Economic and jobs news thread

[weatheriscool]

Inflation watch: Wholesale prices rose 0.2% in December, less than expected

Published Tue, Jan 14 20258:31 AM EST Updated 48 Min Ago
Jeff Cox
@jeff.cox.7528
@JeffCoxCNBCcom

Key Points

* The producer price index rose 0.2% in December, less than the 0.4% increase in November and below the Dow Jones consensus estimate for 0.4%.
* Excluding food and energy, the so-called core PPI was flat compared with the forecast for a 0.3% rise.
* The release is the first of two key inflation readings this week that likely will figure into the Federal Reserve's interest rate decision later in January.

A measure of wholesale prices increased less than expected in December, providing indication that pipeline inflation pressures eased to close the year though likely not enough to provoke another Federal Reserve interest rate cut anytime soon.

The producer price index rose just 0.2% on the month, less than the 0.4% increase in November and below the Dow Jones consensus estimate for 0.4%, according to a Bureau of Labor Statistics report Tuesday.

Excluding food and energy, the so-called core PPI was flat compared with the forecast for a 0.3% rise. Excluding food, energy and trade services, the measure rose just 0.1%. ... On an annual basis, headline PPI rose 3.3% for the full year, well ahead of the 1.1% increase in 2023.

Goods prices increased 0.6%, pushed by a 9.7% surge in gasoline prices. Upward moves in several food- and energy-related measures were offset by a 14.7% slide in prices for fresh and dry vegetables.

{snip}

Read more: https://www.cnbc.com/2025/01/14/ppi-december-2024-.html

[wjfox]

IMF warns Trump's plans could backfire on the US

17 January 2025, 14:01 GMT

The International Monetary Fund has warned that US economic policies under incoming president Donald Trump could hit the rest of the world and ultimately backfire on the US.

The IMF says a threatened wave of tariffs could make trade tensions worse, lower investment, hit market pricing, distort trade flows and disrupt supply chains.

Although tariffs, tax cuts and deregulation could boost the US economy in the short term, it could set the scene for an inflationary boom followed by a bust, it said.

This could weaken US Treasury bonds as a safe bet, it added.

The imminent arrival of Donald Trump in the White House dominates the section on risks in the IMF's twice yearly forecast for the world economy.

https://www.bbc.co.uk/news/articles/cglyynp44g4o

[weatheriscool]

Trump says he will follow through on Canada and Mexico tariffs and reveals date he expects them to start

Source: The Independent

Tuesday 21 January 2025 13:54 EST

Tariffs of 25 percent could hit goods from Mexico and Canada entering the U.S. as soon as next month, Donald Trump announced on Monday while signing executive orders, signaling the beginning of a potential trade war that could have major effects on the U.S. economy.

Trump claimed in the Oval Office that Mexico and Canada are “allowing vast numbers of people” and fentanyl to cross their borders into the U.S. “We’re thinking in terms of 25 percent on Mexico and Canada because they’re allowing vast numbers of people [into the U.S.],” Trump said, arguing both countries were allowing fentanyl to enter the U.S. as well.

The president said he thinks the tariffs will start on February 1. If implemented, the tariffs would impact major economic sectors, including the auto industry, oil production, and agriculture. Trump’s announcement makes good on a campaign trail threat from November to hit both countries with tariffs.

Officials in Canada and Mexico have suggested they could take retaliatory measures, while nonetheless urging Trump to change course.

Read more: https://www.the-independent.com/news/wo ... 83746.html

[weatheriscool]

Trump Says He Will Impose 10% Tariffs on Chinese Imports on Feb. 1
The president said the planned duties were a response to China’s failure to curb fentanyl exports.
By Alan Rappeport
Jan. 21, 2025, 7:49 p.m. ET

President Trump said on Tuesday that he intended to impose a 10 percent tariff on Chinese imports into the United States on Feb. 1, a decision that is sure to escalate trade tensions between the world’s largest economies.

Speaking at the White House, Mr. Trump said that the tariffs were in response to China’s role in America’s fentanyl crisis. Mr. Trump said that China was sending fentanyl to Canada and Mexico, from where it would be transported into the United States.

The tariff threat comes after Mr. Trump said on Monday that he planned to impose a 25 percent duty on imports from Canada and Mexico as punishment for allowing fentanyl and illegal immigrants to cross into the United States.

