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  • What markets are watching after digesting the US jobs data | CNN Business

    What markets are watching after digesting the US jobs data | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    In an unusual coincidence, the US jobs report was released on a holiday Friday — meaning stock markets were closed when the closely-watched economic data came out.

    It was the first monthly payroll report since Silicon Valley Bank and Signature Bank collapsed. It also marked a full year of jobs data since the Federal Reserve began hiking interest rates in March 2022.

    While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient.

    Investors have had a long weekend to chew over the details of the report and will likely skip the typical gut-reaction to headline numbers.

    What happened: The US economy added 236,000 jobs in March, showing that hiring remained robust though the pace was slower than in previous months. The unemployment rate currently stands at 3.5%.

    Wages increased by 0.3% on the month and 4.2% from a year ago. The three-month wage growth average has dropped to 3.8%. That’s moving closer to what Fed policymakers “believe to be in line with stable wage and inflation expectations,” wrote Joseph Brusuelas, chief economist at RSM in a note.

    “That wage data tends to suggest that the risk of a wage price spiral is easing and that will create space in the near term for the Federal Reserve to engage in a strategic pause in its efforts to restore price stability,” he added.

    The March jobs report was the last before the Fed’s next policy meeting and announcement in early May. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out.

    At the same time Wall Street is beginning to see bad news as bad news. A slowing economy could mean a recession is forthcoming.

    Markets are still largely expecting the Fed to raise rates by another quarter point. So how will they react to Friday’s report?

    Before the Bell spoke with Michael Arone, State Street Global Advisors chief investment strategist, to find out.

    This interview has been edited for length and clarity.

    Before the Bell: How do you expect markets to react to this report on Monday?

    Michael Arone: I think that this has been a nice counterbalance to the weaker labor data earlier last week and all the recession fears. This data suggests that the economy is still in pretty good shape, 10-year Treasury yields increased on Friday indicating there’s less fear about an imminent recession.

    There’s this delicate balance between slower job growth and a weaker labor market without economic devastation. I think this report helps that.

    As it relates to the stock market, I would expect the cyclical sectors to do well — your industrials, your materials, your energy companies. If interest rates are rising, that’s going to weigh on growth stocks — technology and communication services sectors, for example. Less recession fears will mean investors won’t be as defensively positioned in classic staples like healthcare and utilities.

    Could this lead to a reverse in the current trend where tech companies are bolstering markets?

    Yes, exactly. It’s difficult to make too much out of any singular data point, but I think this report will hopefully lead to broader participation in the stock market. If those recession fears begin to abate somewhat, and investors recognize that recession isn’t imminent, there will be more investment.

    What else are investors looking at in this report?

    We’ve seen weakness in the interest rate sensitive parts of the market — areas that are typically the first to weaken as the economy slows down. So things like manufacturing, things like construction. That’s where the weakness in this jobs report is. And the services areas continue to remain strong. That’s where the shortage of qualified skilled workers remains. I think that you’re seeing continued job strength in those areas.

    What does this mean for this week’s inflation reports? It seems like the jobs report just pushed the tension forward.

    it did. I expect that inflation figures will continue to decelerate — or grow at a slower rate. But I do think that the sticky part of inflation continues to be on the wage front. And so I think, if anything, this helps alleviate some of those inflation pressures, but we’ll see how it flows through into the CPI report next week. And also the PPI report.

    Is the Federal Reserve addressing real structural changes to the labor market?

    The Fed was confused in February 2020 when we were in full employment and there was no inflation. They’re equally confused today, after raising rates from zero to 5%, that we haven’t had more job losses.

    I’m not sure why, but from my perspective, the Fed hasn’t taken into consideration the structural changes in the labor force, and they’re still confused by it. I think the risk here is that they’ll continue to focus on raising rates to stabilize prices, perhaps underestimating the kind of structural changes in the labor economy that haven’t resulted in the type of weakness that they’ve been anticipating. I think that’s a risk for the economy and markets.

    A few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry.

    After decades of thriving growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.

    Recent banking stress will likely add to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.

    Since then, things have gotten worse, CNN’s Julia Horowitz reports.

    In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. A bank run is what toppled Silicon Valley Bank last month, roiling financial markets and raising fears of a recession.

    “We’re watching it pretty closely,” said Michael Reynolds, vice president of investment strategy at Glenmede, a wealth manager. While he doesn’t expect office loans to become a problem for all banks, “one or two” institutions could find themselves “caught offside.”

