Economic and jobs news thread

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caltrek
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weatheriscool wrote: Thu Mar 17, 2022 5:50 pm Average U.S. mortgage rates rise; 30-year loan breaches 4%
Source: AP

WASHINGTON (AP) —... 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...
Read more: https://apnews.com/article/business-eco ... 635f2c2657

More on that:

What the Fed Raising Interest Rates Means for Investors
by Alison Cenname
February 22, 2022

https://www.chase.com/personal/investme ... -investors

Introduction:
(J.P. Morgan)
  • By raising interest rates, the Fed wants to make borrowing more expensive.
  • Rising interest rates would encourage people to save more.
  • Less money circulating in the economy means slower economic growth and less inflation.
  • Rising interest rates are generally not welcomed by stock investors although there are certain sectors of the stock market that will benefit.
  • A Fed interest rate hike may see the price of existing bonds fall.
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Re: Economic and jobs news thread

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caltrek
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It’s a Big Deal that the Fed Raised Interest Rates Today
by Jacob Rosenberg
March 16, 2022

https://www.motherjones.com/mojo-wire/2 ... inflation/

Introdcution:
(Mother Jones) It finally happened: For the first time since 2018, after months of murmurs, the Federal Reserve rose interest rates.
As I wrote previously, it has been clear for the past few weeks that the Fed would begin raising rates. For most of the pandemic, the rate has been near zero. Raising rates is a big deal, and it could (likely will!) have material effects on your life. There’s a reason that the Wall Street Journal has it splashed on its website’s homepage in aggressively large font, replacing its ongoing coverage of Russia’s invasion of Ukraine:

(See article linked above quote box)

The idea behind Wednesday’s move is to combat inflation. Prices have risen far above the targets set by the central bank, causing particular strain at (as you may have heard) the gas pump. A traditional view of interest rates is that raising them is monetary policy that helps curb inflation. In the speak of someone who doesn’t droll over stock returns, this means the Federal Reserve is raising interest rates to try to stop prices from increasing but in doing so it could also slow down the whole economy.

In this way, the central bank is edging a dangerous path. Yes, raising rates could help cool inflation, but it would likely do so by raising unemployment—which could harm workers, cause suffering (among a smaller set of people than are hit by inflation, but much more acutely), and wreck the economic recovery that has bounced us back from Covid-19’s shock.

Here’s the wonk version of Jerome Powell, Fed chair, basically saying we’re trying to stop prices rising without ruining workers’ lives: “The plan is to restore price stability while also sustaining a strong labor market. That is our intention and we believe we can do that. But we have to restore price stability.
Edit: Introductory remark deleted.
Last edited by caltrek on Wed Mar 23, 2022 2:11 pm, edited 2 times in total.
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caltrek
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Re: Economic and jobs news thread

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Investors Ignore Inflation, Shrug at Fed’s Rate Hike and Overlook Ukraine War
by Nick Rummell
March 18, 2022

https://www.courthousenews.com/investor ... raine-war/

Introduction:
MANHATTAN (Courthouse News) — Inflation has not abated, the Federal Reserve finally raised interest rates, and Russia’s invasion of Ukraine persists at a terrible human cost. And yet Wall Street rallied midweek and ended Friday on an extremely high note.

By the closing bell, the Dow Jones Industrial Average gained 1,805 points for the week, while the S&P 500 and Nasdaq also pulled down big wins, nabbing 260 points and 1,050 points, respectively. The S&P 500’s gains were one of the best weekly outings for the index since late 2020.

Wall Street tries to remain days if not weeks ahead of announcements, and investors already have largely discounted inflation as well as the Fed’s interest rate hike. Instead, investors have focused primarily on kernels of good economic news over the past few days.

One of those kernels has been the price of oil. On the West Texas Intermediate exchange, barrels of crude oil dropped from about $110 to $93 earlier in the week. With Russia-Ukraine peace talks sputtering, barrels again rose above $100 a barrel but did not increase to their previous highs.

