Economic and jobs news thread

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caltrek
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Re: Economic and jobs news thread

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What’s The Problem With 3.9 Percent Annual Wage Growth?
by Dean Baker
November 10, 2022

Introduction:
(Eurasia Review) Not much can surprise me these days, but I admit to being somewhat surprised when the near universal reaction to the October jobs report was that the Fed will have to keep raising interest rates. The key issue of course is whether the labor market is so tight that it is creating inflationary pressures in the economy.

The 261,000 job gain reported for the month can be seen as bad news in this respect. It is faster than we can sustain in an economy that is near full employment. But it is not that much faster, and other data indicated a strong, but more normal labor market, like we had in 2019.

The share of unemployment due to voluntary quits fell sharply from the record high reported in September. The 14.6 percent share is lower than in many pre-pandemic months. Average weekly hours remained at a normal pre-pandemic level, after having risen sharply earlier in the recovery. The rise was most likely due to employers having workers put in more hours when they were unable to hire additional staff. Presumably, they are no longer having as much difficulty in hiring.

But the most important argument against further rounds of aggressive rate hikes by the Fed was in the wage data. After seeing moderate growth in the hourly wage in both August and September, we got another moderate number for October. If we take the annualized rate over the last three months, it comes to 3.9 percent, that’s down from an annual rate of more than 6.0 percent last fall.

There are two important points about this wage growth number. The first is that the direction of change is unambiguously downward. Other wage series, like the Employment Cost Index or the unit labor costs from the Bureau of Labor Statistics productivity data show the same story, even if the drop is less dramatic.
Read more here: https://www.eurasiareview.com/10112022 ... wth-oped/
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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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It looks like the smart money liked the election results.

The 1% Move Report for November 10
November 10, 2022

Introduction:
(Morgan Stanley)
What Happened in the Markets?

• The S&P 500 rallied 5.5% Thursday to close at 3,956. Ninety-six percent of index constituents had positive returns. With the gains, the index has now fallen 17.0% year-to-date.

• All 11 S&P 500 sectors increased Thursday as Information Technology (+8.3%) and Real Estate (+7.7%) outperformed while Consumer Staples (+2.4%) and Energy (+2.2%) lagged.

• Thursday's CPI report showed that inflation in October was below the consensus expectations from both a headline and core perspective, causing a sharp rally across financial assets. US Headline CPI reported at 7.7% YoY, and 0.3% MoM, both below the estimates of 7.9% and 0.5%, respectively. Treasury bonds rallied, with 10-year yields dropping 25 basis points in the largest one-day fall since March 2020. This helped interest rate-sensitive equities outperform as growth and technology stocks led market gains. Commodities also saw strong upside moves as the US Dollar Index declined 2%, the largest daily drop since 2015.

• By the 4 pm equity market close, WTI oil was modestly higher to $86 per barrel. The US Dollar Index fell 2.3%, while gold improved 2.8% to $1,750 per ounce. Meanwhile, the 10-year US Treasury yield declined to 3.82% while the 2-year Treasury yield decreased to 4.33%. Bond markets are closed Friday in observance of Veteran's Day.
Read more here: https://www.morganstanley.com/content/ ... -20221110
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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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^^^More on that:

Markets Take Republican Midterm Losses in Stride With Inflation in Retreat
by Nick Rummel
November 10, 2022

Introduction:
MANHATTAN (Courthouse News) — Inflation data that show prices finally stabilizing brought welcome cheer to Wall Street this week before it could even properly mourn the midterms election results.

On Thursday, investors were gifted a rare treat: headline inflation came in under analyst forecasts. According to the Bureau of Labor Statistics, headline inflation picked up just 0.4% in October, compared with the 0.6% many had expected. Over the past 12 months, the inflation index has increased 7.7%, the smallest yearlong increase since January.

Equity futures rocked up within seconds of the report. Compounding moderate gains from earlier in the week, the Dow Jones Industrial Average gaining 800 points before the morning bell. By the finale of trading on Thursday — equity markets are open on Veterans Day, but bond markets are closed — the Dow picked up even more speed, gaining 1,198 for the day and 1,309 points since last week’s closing bell.

The S&P 500 and Nasdaq, both of which have had more tepid gains due to troubles among some technology companies, also ended up in positive territory for the week, gaining 185 points and 639 points, respectively, since last Friday.