    Signs of strain are increasing. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.

    High-profile defaults are making headlines. Earlier this year, a landlord owned by asset manager PIMCO defaulted on nearly $2 billion in debt for seven office buildings in San Francisco, New York City, Boston and Jersey City.

    Dig into Julia’s story here.

    Tech stocks led market losses in 2022, but seemed to rebound quickly at the start of this year. So as we enter earnings season, what should we expect from Big Tech?

    Daniel Ives, an analyst at Wedbush Securities, says that he has high hopes.

    “Tech stocks have held up very well so far in 2023 and comfortably outpaced the overall market as we believe the tech sector has become the new ‘safety trade’ in this overall uncertain market,” he wrote in a note on Sunday evening.

    Even the recent spate of layoffs in Big Tech has upside, he wrote.

    “Significant cost cutting underway in the Valley led by Meta, Microsoft, Amazon, Google and others, conservative guidance already given in the January earnings season ‘rip the band- aid off moment’, and tech fundamentals that are holding up in a shaky macro [environment] are setting up for a green light for tech stocks.”

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  • The Fed could easily drive Black unemployment much higher than the overall jobless rate | CNN Business

    The Fed could easily drive Black unemployment much higher than the overall jobless rate | CNN Business

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    New York
    CNN
     — 

    Millions of jobs could be on the chopping block this year, as the Federal Reserve continues its rate-hiking campaign to tame inflation. But the effects of that action likely won’t reverberate evenly across the economy.

    The Fed has seen some success: Inflation has cooled for eighth consecutive months, according to the February Consumer Price Index. The Producer Price Index shows a dramatic drop in wholesale prices in February. And the Fed’s favored inflation gauge, the Personal Consumption Expenditures price index, has also started to moderate.

    But the job market has proved to be a formidable force, humming steadily in the face of climbing rates meant to slow its growth. After adding more than half a million jobs in January, the US economy then added 311,000 jobs in February, with an unemployment rate of 3.6% — just above a half-century low — according to the Bureau of Labor Statistics.

    However, the jobless rate isn’t expected to be that low for long.

    At its most recent policy-making meeting, the Fed released projections for the year ahead that showed unemployment could jump to 4.5%, representing another 1.5 million job losses, by the end of the year.

    While that’s a small improvement from the central bank’s previous 4.6% jobless rate estimate, economists say it’s possible the unemployment rate could rise above the Fed’s expectations. Moreover, they say that historically disadvantaged groups could be disproportionately affected by the central bank’s stringent monetary policy.

    While some groups often sidelined in the job market have seen benefits from this hot job market — women have seen a faster pace of job gains than men in recent months, for example — others, including Black women and Latino men, have seen slower recoveries in jobless rates since the onset of the Covid pandemic.

    Recession fears gained traction last month when the collapse of Silicon Valley Bank sent markets wobbling, raising concerns about the economy’s ability to handle more stress. Goldman Sachs revised its estimate of the United States entering a recession over the next 12 months to a 35% chance, up from its estimate of a 25% chance before the banking sector turmoil.

    That’s of particular concern to certain demographic groups: Jobless rates for Black and Hispanic Americans often increase by more than those of their White counterparts during recessions, said Rakesh Kochhar, a senior researcher focusing on demographics and social trends at the Pew Research Center.

    History makes that discrepancy clear.

    A Pew Research Center report comparing two recessions in recent decades shows how Black and Hispanic Americans experience disproportionate effects on their jobless rates during periods of economic downturn. From the second quarter of 2007 to the second quarter of 2009, during the Great Recession, the unemployment rate rose 6.5 percentage points for Black Americans. The Hispanic unemployment rate climbed 6.3 percentage points. For White workers, it increased 4 percentage points.

    And from the first quarter of 1990 to the first quarter of 1991, the unemployment rate climbed 1.4 percentage points for Black Americans and 2.1 percentage points for Hispanic Americans. The White unemployment rate rose 1.3 percentage points.

    Economists say it’s hard to guess the trajectory of the unemployment rate this year, noting it could very well exceed the Fed’s estimate.

    “There’s just tons of momentum, and once you slow the economy enough to get the unemployment rate moving up, it’s very hard to sort of turn that cruise ship back around,” said Josh Bivens, research director and chief economist at the Economic Policy Institute.

    As such, the Fed’s tightening efforts could easily drive the Black unemployment rate much higher than the overall jobless rate, said William Spriggs, an economics professor at Howard University and chief economist to the AFL-CIO.