Those tariffs would come on top of levies that Mr. Trump imposed on more than $300 billion worth of Chinese imports during his first term. Those tariffs were kept in place by former President Joseph R. Biden Jr., who imposed additional levies on Chinese electric vehicles, solar cells, semiconductors and advanced batteries.

Mr. Trump’s pledge to hit China, Canada and Mexico with tariffs is expected to result in retaliatory action against U.S. industries. Economists have warned that a global trade war could cause inflation to rebound and blunt U.S. economic growth.

...

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WASHINGTON — With characteristic bravado, Donald Trump has vowed that if voters return him to the White House, “inflation will vanish completely.”

https://www.marketwatch.com/story/trump ... y-8b676f5d

[weatheriscool]

[weatheriscool]

White House Says China, Mexico, Canada Tariffs to Hit Feb. 1 Press secretary denies report that Trump would delay levies

Source: Bloomberg

By Justin Sink

President Donald Trump intends to move ahead with plans on Saturday to impose 25% tariffs on Mexico and Canada and a 10% levy on China, the White House said, denying a report that he planned to delay the implementation by a month.

“I saw that report, and it is false,” White House Press Secretary Karoline Leavitt told reporters on Friday during the press briefing. “I was just with the President in the Oval Office, and I can confirm that tomorrow the Feb. 1 deadline that President Trump put into place” remains, she added.

Trump has threatened the tariffs over what he says is a failure to crack down on the flow of undocumented migrants and illegal drugs across US borders.

Trump tariff decision has been closely anticipated by markets and business and political leaders who have scrutinized his every word and action for any indication on whether he would follow through on his threats or merely use them as a starting point for trade negotiations.

Snip...

Read more: https://www.bloomberg.com/news/articles ... t-saturday

[caltrek]

Study of 16 years of US-Canada Free Trade Agreement Finds that Workers Were Not Hurt by Freer Trade
January 30, 2025

Introduction:

(Eurekalert) n a new study amid current and at times heated debates over U.S.-Canada trade policy, researchers assessed the long-term effects of the 1989 Canada-U.S. Free Trade Agreement (FTA) on the Canadian labor market using data from the mid-1980s to the start of the 2000s. They found that workers were not harmed by a dramatic increase in trade between the two countries.

The study, by researchers at Carnegie Mellon University and the University of Toronto, is published in the Review of Economic Studies.

“The bilateral nature of the FTA allowed us to study the effects of both import competition and export expansion in response to a policy change,” explains Brian K. Kovak, professor of economics and public policy at Carnegie Mellon’s Heinz College, who coauthored the study. “Our findings have practical implications: Canadian workers are less disrupted when Canada trades with the United States than when it trades with China.”

Using longitudinal administrative data from Statistics Canada from 1984 to 2004, the study examined the labor market effects of increased export expansion and import competition in Canada. Researchers compared the career trajectories of workers initially employed in industries that were subsequently subjected to different Canadian and U.S. tariff concessions legislated by the FTA.

While the study found adverse effects of Canadian tariff cuts and favorable effects of U.S. cuts on Canadian workers, both effects were small and disappeared with time as workers quickly recovered lost earnings by transitioning to other firms, industries, and sectors.

Read more here: https://www.eurekalert.org/news-releases/1072239

[caltrek]

Trump’s Tariffs: Another Disaster for the Families Who’ve Lost Everything
by Michael Mechanic
February 1, 2025

Introduction:

(Mother Jones) President Donald Trump says he’ll impose punitive tariffs on America’s allies and rivals this weekend—25 percent on imported goods from Canada and Mexico and 10 percent on Chinese imports. We don’t yet know which industries he will exclude (Trump has mentioned oil and gas) or how the targeted countries will respond—but the expert consensus is that tariffs will drive up prices for American companies and, in turn, consumers.

That’s particularly unwelcome news for the Floridians and North Carolinians whose homes and businesses were damaged or destroyed by Hurricanes Milton and Helena, the thousands of Los Angelenos who lost everything in the recent fires, and any American community, now or in the near future, that is compelled to rebuild in the face of ever more frequent and destructive climate-change-driven disasters.

Trump’s tariffs will “fan the flames of the already challenging environment that Californians face in recovering from the LA fires,” says Ann Harrison, an economist at UC Berkeley’s Haas School of Business who specializes in international trade. “A tariff of 25 percent levied on foreign imports would likely be paid by domestic California businesses and residents consuming lumber, food, cement, plastics, and other necessities. If the tariffs are passed through to importers of these goods, then rebuilding homes could be much more expensive.”