“Inflation will peak soon and there are plenty of signs pointing to a global economic slowdown regardless,” James Vogt at Tower Bridge Advisors wrote in an investor’s note Friday morning, noting that supply-chain backlogs are decreasing, oil prices have pulled back 20% over the last three days, and manufacturing indexes are dropping.
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Re: Economic and jobs news thread

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caltrek wrote: Mon Mar 21, 2022 4:22 pm Investors Ignore Inflation, Shrug at Fed’s Rate Hike and Overlook Ukraine War
by Nick Rummell
March 18, 2022

https://www.courthousenews.com/investor ... raine-war/

Introduction:
MANHATTAN (Courthouse News) — Inflation has not abated, the Federal Reserve finally raised interest rates, and Russia’s invasion of Ukraine persists at a terrible human cost. And yet Wall Street rallied midweek and ended Friday on an extremely high note.

By the closing bell, the Dow Jones Industrial Average gained 1,805 points for the week, while the S&P 500 and Nasdaq also pulled down big wins, nabbing 260 points and 1,050 points, respectively. The S&P 500’s gains were one of the best weekly outings for the index since late 2020.

Wall Street tries to remain days if not weeks ahead of announcements, and investors already have largely discounted inflation as well as the Fed’s interest rate hike. Instead, investors have focused primarily on kernels of good economic news over the past few days.

One of those kernels has been the price of oil. On the West Texas Intermediate exchange, barrels of crude oil dropped from about $110 to $93 earlier in the week. With Russia-Ukraine peace talks sputtering, barrels again rose above $100 a barrel but did not increase to their previous highs.

“Inflation will peak soon and there are plenty of signs pointing to a global economic slowdown regardless,” James Vogt at Tower Bridge Advisors wrote in an investor’s note Friday morning, noting that supply-chain backlogs are decreasing, oil prices have pulled back 20% over the last three days, and manufacturing indexes are dropping.
I can't tell to what degree the behaviour I've been watching is people building sandcastles on the beach and selling shares before the tide comes in, and what degree of it is the fact that since the great depression and 2008 there has been a change in investing that changes how it responds to the four horsemen.

I mean there is probably some 'it's a faith based money system, so if you just believe enough that it's going up, it will keep going up', while there is also a bit of over correcting 'buy the dip' doing on where folks see any small drops as a mark down sale which jumps the demand and causes a rise, and people hold through that expecting it either won't dip again, will return to this level after short dips, or will always climb.

But there is also a lot of corporate buy back, expectation that their losses will be bailed out by tax payers, but the profits are theirs to keep, And there is the military industrial complex and mercenary groups that can be invested in, pharma, and record profit shares in many monopolistic companies from 'inflation' on the food and fuel people need. It's a great time to be a share holder.
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caltrek
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Re: Economic and jobs news thread

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One Percent Move Report for March 22, 2022

https://www.morganstanley.com/content/m ... e-20220322

Introduction:
(Morgan Stanley) What Happened in the Markets?
  • The S&P 500 rose 1.1% Tuesday to close at 4,512. The index is now down 5.3% year to date after rebounding 8.2% since the 2022 low on March 8th. Constituents within the S&P 500 Consumer Discretionary and Information Technology sectors have outperformed the index off of 2022 lows.
  • Chair Powell presented at the National Association for Business Economics meeting Monday and echoed last week's FOMC commentary. Decisions have not yet been made on balance sheet reductions but could come as soon as the May meeting. Additionally, he indicated that if the FOMC decides "that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings," or if there is a "need to tighten beyond common measures of neutral and into a more restrictive stance," the FOMC will do so. Markets are pricing in 1.7 hikes for the May FOMC meeting, suggesting there is a 70% chance of a 50bp hike at the May meeting. Inflation remains high and a slower growth environment is materializing in the United States adding pressure to outlooks for revenue and margin expansion.
  • Ten S&P 500 sectors closed the day higher with Consumer Discretionary (+2.4%) and Communication Services (+2.0%) outperforming the broad market, while Energy (-0.7%), and Health Care (0.0%) lagged.
  • The 10-year Treasury yield was 2.38% by the 4 p.m. and WTI oil closed near $112 per barrel.
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Re: Economic and jobs news thread

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We've never really recovered from 2008.