    “If the Fed continues to use unemployment as its measure of labor force slack, and thinks they want a 4.5% unemployment rate — to make that happen, the Fed would have to induce net job loss in the labor market,” Spriggs told CNN in an email. “If we go through two months of negative job growth, all bets are off. The Black unemployment rate will easily get to 9% in that scenario.”

    One other likely consequence of growing unemployment is slowing wage growth, Bivens said.

    Like rising unemployment, stunted wage growth tends to hit marginalized groups harder. A 2021 Economic Policy Institute report shows that a 1 percentage point increase in overall unemployment correlates with about 0.5% slower wage growth for White median hourly wages. Wage growth falls by roughly 0.8% for Black median hourly wages.

    “A lot of people have this idea that in a recession, if unemployment rises by a couple of percentage points, as long as you’re not one of those unlucky people to lose the job, you’ve dodged the bullet,” Bivens said. “And that’s not true at all.”

    Still, a robust labor market isn’t a permanent solution to bridging employment disparities, even if the Fed does keep rates lower, says Wendy Edelberg, director of the Hamilton Project and a senior fellow in economic studies at the Brookings Institution.

    The job market’s recent strength is unsustainable, she said. The US economy needs about 75,000 net job gains a month to keep stable and is currently adding about 350,000 net job gains a month on average, according to Edelberg.

    “[The Fed is] right to be confident that one of the things that’s going to have to happen to get inflation back down to a normal, stable level is to get job growth to a normal, sustainable level,” Edelberg said. “But if the Fed’s actions resulted in a slower labor market, then inflation stayed high — that would be a disaster.”

    The March jobs report from the Department of Labor, due to be released Friday at 8:30 a.m., is expected to show the US economy gained 240,000 positions last month. ADP’s private-sector payroll report, generally seen by investors as a proxy for the trajectory of Friday’s number, fell short of expectations, with just 145,000 jobs added. Economists had expected private hiring would rise by 200,000 positions last month.

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  • The US economy added 311,000 jobs in February, outpacing expectations | CNN Business

    The US economy added 311,000 jobs in February, outpacing expectations | CNN Business

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    Minneapolis
    CNN
     — 

    The US economy added 311,000 jobs in February, according to the latest monthly employment snapshot from the Bureau of Labor Statistics, released Friday.

    That’s a pullback from the blockbuster January jobs report, when a revised 504,000 positions were added, but shows the labor market is still emitting plenty of heat.

    The unemployment rate ticked up to 3.6% from 3.4%.

    February’s net job gains surpassed economists’ estimates for a more modest month, with only 205,000 to be added. Separately, downward revisions to December’s and January’s totals weren’t that drastic.

    While Friday’s report is a strong one, that’s actually bad news in the broader context of the Federal Reserve’s campaign to curb high inflation, said PNC Financial Services chief economist Gus Faucher.

    “It’s much hotter than the economy can run, and so this means the Fed is going to have to continue to hike interest rates,” he told CNN. “And that makes a recession more likely.”

    Barring a surprisingly low Consumer Price Index inflation report next week, Faucher said he expects the Fed to go forward with a half-point rate hike at its March 21-22 meeting, which would be a higher pace than the recent, more moderate quarter-point increase.

    The Fed has been battling for almost a year to slow the economy and crush the highest inflation in 40 years, but the labor market continues to defy those efforts.

    “Coming up on the one-year anniversary of the Fed’s first rate hike, we never thought we would see the economy churning out 311,000 more jobs this month,” said Chris Rupkey, chief economist of FwdBonds, in a statement. “The party is on and the labor market is having a blast. The economy clearly is not landing, it is soaring.”

    The monthly job gains remain well above pre-pandemic norms, when roughly 180,000 jobs were added per month between 2010 and 2019, BLS data shows. However, the labor market remains tight and imbalances continue to persist in the ongoing recovery efforts from the devastating pandemic.

    Labor turnover data released earlier this week for January showed that there were 1.9 job openings for every person looking for one. Fed Chair Jerome Powell has frequently highlighted how the labor market remains short of pre-pandemic growth projections by more than 3 million people.

    The pandemic accelerated expected demographic trends (the aging out of the massive Baby Boom generation) with increased retirements; people also dropped out of the workforce for care-related needs and health concerns such as long Covid; and there were hundreds of thousands of workers who died from Covid.

    February’s employment report showed a 0.1 percentage point increase in the labor force participation rate to 62.5% — the highest its been since April 2020. However, it remains below pre-pandemic levels of 63.4%.