Most of the price increases in October were due to gains in energy, which picked up 1.8% last month after three months of price declines, and more specifically the 19.8% increase in fuel oil prices. Shelter and transportation prices also continued to increase, both by 0.8% in October.

Also discussed is a noting of the election results on the market as well as plunging crypto markets. Other aspects of inflation are also briefly noted.

Read more here: https://www.courthousenews.com/markets ... -retreat/
Don't mourn, organize.

-Joe Hill
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Re: Economic and jobs news thread

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U.S. may skirt recession in 2023, Europe not so lucky - Morgan Stanley
Source: Reuters
Britain and the euro zone economies are likely to tip into recession next year, Morgan Stanley said, but the United States might make a narrow escape thanks to a resilient job market.

At the same time, China's expected reopening after almost three years of COVID-19 curbs is set to lead a recovery in its own economy and other emerging Asian markets, the investment bank's analysts said in a series of reports published on Sunday.

"Risks are to the downside," the reports said, projecting the global economy to grow by 2.2% next year, lower than the International Monetary Fund's latest 2.7% growth estimate.

Next year, Morgan Stanley predicts a sharp split between developed economies "in or near recession" while emerging economies "recover modestly" but said an overall global pickup would likely remain elusive. China's economy was predicted to grow 5% in 2023, outpacing the average 3.7% growth expected for emerging markets, while the average growth in the Group of 10 developed countries was forecast at just 0.3%.
Read more: https://www.reuters.com/markets/us-may- ... 022-11-14/
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Re: Economic and jobs news thread

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Wholesale prices rose 0.2% in October, less than expected, as inflation eases

PUBLISHED TUE, NOV 15 2022 * 8:31 AM EST * UPDATED 7 MIN AGO

Jeff Cox

KEY POINTS
-- The producer price index rose 0.2% in October, below the 0.4% estimate.
-- A significant contributor to the slowdown in wholesale inflation was a 0.1% decline in services, the first outright decline in that measure since November 2020.
-- On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September.
-- In other economic news, the Empire State Manufacturing Survey for November registered a reading of 4.5%, much better than the estimate for a -6% reading.

Wholesale prices increased less than expected in October, adding to hopes that inflation is on the wane, the Bureau of Labor Statistics reported Tuesday. ... The produce price index, a measure of the prices that companies get for finished goods in the marketplace, rose 0.2% for the month, against the Dow Jones estimates for a 0.4% increase.

Stock futures tied to the Dow Jones Industrial Average were up more than 400 points shortly after the release, reflecting market anticipation that cost of living increases not seen since the early 1980s were easing if not receding.

On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September and off the all-time peak of 11.7% hit in March. The monthly increase equaled September's gain of 0.2%.

Excluding food, energy and trade services, the index also rose 0.2% on the month and 5.4% on the year. Excluding just food and energy, the index was flat on the month and up 6.7% on the year.

{snip}
Read more: https://www.cnbc.com/2022/11/15/wholesa ... eases.html
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Bearish Bets Build in the Stock Market
by Matt Phillips
November 18, 2022

Introduction:
(Axios) The market is actually up this month, but bearish bets are building fast.

The big picture: A measure of sentiment from the options markets shows that bets on falling stock prices have sharply outpaced those expecting prices to rise.

• This measure, known as the CBOE U.S. equity put/call ratio, has hit the highest — or most bearish — level on record in recent days.

How it works: The measure is a ratio of bets on falling prices, or "puts," versus bets on rising prices, known as "calls."
• During the zaniest days of the meme stock boom in January 2021, the put/call ratio fell to some of the lowest levels on record.
• That reflected near-manic levels of optimism, especially among retail investors, who were dominating the market.
Read more here: https://www.axios.com/2022/11/18/beari ... ck-market
Don't mourn, organize.

-Joe Hill
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Big Tech Powers Down Devices as Economy Sputters
by Peter Allen Clark
November 18, 2022

Introduction:
(Axios) Tech giants are ditching several consumer device product lines as dark economic forecasts make cost-cutting a priority.

The big picture: Tech’s biggest bear market in two decades has spurred tens of thousands of layoffs and plummeting stock prices, as companies scramble to find ways to minimize the downturn’s long-term impact.