The article goes on to further discuss imports of lumber, plastic, cement, gravel and crushed stone, bricks, and steel. Also discussed is the dependence upon immigrant labor in the construction industry.

Read more here: https://www.motherjones.com/politics/2 ... s-floods/

[weatheriscool]

[weatheriscool]

Dow futures drop 500 points after Trump hits Canada, Mexico and China with tariffs: Live updates

Source: CNBC

Stock futures tumbled Sunday night to kick off a new trading month as investors weighed new U.S. tariffs on goods from key trade partners and their potential impact on the economy and corporate profits.

Read more: https://www.cnbc.com/2025/02/02/stock-m ... dates.html

[weatheriscool]

[weatheriscool]

[weatheriscool]

U.S. economy added just 143,000 jobs in January but unemployment rate fell to 4%

Source: CNBC

Published Fri, Feb 7 2025 8:31 AM EST Updated 2 Min Ago

Job creation was weaker than expected in January, the Bureau of Labor Statistics reported Friday. Nonfarm payrolls rose by a seasonally adjusted 143,000 for the month, down from an upwardly revised 307,000 in December and below the 169,000 forecast from Dow Jones. The unemployment rate nudged lower to 4%.

The report also featured significant benchmark revisions to the 2024 totals that saw substantial downward changes to the previous payrolls level.



he revisions, which the BLS does each year, reduced the jobs count by 589,000 in the 12 months through March 2024. A preliminary adjustment back in August 2024 had indicated 818,000 fewer jobs.

The level of those reporting at work, as computed in the household survey, soared by 2.23 million, the product of annual adjustments for population and immigration in the country. The household survey happens separately from the establishment survey used to tally total jobs.

Read more: https://www.cnbc.com/2025/02/07/jobs-re ... -2025.html

[weatheriscool]

Trump to announce reciprocal tariffs as early as Friday, sources say

Source: Reuters "Exclusive"

WASHINGTON, Feb 7 (Reuters) - President Donald Trump told Republican lawmakers that he plans to announce reciprocal tariffs as early as Friday, three sources familiar with the plans told Reuters.

The move would fullfill a Trump campaign promise to impose tariffs on American imports equal to the rates that trading partners impose on American exports. It was not immediately clear which countries would be affected since details of the proposal were not known.

Trump told Republican lawmakers of his plans during budget discussions at the White House on Thursday, the sources said. Trump and top aides have said they plan to use higher tariffs on foreign imports to help pay for extending Trump's 2017 tax cuts. {emphasis added}

Read more: https://www.reuters.com/world/us/trump- ... 025-02-07/

[caltrek]

It is somewhat confusing to reconcile recent headlines with two Executive Orders recently published in the Federal Register. Here are links to the Executive Orders in question:

Regarding Cabada: https://www.federalregister.gov/documen ... rn-border

Regarding Mexico: https://www.federalregister.gov/documen ... rn-border

Both Executive Orders cite "the sustained influx of illegal aliens and illicit opioids and other drugs" as justification. It may be that there are other actions tied to more explicitly economic motivations and that these orders are not meant to stand alone.

[caltrek]

Dow futures drop 500 points after Trump hits Canada, Mexico and China with tariffs: Live updates

Source: CNBC

Stock futures tumbled Sunday night to kick off a new trading month as investors weighed new U.S. tariffs on goods from key trade partners and their potential impact on the economy and corporate profits.

Read more: https://www.cnbc.com/2025/02/02/stock-m ... dates.html

More on the stock market and Trump:

Trump's 2024 Election Victory: A Double-edged Sword for the U.S. Stock Market
February 10, 2025

Introduction:

(Eurekalert) Financial markets are reacting not just to Donald Trump's return to the White House but also to the unpredictability of this victory, according to a new study from the University of Surrey.  Investors must diversify their portfolios to mitigate risks associated with political volatility and to remain vigilant about the potential for abrupt market corrections.

A new study, published in Economics Letters, indicates that while there was an immediate surge in stock prices following Trump's election, this was quickly tempered by investor concerns over potential trade wars and international instability.