    Additionally, there was some upward movement in the jobless rate, which increased 0.2 percentage points to 3.6%.

    “Contributing to upward pressure here, there were more people looking for work,”said Mark Hamrick, senior economic analyst at Bankrate.

    Industries with notable job gains included leisure and hospitality, retail trade, government and health care. After being crushed during the pandemic, the leisure and hospitality has been steadily adding back employees and trying to meet increased demand from consumers shifting their spending from goods to services.

    Average hourly earnings — a closely watched metric as the Fed seeks to evaluate the impact of rising wages on inflation — grew 0.2% month-on-month and were up 4.6% over the year before.

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  • Fact check: Republicans at CPAC make false claims about Biden, Zelensky, the FBI and children | CNN Politics

    Fact check: Republicans at CPAC make false claims about Biden, Zelensky, the FBI and children | CNN Politics

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    Washington
    CNN
     — 

    The Conservative Political Action Conference is underway in Maryland. And the members of Congress, former government officials and conservative personalities who spoke at the conference on Thursday and Friday made false claims about a variety of topics.

    Rep. Jim Jordan of Ohio uttered two false claims about President Joe Biden. Rep. Marjorie Taylor Greene of Georgia repeated a debunked claim about Ukrainian President Volodymyr Zelensky. Sen. Tommy Tuberville of Alabama used two inaccurate statistics as he lamented the state of the country. Former Trump White House official Steve Bannon repeated his regular lie about the 2020 election having been stolen from Trump, this time baselesly blaming Fox for Trump’s defeat.

    Rep. Kat Cammack of Florida incorrectly said a former Obama administration official had encouraged people to harass Supreme Court Justice Brett Kavanaugh. Rep. Ralph Norman of South Carolina inaccurately claimed Biden had laughed at a grieving mother and inaccurately insinuated that the FBI tipped off the media to its search of former President Donald Trump’s Florida residence. Two other speakers, Rep. Scott Perry of Pennsylvania and former Trump administration official Sebastian Gorka, inflated the number of deaths from fentanyl.

    And that’s not all. Here is a fact check of 13 false claims from the conference, which continues on Saturday.

    Marjorie Taylor Greene said the Republican Party has a duty to protect children. Listing supposed threats to children, she said, “Now whether it’s like Zelensky saying he wants our sons and daughters to go die in Ukraine…” Later in her speech, she said, “I will look at a camera and directly tell Zelensky: you’d better leave your hands off of our sons and daughters, because they’re not dying over there.”

    Facts First: Greene’s claim is false. Ukrainian President Volodymyr Zelensky didn’t say he wants American sons and daughters to fight or die for Ukraine. The false claim, which was debunked by CNN and others earlier in the week, is based on a viral video that clipped Zelensky’s comments out of context.

    19-second video of Zelensky goes viral. See what was edited out

    In reality, Zelensky predicted at a press conference in late February that if Ukraine loses the war against Russia because it does not receive sufficient support from elsewhere, Russia will proceed to enter North Atlantic Treaty Organization member countries in the Baltics (a region made up of Latvia, Lithuania and Estonia) that the US will be obligated to send troops to defend. Under the treaty that governs NATO, an attack on one member is considered an attack on all. Ukraine is not a NATO member, and Zelensky didn’t say Americans should fight there.

    Greene is one of the people who shared the out-of-context video on Twitter this week. You can read a full fact-check, with Zelensky’s complete quote, here.

    Right-wing commentator and former Trump White House chief strategist Steve Bannon criticized right-wing cable channel Fox at length for, he argued, being insufficiently supportive of Trump’s 2024 presidential campaign. Among other things, Bannon claimed that, on the night of the election in November 2020, “Fox News illegitimately called it for the opposition and not Donald J. Trump, of which our nation has never recovered.” Later, he said Trump is running again after “having it stolen, in broad daylight, of which they [Fox] participate in.”

    Facts First: This is nonsense. On election night in 2020, Fox accurately projected that Biden had won the state of Arizona. This projection did not change the outcome of the election; all of the votes are counted regardless of what media outlets have projected, and the counting showed that Biden won Arizona, and the election, fair and square. The 2020 election was not “stolen” from Trump.