In other news, I hear Elon Musk will now be the first trillionaire by 2024. That's 15 years earlier than some analysts had predicted just a few years ago.

Something is very, very wrong with our economic system.


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U.S. Weekly Jobless Claims Lowest Since 1969
March 24, 2022

https://www.cnbc.com/2022/03/24/us-week ... hrink.html

Introduction:
(CNBC) New applications for U.S. jobless benefits dropped to a 52-1/2-year low last week, while the number of Americans on unemployment rolls continued to shrink, pointing to rapidly diminishing labor market slack that will keep wage inflation rising.

Initial claims for state unemployment benefits fell 28,000 to a seasonally adjusted 187,000 for the week ended March 19, the lowest level since September 1969, the Labor Department said on Thursday. Economists polled by Reuters had forecast 212,000 applications for the latest week. Claims have declined from a record high of 6.149 million in early April 2020.

There are no signs yet that Russia’s one-month-old war against Ukraine, which has sent U.S. gasoline prices to record highs and is expected to worsen the strain on global supply chains, has impacted the labor market.

Companies are desperate for workers. There were 11.3 million job openings at the end of January, with a record 1.8 open positions per unemployed person.

This misalignment between demand for labor and supply is boosting wage growth, which is providing some cushion to households against the soaring gasoline prices, as well as feeding into high inflation.
Don't mourn, organize.

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caltrek
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Re: Economic and jobs news thread

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One Percent Move Report for March 24, 2022

https://www.morganstanley.com/content/m ... e-20220324

Introduction:
(Morgan Stanley) What Happened in the Markets?
  • The S&P 500 rose 1.4% Thursday to close at 4,520. With the rally, the index has recorded gains in six of the past eight sessions and is now down 5.2% year to date.
  • Focus remains on geopolitics, as additional sanctions against Russia were announced by the White House Administration, NATO and the Group of Seven today. Weekly jobless claims fell to the lowest level since 1969, which could have helped buoy sentiment on Thursday (see previous post - caltrek). Furthermore, S&P Global US PMIs came in higher than consensus expectations this morning.
  • All 11 S&P 500 sectors closed the day higher with Information Technology (+2.7%) and Materials (+2.0%) outperforming the broad market, while Consumer Staples (+0.6%) and Energy (+0.1%) lagged.
  • Yields were higher across the curve as the 10-year Treasury yield rose to 2.36% as of the 4 p.m. equity market close. WTI oil was lower to $111 per barrel while gold rose 1% to $1,960 per ounce. The US dollar was higher as measured by the US Dollar Index.
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Re: Economic and jobs news thread

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Private payrolls rose by 455,000 in March, topping expectations: ADP

Emily McCormick · Reporter
Wed, March 30, 2022, 8:15 AM · 2 min read
U.S. private sector employers brought back slightly more jobs than expected in March as the economy faced ongoing labor shortages and widespread vacancies.

Private sector payrolls rose by 455,000 in this past month, ADP said in its latest report Wednesday. Consensus economists were looking for 450,000 jobs to return, according to Bloomberg data. In February, employers brought back 486,000 payrolls, based on ADP's upwardly revised monthly print.

Job growth in the U.S. private sector has decelerated in every month since December, when nearly 800,000 payrolls returned in a single month, based on ADP's measures. Still, private payrolls have risen at a monthly rate well above pre-pandemic trends, even as the overall size of the U.S. workforce still remains depressed compared to levels before the virus.

ADP's report served as yet another affirmation of the strong momentum across the labor market, with private-sector job growth persisting for 23 consecutive months after a pandemic-related plunge in employment. However, widespread demand for labor and an elevated ratio of job openings to available workers has contributed further to the economy-wide inflationary pressures seen at present — leading some policymakers including Federal Reserve Chair Jerome Powell to now deem the labor market "tight to an unhealthy level."
{snip}

Read more: https://finance.yahoo.com/news/adp-jobs ... 53497.html
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