What’s happening: Amazon's reported plan to lay off about 10,000 workers, per the New York Times, will involve cuts to the retail giant’s devices organization, which covers "Kindle, Alexa, Fire tablets, Fire TV, Echo, Astro, Ring, Blink, Halo, and Luna" (per an Amazon jobs site), as well as cuts in retail and human resources.
• The Wall Street Journal said last week that internal documents showed Amazon’s devices unit had an operating loss of more than $5 billion a year.

Over at Meta, last week executives said the giant was shutting down its Portal smart display platform and smartwatch projects.
Read more of the Axios article here: https://www.axios.com/2022/11/18/big-t ... downturn

Read the Wall Street Jouranl article on Amazon here: https://www.wsj.com/articles/amazon-ha ... alertNEWS
Don't mourn, organize.

-Joe Hill
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caltrek
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After Binging Last Week, Markets Slow Down to Digest Retail Sales and Earnings Reports
by Nick Rummel
Friday, November 18, 2022

Introduction:
MANHATTAN (Courthouse News) — Following one of the best rallies in years, Wall Street this week moderated its bearish reaction to disappointing corporate earnings reports and ebullience over more data showing inflation is being tamed.

All three indices had their up and down moments this week, but the extremes of weeks’ past were moderated to minor gains and losses. By Friday’s closing bell the Dow Jones Industrial Average was a the same exact point as last Friday: at 33,747 points. The S&P 500 and Nasdaq both ended up slightly down for the week, losing 27 points and 177 points, respectively.

Investors were bombarded with a number of data points this week. On Tuesday, the Bureau of Labor Statistics released its producer price index, which showed demand increased by only 2% in October, half of the forecast from the expert consensus. The data underline the belief that inflation is moderating, and investors reacted accordingly, with markets on Tuesday closing up moderately.

Prices decreased across the board, according to the report, but tucked within the data were nuggets that were even better than the overall headline. The production costs for passenger cars declined by the largest amount since May 2017, the prices of nonfood goods fell by 0.1% last month, and trade service prices declined by half a percentage point.

“The PPI report is further evidence that businesses are losing pricing power in a cooling economy,” said Bill Adams, chief economist at Comerica Bank, noting that business-to-business selling prices also are rising more slowly.
Read more here: https://www.courthousenews.com/after-b ... earnings/
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Re: Economic and jobs news thread

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Unemployment claims rise to 240,000, highest since August
Source: AP

By PAUL WISEMAN an hour ago
WASHINGTON (AP) — The number of Americans applying for unemployment benefits rose to the highest level since August but still remains low by historic standards.

The Labor Department reported Wednesday that 240,000 people applied for jobless aid last week, up by 17,000 from the week before. The four-week moving average of claims, which smooths out week-to-week volatility, rose by 5,500 to 226,750.

Applications for unemployment benefits are a proxy for layoffs and the current low levels shows that American workers enjoy extraordinary job security.

But it may not last.


Read more: https://apnews.com/article/business-2a0 ... osition_06
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Morgan Stanley One Percent Swing report for November 22, 2022

Introduction:

What Happened in the Markets?

• The S&P 500 rose 1.4% Tuesday to close at 4,004. This was the first time the S&P 500 Index closed above 4,000 since September 12th. With the gains, the index has now fallen 16.0% year-to-date.

• All 11 S&P 500 sectors rose Tuesday as Energy (+3.2%) and Materials (+2.2%) outperformed while Consumer Staples (+0.7%) and Real Estate (+0.5%) lagged.

• Equities moved higher as investors showed improved confidence in upcoming customer holiday shopping activity. Additionally, a number of better-than-expected earnings reports helped buoy sentiment, even as one major retailer highlighted inflation pressures on spending patterns. Additionally, ahead of tomorrow's release of the November FOMC meeting minutes, several Federal Reserve Officials spoke of slowing the pace of future rate hikes. Federal Reserve President Daly reminded investors that "the lags in monetary policy...likely take at least several quarters."

• By the 4 pm equity market close, WTI oil rose on potential OPEC+ cuts in output, up 1.4% to $81.2 per barrel, and the US Dollar Index declined modestly. The 10-year US Treasury yield decreased to 3.76% while the 2-year Treasury yield moved to 4.53%.
Read more here: https://www.morganstanley.com/content/ ... -20221122
Don't mourn, organize.

-Joe Hill
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