    NATIONAL HARBOR, MARYLAND - MARCH 03: Former White House chief strategist for the Trump Administration Steve Bannon speaks during the annual Conservative Political Action Conference (CPAC) at the Gaylord National Resort Hotel And Convention Center on March 03, 2023 in National Harbor, Maryland. The annual conservative conference entered its second day of speakers including congressional members, media personalities and members of former President Donald Trump's administration. President Donald Trump will address the event on Saturday.  (Photo by Anna Moneymaker/Getty Images)

    Bannon has a harsh message for Fox News at CPAC

    Fox, like other major media outlets, did not project that Biden had won the presidency until four days later. Fox personalities went on to repeatedly promote lies that the election was stolen from Trump – even as they privately dismissed and mocked these false claims, according to court filings from a voting technology company that is suing Fox for defamation.

    Rep. Jim Jordan claimed that Biden, “on day one,” made “three key changes” to immigration policy. Jordan said one of those changes was this: “We’re not going to deport anyone who come.” He proceeded to argue that people knowing “we’re not going to get deported” was a reason they decided to migrate to the US under Biden.

    Facts First: Jordan inaccurately described the 100-day deportation pause that Biden attempted to impose immediately after he took office on January 20, 2021. The policy did not say the US wouldn’t deport “anyone who comes.” It explicitly did not apply to anyone who arrived in the country after the end of October 2020, meaning people who arrived under the Biden administration or in the last months of the Trump administration could still be deported.

    Biden did say during the 2020 Democratic primary that “no one, no one will be deported at all” in his first 100 days as president. But Jordan claimed that this was the policy Biden actually implemented on his first day in office; Biden’s actual first-day policy was considerably narrower.

    Biden’s attempted 100-day pause also did not apply to people who engaged in or were suspected of terrorism or espionage, were seen to pose a national security risk, had waived their right to remain in the US, or whom the acting director of Immigration and Customs Enforcement determined the law required to be removed.

    The pause was supposed to be in effect while the Department of Homeland Security conducted a review of immigration enforcement practices, but it was blocked by a federal judge shortly after it was announced.

    Rep. Ralph Norman strongly suggested the FBI had tipped off the media to its August search of Trump’s Mar-a-Lago home and resort in Florida for government documents in the former president’s possession – while concealing its subsequent document searches of properties connected to Biden.

    Norman said: “When I saw the raid at Mar-a-Lago – you know, the cameras, the FBI – and compare that to when they found Biden’s, all of the documents he had, where was the media, where was the FBI? They kept it quiet early on, didn’t let it out. The job of the next president is going to be getting rid of the insiders that are undermining this government, and you’ve gotta clean house.”

    Facts First: Norman’s narrative is false. The FBI did not tip off the media to its search of Mar-a-Lago; CNN reported the next day that the search “happened so quietly, so secretly, that it wasn’t caught on camera at all.” Rather, media outlets belatedly sent cameras to Mar-a-Lago because Peter Schorsch, publisher of the website Florida Politics, learned of the search from non-FBI sources and tweeted about it either after it was over or as it was just concluding, and because Trump himself made a public statement less than 20 minutes later confirming that a search had occurred. Schorsch told CNN on Thursday: “I can, unequivocally, state that the FBI was not one of my two sources which alerted me to the raid.”

    Brian Stelter, then CNN’s chief media correspondent, wrote in his article the day after the search: “By the time local TV news cameras showed up outside the club, there was almost nothing to see. Websites used file photos of the Florida resort since there were no dramatic shots of the search.”

    It’s true that the public didn’t find out until late January about the FBI’s November search of Biden’s former think tank office in Washington, which was conducted with the consent of Biden’s legal team. But the belated presence of journalists at Mar-a-Lago on the day of the Trump search in August is not evidence of a double standard.

    And it’s worth noting that media cameras were on the scene when Biden’s beach home in Delaware was searched by the FBI in February. News outlets had set up a media “pool” to make sure any search there was recorded.

    Sen. Tommy Tuberville, a former college and high school football coach, said, “Going into thousands of kids’ homes and talking to parents every year recruiting, half the kids in this country – I’m not talking about race, I’m just talking about – half the kids in this country have one or no parent. And it’s because of the attack on faith. People are losing faith because, for some reason, because the attack [on] God.”

    Facts First: Tuberville’s claim that half of American children don’t have two parents is incorrect. Official figures from the Census Bureau show that, in 2021, about 70% of US children under the age of 18 lived with two parents and about 65% lived with two married parents.

    About 22% of children lived with only a mother, about 5% with only a father, and about 3% with no parent. But the Census Bureau has explained that even children who are listed as living with only one parent may have a second parent; children are listed as living with only one parent if, for example, one parent is deployed overseas with the military or if their divorced parents share custody of them.

