Economic and jobs news thread

weatheriscool
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Fed survey shows inflation expectations match highest on record

Emily McCormick · Reporter
Mon, June 13, 2022, 10:00 AM
U.S. households' expectations for inflation over the coming year rose to match the highest recorded level on record in May, according to new data from the New York Fed.

The NY Federal Reserve's Survey of Consumer Expectations released Monday showed consumers in May anticipate inflation will rise at a 6.6% rate over the next year, up from an April reading of 6.3%. May's reading tied with March's print for the highest on record, in data spanning back to June 2013. (1)

Longer-term inflation expectations were slightly more subdued last month, with consumers looking for inflation to average 3.9% over the next three years. This expectation, however, is still well above the Fed's 2% target. These longer-term expectations were unchanged from April.

This data further complicates the job of the Federal Reserve's task to bring down rising prices and prevent expectations from becoming embedded among consumers.
{snip}

(1) https://www.newyorkfed.org/microeconomi ... /inflexp-2

Read more: https://finance.yahoo.com/news/househol ... 38577.html
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caltrek
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Can Blaming Corporate Greed Save Democrats on Inflation?
by Christian Paz
June 11, 2022

Introduction:
(Vox) Americans don’t need the Labor Department to tell them that prices remain high. Still, Friday’s consumer price index report for May revealed that inflation reached a 40-year high, an 8.6 percent increase last month compared to a year ago. Energy and food supply shocks from the Russia-Ukraine war, pandemic-related employment and production shortages, and strong consumer demand, especially in airline travel, all contributed to higher prices.

The Biden White House knows that the economy will be the primary matter on the ballot in midterm elections this year; that’s partly why President Joe Biden has dedicated the month of June to voicing the ways the White House is trying to soften the blow of rising prices, while giving the Federal Reserve cover to raise interest rates.

But Democrats also know that they have a major messaging problem. CNN and NBC News both reported in the last month that Biden is frustrated he can’t break through the bad economic vibes to convince the American people that, objectively, the economy is doing pretty well. Faced with competing priorities by different audiences in his party, in Congress, and among the public, the White House is struggling to find an enemy to pin that fault on without admitting that, just maybe, the president’s crowning economic accomplishment was partially responsible for worsening inflation.

Still, Democrats in Congress and the White House may not be going after two perfect villains hard enough: large corporations and billionaires, which progressive think tanks, economists, and activist groups say bear some of the responsibility for rising costs of living.

Starting with local demonstrations and continuing to organize throughout this year, an array of progressive groups are trying to shift the national conversation on inflation toward corporate giants — and some think that national Democrats should do more to cast “corporate greed” and price gouging by big businesses and Republican politicians as bigger culprits for still sky-high prices. They also argue that beyond turning the tide on Biden’s approval rating, focusing on a populist economic message can win back working-class voters in competitive House districts.
Read more here: https://www.vox.com/23163167/democrats ... e-gouging
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Wholesale inflation climbs 10.8% in May, hovering near 40-year high
Economists expected wholesale inflation to jump 10.9% in May

https://www.foxbusiness.com/economy/who ... 175be38b67
By Megan Henney FOXBusiness
Wholesale prices accelerated again in May as inflation tightened its stranglehold on the U.S. economy, adding to the financial pressure on millions of Americans.

The Labor Department said Tuesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, climbed 10.8% in May from the previous year. On a monthly basis, prices grew by 0.8%. Although that was slightly lower than the 10.9% forecast from Refinitiv economists, the reading – near a record-high of 11.5% notched in March – suggests that inflationary pressures in the economy remain strong.
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Tech layoffs accelerate in June, with more than 7,000 losing their jobs so far

06-14-22
2:25 PM

Last month’s stock market volatility is looking like the calm before the storm. The NASDAQ has fallen more than 7% in the past month—and year to date, it’s down 32%.

The decline in the tech-heavy stock index is a barometer of the tech sector, meaning the unbridled growth of the past few years is contracting sharply as well. That’s been accompanied by recent warnings from the venture capital community that fundraising would be much more challenging for founders for the foreseeable future. Already, the layoffs have begun accumulating. May saw more than 16,000 tech layoffs. And since the beginning of June, more than 7,000 more positions have been eliminated.

Coinbase is the most recent. On Tuesday, the company announced plans to lay off 18% of its full-time workforce. With approximately 5,000 workers, that works out to about 1,100 people.

A looming possible recession and overly optimistic growth are being blamed for the decision. Earlier, the company had announced plans to pause hiring, rescinding an undetermined number of accepted job offers, which left many people stranded after leaving their previous jobs.