A group of international researchers from the University of Surrey, Macquarie University, Australia, The Memorial University of Newfoundland, Canada and Paris School of Business, analysed the stock market response to Trump's decisive 2024 electoral win using a robust event study methodology. This involved examining the performance of over 1,500 publicly traded companies on the Standard & Poors' 1500 index, focusing on their stock price movements around the election date. The team observed significant abnormal returns, particularly among small-cap firms and specific sectors such as energy, which capitalised on anticipated regulatory changes.

Dr Shaker Ahmed, lead author of the study and Lecturer in Finance at the University of Surrey, said:

"Our findings highlight the complex landscape that investors navigate in the wake of major political events. While there is optimism surrounding pro-business policies, underlying fears of geopolitical conflicts can lead to volatility. Investors must prepare for a reality where gains can swiftly turn into losses."

Read more of the Eurekalert article here: https://www.eurekalert.org/news-releases/1072963

To read the study results as published in Economics Letters:

https://www.sciencedirect.com/science/a ... 6525000072

[caltrek]

Nasdaq, S&P, Dow Tick Lower as Trump Signs New Tariffs Orders
February 11, 2025

Introduction:

(MSN) Wall Street's major averages ticked down on Tuesday as President Donald Trump signed an order imposing 25% tariffs on steel and aluminum.

Early on and the S&P 500 (SP500) was -0.1%, the Nasdaq Composite (COMP:IND) was -0.1%, and the Dow (DJI) was -0.1%.

The 10-year Treasury yield (US10Y) rose 4 basis points to 4.54%. The 2-year yield (US2Y) rose 1 basis point to 4.30%.

"The tariff news has continued to build over the last 24 hours, but risk assets got the week off to a solid start yesterday," Deutsche Bank's Jim Reid said.

Trump signed the executive orders after-hours Monday imposing 25% tariffs on all steel and aluminum imports into the U.S., canceling all exemptions and duty-free quotas for major suppliers Canada, Mexico, Brazil, and other countries.

Read more here: https://www.msn.com/en-us/money/market ... 98&ei=24

[caltrek]

Axios recently published an interesting map comparing (December 2023 to December 2024) regions of the country where the unemployment rate rose with regions where it dropped. The map shows a fairly close correlation between Blue states and a dropping unemployment rate and red states and a rising unemployment rate.

See map: https://www.axios.com/2025/02/11/unempl ... metro-map

[weatheriscool]

[caltrek]

Voters Were Right About the Economy. The Data Was Wrong.
by Eugene Ludwig
February 11, 2025

Extract:

(Politico) Take…unemployment. Known to experts as the U-3, the number misleads in several ways. First, it counts as employed the millions of people who are unwillingly under-employed — that is, people who, for example, work only a few hours each week while searching for a full-time job. Second, it does not take into account many Americans who have been so discouraged that they are no longer trying to get a job. Finally, the prevailing statistic does not account for the meagerness of any individual’s income. Thus you could be homeless on the streets, making an intermittent income and functionally incapable of keeping your family fed, and the government would still count you as “employed.”

I don’t believe those who went into this past election taking pride in the unemployment numbers understood that the near-record low unemployment figures — the figure was a mere 4.2 percent in November — counted homeless people doing occasional work as “employed.” But the implications are powerful. If you filter the statistic to include as unemployed people who can’t find anything but part-time work or who make a poverty wage (roughly $25,000), the percentage is actually 23.7 percent. In other words, nearly one of every four workers is functionally unemployed in America today…

Perhaps the most prominent issue of the 2024 campaign — inflation — tracks much the same story…
…the CPI…perceives reality through a very rosy looking glass. Those with modest incomes purchase only a fraction of the 80,000 goods the CPI tracks, spending a much greater share of their earnings on basics like groceries, health care and rent. And that, of course, affects the overall figure: If prices for eggs, insurance premiums and studio apartment leases rise at a faster clip than those of luxury goods and second homes, the CPI underestimates the impact of inflation on the bulk of Americans. That, of course, is exactly what has happened.
…
Our alternative indicator reveals that, since 2001, the cost of living for Americans with modest incomes has risen 35 percent faster than the CPI. Put another way: The resources required simply to maintain the same working-class lifestyle over the last two decades have risen much more dramatically than we’ve been led to believe.

The article also points out discrepancies in the measurement of the median income and GDP.

Read more here: https://www.politico.com/news/magazine ... -00203464