    It is true that the percentage of US children living in households with two parents has been declining for decades. Still, Tuberville’s statistic significantly exaggerated the current situation. His spokesperson told CNN on Thursday that the senator was speaking “anecdotally” from his personal experience meeting with families as a football coach.

    Tuberville claimed that today’s children are being “indoctrinated” in schools by “woke” ideology and critical race theory. He then said, “We don’t teach reading, writing and arithmetic anymore. You know, half the kids in this country, when they graduate – think about this: half the kids in this country, when they graduate, can’t read their diploma.”

    Facts First: This is false. While many Americans do struggle with reading, there is no basis for the claim that “half” of high school graduates can’t read a basic document like a diploma. “Mr. Tuberville does not know what he’s talking about at all,” said Patricia Edwards, a Michigan State University professor of language and literacy who is a past president of the International Literacy Association and the Literacy Research Association. Edwards said there is “no evidence” to support Tuberville’s claim. She also said that people who can’t read at all are highly unlikely to finish high school and that “sometimes politicians embellish information.”

    Tuberville could have accurately said that a significant number of American teenagers and adults have reading trouble, though there is no apparent basis for connecting these struggles with supposed “woke” indoctrination. The organization ProLiteracy pointed CNN to 2017 data that found 23% of Americans age 16 to 65 have “low” literacy skills in English. That’s not “half,” as ProLiteracy pointed out, and it includes people who didn’t graduate from high school and people who are able to read basic text but struggle with more complex literacy tasks.

    The Tuberville spokesperson said the senator was speaking informally after having been briefed on other statistics about Americans’ struggles with reading, like a report that half of adults can’t read a book written at an eighth-grade level.

    Rep. Jim Jordan claimed of Biden: “The president of the United States stood in front of Independence Hall, called half the country fascists.”

    Facts First: This is not true. Biden did not denounce even close to “half the country” in this 2022 speech at Independence Hall in Philadelphia. He made clear that he was speaking about a minority of Republicans.

    In the speech, in which he never used the word “fascists,” Biden warned that “MAGA Republicans” like Trump are “extreme,” “do not respect the Constitution” and “do not believe in the rule of law.” But he also emphasized that “not every Republican, not even the majority of Republicans, are MAGA Republicans.” In other words, he made clear that he was talking about far less than half of Americans.

    Trump earned fewer than 75 million votes in 2020 in a country of more than 258 million adults, so even a hypothetical criticism of every single Trump voter would not amount to criticism of “half the country.”

    Rep. Scott Perry claimed that “average citizens need to just at some point be willing to acknowledge and accept that every single facet of the federal government is weaponized against every single one of us.” Perry said moments later, “The government doesn’t have the right to tell you that you can’t buy a gas stove but that you must buy an electric vehicle.”

    Facts First: This is nonsense. The federal government has not told people that they can’t buy a gas stove or must buy an electric vehicle.

    The Biden administration has tried to encourage and incentivize the adoption of electric vehicles, but it has not tried to forbid the manufacture or purchase of traditional vehicles with internal combustion engines. Biden has set a goal of electric vehicles making up half of all new vehicles sold in the US by 2030.

    There was a January controversy about a Biden appointee to the United States Consumer Product Safety Commission, Richard Trumka Jr., saying that gas stoves pose a “hidden hazard,” as they emit air pollutants, and that “any option is on the table. Products that can’t be made safe can be banned.” But the commission as a whole has not shown support for a ban, and White House press secretary Karine Jean-Pierre said at a January press briefing: “The president does not support banning gas stoves. And the Consumer Product Safety Commission, which is independent, is not banning gas stoves.”

    Rep. Ralph Norman claimed that Biden had just laughed at a mother who lost two sons to fentanyl.

    “I don’t know whether y’all saw, I just saw it this morning: Biden laughing at the mother who had two sons – to die, and he’s basically laughing and saying the fentanyl came from the previous administration. Who cares where it came from? The fact is it’s here,” Norman said.

    Facts First: Norman’s claim is false. Biden did not laugh at the mother who lost her sons to fentanyl, the anti-abortion activist Rebecca Kiessling; in a somber tone, he called her “a poor mother who lost two kids to fentanyl.” Rather, he proceeded to laugh about how Republican Rep. Marjorie Taylor Greene had baselessly blamed the Biden administration for the young men’s deaths even though the tragedy happened in mid-2020, during the Trump administration. You can watch the video of Biden’s remarks here.

