo.com/news/septembe ... 36987.html
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caltrek
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Democrats Say Bill to Kill Price Controls Shows GOP 'Wants You… to Spend More' on Meds
by Jessica Corbett
October 7, 2022

Introduction:
(Common Dreams) Democratic leaders on Friday blasted a new Republican bill that would roll back modest prescription drug pricing reforms that U.S. President Joe Biden recently signed into law.

Republican Sens. James Lankford (Okla.), Mike Lee (R-Utah), Cynthia Lummis (Wyo.), and Marco Rubio (Fla.) introduced a bill that would repeal the medication-related provisions—including Medicare drug price negotiation—of the Inflation Reduction Act (IRA), which Democrats sent to Biden's desk without GOP support using the budget reconciliation process.

In a statement slamming the GOP's so-called Protecting Drug Innovation Act, White House Press Secretary Karine Jean-Pierre invoked former President Donald Trump's Make America Great Again (MAGA) campaign slogan.

"Today, MAGA congressional Republicans introduced legislation that puts special interests before working families," she said. "Their new bill is a giveaway to Big Pharma at the expense of seniors by ending Medicare's new ability to negotiate lower drug prices. Their vision for the country is extreme and out of touch with working families across the country."
Read more here: https://www.commondreams.org/news/2022 ... more-meds

caltrek’s comment: This is yet another example of how the Republicans love to complain about inflation, and yet are unwilling to do anything about it except resort to the same old tied rhetoric regarding tax breaks and trickle down economics. We have seen a recent example of that in Great Britain. Notice how the “smart money” (investors) reacted to that nonsense there.
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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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Markets are down again:

One Percent Swing Report for October 7, 2022

Introduction:
(Morgan Stanley)

What Happened in the Markets?

• The S&P 500 Index declined 2.8% Friday to close at 3,640. With the sell-off, the index is now down 23.6% year-to-date.

• Stocks extended the losing streak to three straight sessions on Friday. However, even with the recent downside, the S&P 500 Index ended the week higher for the first time in a month. Nonfarm payrolls were above expectations today, while the unemployment rate declined to 3.5%, the prior cycle low. A better-than-expected employment report caused markets to adhere to the narrative that the Federal Reserve will continue its swift hawkish tightening path. As a result, interest rates rose across the curve today.

• Next week Q3 earnings season will kick off with several large cap banks scheduled to release results.

• All 11 S&P 500 sectors declined, with Energy (-0.7%) and Consumer Staples (-1.6%) the relative outperformers, while Consumer Discretionary (-3.5%) and Information Technology (-4.1%) underperformed.

• As of the 4pm equity market close, the 10-year and the 2-year Treasury yields rose to 3.89% and 4.31%, respectively.
Read more here: https://www.morganstanley.com/content/ ... -20221007
Don't mourn, organize.

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Re: Economic and jobs news thread

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Core US Inflation Rises to 40-Year High, Securing Big Fed Hike

Reade Pickert
Thu, October 13, 2022 at 8:37 AM · 2 min read
{snip}

A key gauge of US consumer prices advanced to a 40-year high in September, underscoring persistent, elevated inflation that’s squeezing households and pushing the Federal Reserve toward another steep interest-rate hike. ... The core consumer price index, which excludes food and energy, increased 6.6% from a year ago, the highest level since 1982, Labor Department data showed Thursday. From a month earlier, the core CPI climbed 0.6% for a second month. ... The overall CPI increased 0.4% last month, and was up 8.2% from a year earlier. The median forecasts in a Bloomberg survey of economists had called for a 0.4% monthly rise in the core and a 0.2% gain in the overall measure. {snip} Shelter, food and medical care indexes were the largest of “many contributors,” the report said. Gasoline declined.

The report stresses how high inflation has broadened across the economy, eroding Americans’ paychecks and forcing many to rely on savings and credit cards to keep up. While consumer price growth is expected to moderate in the coming months, it’ll be a slow trek down to the Fed’s goal.

Policy makers have responded with the most aggressive tightening campaign since the 1980s, but so far, the labor market and consumer demand have remained resilient. The unemployment rate returned to a five-decade low in September, and businesses continue to raise pay to attract and retain the employees needed to meet household demand.

On the heels of a solid jobs report last week, the CPI report likely cements an additional 75-basis point interest rate hike at the Fed’s November policy meeting. Traders solidified bets for the jumbo-sized hike next month. Stock futures fell sharply and Treasury yields rose following the report.

{snip}
Read more: https://finance.yahoo.com/news/core-us- ... 13300.html
weatheriscool
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US Jobless Claims Reach Six-Week High in Wake of Hurricane Ian

By Augusta Saraiva
October 13, 2022, 12:34 PM UTC | Updated on October 13, 2022, 12:39 PM UTC
Applications for US unemployment insurance increased to a six-week high, driven in part by a jump in Florida claims in the aftermath of Hurricane Ian.

Initial unemployment claims rose by 9,000 to 228,000 in the week ended Oct. 8, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 225,000 new applications.

{snip, paywall}

Read more: https://www.bloomberg.com/news/articles ... ricane-ian
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caltrek
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Even in What Seems Like a Bear Market, Stocks Can Go UP
by Matt Phillips
October 14, 2022

Introduction:
(Axios) Sometimes Wall Street makes sense. Other times, it doesn’t. Thursday was the latter.

The big picture: Stocks rallied sharply, despite a worse-than-expected inflation report that all but ensured the Fed's relentless rate-hiking would continue.
• As we’ve written about all year, rate hikes have been the key driver of what, through Q3, has been the worst year for the stock market since 2002.
• And the S&P 500 did, in fact, plunge after the inflation report, opening down 2%. However, it then boomeranged, closing up 2.6%.

Context: Yes, stocks go up and down all the time. But the size of the swing from the opening tick was highly unusual.
Read more here: https://www.axios.com/2022/10/14/bear- ... ocks-fomo
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caltrek
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CEOs Are Literally Bragging About Raising Prices
by Jim Hightower
October 12, 2022

Introduction:
(Other Words)Today, CEOs of big corporations are playing the tricky “Inflation Blame Game.”

Publicly, they moan that the pandemic is slamming their poor corporations with factory shutdowns, supply chain delays, wage hikes, and other increased costs. But inside their boardrooms, executives are high fiving each other and pocketing bonuses.

What’s going on? The trick is that these giants are in non-competitive markets operating as monopolies, so they can set prices, mug you and me, and scamper away with record profits.

In 2019 for example, before the pandemic, corporate behemoths hauled in roughly a trillion dollars in profit. In 2021, during the pandemic, they grabbed more than $1.7 trillion. This huge profit jump accounts for 60 percent of the inflation now slapping U.S. families!

Take supermarket goliath Kroger. Its CEO gloated last summer that “a little bit of inflation is always good in our business,” adding that “we’ve been very comfortable with our ability to pass on [price] increases” to consumers.
Read more here: https://otherwords.org/ceos-are-litera ... g-prices/
Don't mourn, organize.

-Joe Hill
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