“We appear to be entering a recession after a 10+ year economic boom,” CEO Brian Armstrong wrote in an email to employees. “A recession could lead to another crypto winter, and could last for an extended period. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”

https://www.fastcompany.com/90760999/te ... obs-so-far
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Wells Fargo chief economist Jay Bryson says the U.S. will have a recession in 2023.
Wells Fargo said the sharp increases in interest rates, which will raise borrowing costs across the economy, are likely to trigger a "mild recession" in mid-2023.

The bank's chief economist Jay Bryson previously thought the Fed could tame inflation without slowing growth dramatically.

"In our view, the recession will be more or less equivalent in magnitude and duration to the downturn of 1990-1991. That recession lasted for two quarters with a peak-to-trough decline in real GDP of 1.4," Bryson said in a note to clients Wednesday.
https://www.yahoo.com/finance/news/well ... 03710.html
weatheriscool
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Mortgage rates surge to the highest point since 2008

Ronda Lee
Thu, June 16, 2022, 10:00 AM

Mortgage rates this week jumped by the largest amount in 35 years, making home-buying significantly more unaffordable in just seven days.

The rate on the 30-year fixed rate mortgage surged to 5.78% from 5.23% last week, according to Freddie Mac, marking the biggest one-week increase since 1987 and hitting the highest level since November 2008. The average rate is more than two and a half points higher since just the start of the year.

Rapidly increasing mortgage rates have become the biggest hurdle homebuyers face in addition low inventory levels and double-digit price gains, pricing many out of the market altogether.

“Climbing mortgage rates continue to put pressure on the housing market, pushing the cost of homeownership ever higher,” Hannah Jones, economic data analyst at Realtor.com, said in a statement. “There has been little relief for American consumers at the grocery store, the pump, and in both the for-sale and rental markets."
{snip}

Read more: https://finance.yahoo.com/news/mortgage ... 25821.html
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caltrek
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Report Finds California Boasts Biggest Job Gains in the Nation
by Natalie Hanson
June 17, 2022

Introduction:
SACRAMENTO, Calif. (Courthouse News) — California continues to push past the rest of the country in recovering job growth from the pandemic’s impacts, starting the summer with more new jobs created in the past year than in any other state.

National recovery is troubled: inflation hit a 40-year high as stock prices continued to fall and the Federal Reserve imposed the biggest interest rate hike in almost three decades.

According to the jobs report released Friday by California’s Employment Development Department, the state has reduced unemployment rates to the same levels as before the coronavirus pandemic began, at 4.3%. Nearly 17.5 million Californians were employed last month, compared to 835,100 unemployed, a 663,500 decrease from May 2021.

The report found 42,900 new jobs were created in May, recovering 93% out of 2.75 million farm jobs lost during March and April of 2020 due to the pandemic. The number of jobs in the agriculture industry increased from April by 6,300 to total 420,200 jobs in May, topping last May’s employment figure by 17,300.

“California’s economic recovery continues to make incremental gains, with another month of five-figure job growth and the unemployment rate returning to pre-pandemic levels,” Governor Gavin Newsom’s office reported in a statement.
Read more here: https://www.courthousenews.com/report- ... e-nation/
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US: Industrial Production rises by 0.2% in May vs. 0.4% expected
Source: FX Street

NEWS | 6/17/2022 1:19:37 PM GMT | By Eren Sengezer

-- Industrial Production in US grew at a softer pace than expected in May.
-- US Dollar Index clings to strong daily gains above 104.50.

Industrial Production in the US expanded by 0.2% on a monthly basis in May, the data published by the US Federal Reserve revealed on Friday. This print followed April's expansion of 1.4% and came in weaker than the market expectation of 0.4%.

"In May, manufacturing output declined 0.1% after three months when growth averaged nearly 1%," The Fed's publication further read. "Capacity utilization edged up to 79.0%, 0.5 percentage point below its long-run (1972–2021) average."

{snip}

Read more: https://www.fxstreet.com/news/us-indust ... 2206171319
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US retail sales unexpectedly drop in May as inflation weighs on spending

Alexandra Semenova · Reporter
Wed, June 15, 2022, 8:37 AM

U.S. retail sales registered a bigger-than-expected drop in May as record gasoline and food prices prompt households to cut back spending.

The Commerce Department said Wednesday that retail sales fell 0.3% last month, down sharply from April's 0.9% increase. Economists surveyed by Bloomberg expected May data to show a rise of 0.1%. (1)

Read more: https://finance.yahoo.com/news/may-reta ... 34719.html
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