    Kiessling has demanded an apology from Biden. She is entitled to her criticism of Biden’s remarks and his chuckle – but the video clearly shows Norman was wrong when he claimed Biden was “laughing at the mother.”

    Rep. Kat Cammack told a story about the first hearing of the new Republican-led House select subcommittee on the supposed “weaponization” of the federal government. Cammack claimed she had asked a Democratic witness at this February hearing about his “incredibly vitriolic” Twitter feed in which, she claimed, he not only repeatedly criticized Supreme Court Justice Brett Kavanaugh but even went “so far as to encourage people to harass this Supreme Court justice.”

    Facts First: This story is false. The witness Cammack questioned in this February exchange at the subcommittee, former Obama administration deputy assistant attorney general Elliot Williams, did not encourage people to harass Kavanaugh. In fact, it’s not even true that Cammack accused him at the February hearing of having encouraged people to harass Kavanaugh. Rather, at the hearing, she merely claimed that Williams had tweeted numerous critical tweets about Kavanaugh but had been “unusually quiet” on Twitter after an alleged assassination attempt against the justice. Clearly, not tweeting about the incident is not the same thing as encouraging harassment.

    Williams, now a CNN legal analyst (he appeared at the subcommittee hearing in his personal capacity), said in a Thursday email that he had “no idea” what Cammack was looking at on his innocuous Twitter feed. He said: “I used to prosecute violent crimes, and clerked for two federal judges. Any suggestion that I’ve ever encouraged harassment of anyone – and particularly any official of the United States – is insulting and not based in reality.”

    Cammack’s spokesperson responded helpfully on Thursday to CNN’s initial queries about the story Cammack told at CPAC, explaining that she was referring to her February exchange with Williams. But the spokesperson stopped responding after CNN asked if Cammack was accurately describing this exchange with Williams and if they had any evidence of Williams actually having encouraged the harassment of Kavanaugh.

    Sen. John Kennedy of Louisiana boasted about the state of the country “when Republicans were in charge.” Among other claims about Trump’s tenure, he said that “in four years,” Republicans “delivered 3.5% unemployment” and “created 8 million new jobs.”

    Facts First: This is inaccurate in two ways. First, the economic numbers for the full “four years” of Trump’s tenure are much worse than these numbers Kennedy cited; Kennedy was actually referring to Trump’s first three years while ignoring the fourth, which was marred by the Covid-19 pandemic. Second, there weren’t “8 million new jobs” created even in Trump’s first three years.

    Kennedy could have correctly said there was a 3.5% unemployment rate after three years of the Trump administration, but not after four. The unemployment rate skyrocketed early in Trump’s fourth year, on account of the pandemic, before coming down again, and it was 6.3% when Trump left office in early 2021. (It fell to 3.4% this January under Biden, better than in any month under Trump.)

    And while the economy added about 6.7 million jobs under Trump before the pandemic-related crash of March and April 2020, that’s not the “8 million jobs” Kennedy claimed – and the economy ended up shedding millions of jobs in Trump’s fourth year. Over the full four years of Trump’s tenure, the economy netted a loss of about 2.7 million jobs.

    Lara Trump, Donald Trump’s daughter-in-law and an adviser to his 2020 campaign, claimed that the last time a CPAC crowd was gathered at this venue in Maryland, in February 2020, “We had the lowest unemployment in American history.” After making other boasts about Donald Trump’s presidency, she said, “But how quickly it all changed.” She added, “Under Joe Biden, America is crumbling.”

    Facts First: Lara Trump’s claim about February 2020 having “the lowest unemployment in American history” is false. The unemployment rate was 3.5% at the time – tied for the lowest since 1969, but not the all-time lowest on record, which was 2.5% in 1953. And while Lara Trump didn’t make an explicit claim about unemployment under Biden, it’s not true that things are worse today on this measure; again, the most recent unemployment rate, 3.4% for January 2023, is better than the rate at the time of CPAC’s 2020 conference or at any other time during Donald Trump’s presidency.

    Multiple speakers at CPAC decried the high number of fentanyl overdose deaths. But some of the speakers inflated that number while attacking Biden’s immigration policy.

    Sebastian Gorka, a former Trump administration official, claimed that “in the last 12 months in America, deaths by fentanyl poisoning totaled 110,000 Americans.” He blamed “Biden’s open border” for these deaths.

    Rep. Scott Perry claimed: “Meanwhile over on this side of the border, where there isn’t anybody, they’re running this fentanyl in; it’s killing 100,000 Americans – over 100,000 Americans – a year.”

    Facts First: It’s not true that there are more than 100,000 fentanyl deaths per year. That is the total number of deaths from all drug overdoses in the US; there were 106,699 such deaths in 2021. But the number of overdose deaths involving synthetic opioids other than methadone, primarily fentanyl, is smaller – 70,601 in 2021.

    Fentanyl-related overdoses are clearly a major problem for the country and by far the biggest single contributor to the broader overdose problem. Nonetheless, claims of “110,000” and “over 100,000” fentanyl deaths per year are significant exaggerations. And while the number of overdose deaths and fentanyl-related deaths increased under Biden in 2021, it was also troubling under Trump in 2020 – 91,799 total overdose deaths and 56,516 for synthetic opioids other than methadone.

    It’s also worth noting that fentanyl is largely smuggled in by US citizens through legal ports of entry rather than by migrants sneaking past other parts of the border. Contrary to frequent Republican claims, the border is not “open”; border officers have seized thousands of pounds of fentanyl under Biden.

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  • The US economy added a whopping 517,000 jobs in January | CNN Business

    The US economy added a whopping 517,000 jobs in January | CNN Business

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    Minneapolis
    CNN
     — 

    The US economy added an astonishing 517,000 jobs in January, showing that the labor market isn’t ready to cool down just yet.

    The unemployment rate fell to 3.4% from 3.5%, hitting a level not seen since May 1969 — two months before Neil Armstrong stepped on the moon — according to new data released Friday by the Bureau of Labor Statistics.

    Economists were expecting 185,000 jobs would be added last month, based on consensus estimates on Refinitiv.

    “With 517,000 new jobs added in January 2023 and the unemployment rate at 3.4%, this is a blockbuster report demonstrating that the labor market is more like a bullet train,” Becky Frankiewicz, president and chief commercial officer of ManpowerGroup, said Friday.

    The shockingly strong monthly jobs gain — a number that several economists cautioned was influenced by seasonal factors and is subject to future revisions — bucks a trend of five consecutive months of moderating job growth during the latter half of 2022.

    “The blowout 517,000 increase in total employment was almost certainly a function of seasonal noise and traditional churn in early-year job and wage environment and exaggerates what is already a robust trend in hiring,” Joe Brusuelas, principal and chief economist with RSM US, said in a statement.

    Nonetheless the juggernaut of a report may cause complications for the Federal Reserve, which has been trying to tame high inflation with higher interest rates, said Seema Shah, chief global strategist of Principal Asset Management.

    “Is [Fed Chair Jerome] Powell now wondering why he didn’t push back on the loosening in financial conditions?” Shah said in a statement. “It’s difficult to see how wage pressures can possibly soften sufficiently when jobs growth is as strong as this, and it’s even more difficult to see the Fed stop raising rates and entertain ideas of rate cuts when there is such explosive economic news coming in.”

    “The market is going to go through a roller coaster ride as it tries to decide if this is good or bad news. For now, though, looks like the US economy is doing absolutely fine,” she said.

    Still, the report also showed that wage growth moderated on an annual basis: Average hourly earnings fell 0.4 percentage points to 4.4% year over year. Monthly wage gains held steady at 0.3%.

    “It’s quite remarkable to see such a realignment of the employment picture coinciding with an easing of wage pressure,” Mark Hamrick, senior economic analyst for Bankrate, said in an interview. “I think that might be part of this report that could help keep blood pressures down among Federal Reserve officials in the near term.”

    Additionally, average weekly hours jumped to 34.7 hours from 34.3, and employment in temporary help services rebounded after two months of declines, indicating further demand for labor, noted Julia Pollak, chief economist at ZipRecruiter.

    The report also showed an increase in the closely watched labor force participation rate to 62.4% from 62.3%. However, the increase in the share of people working or looking to work was a function of the BLS’ annual benchmark revisions to its household survey, one of two surveys that factor in to the monthly jobs report, noted PNC chief economist Gus Faucher.

    Had it not been for the revisions, that number would have been unchanged at 62.3%, he added.

    “The labor market is structurally tighter post-pandemic,” he said.

    Every January, the BLS makes revisions on its employment data to reflect updated population estimates and other factors.

    “On net, you saw stronger hiring in 2022 than what was initially reported,” said Sarah House, chief economist with Wells Fargo, told CNN.

    Average monthly job growth in 2022 was revised up from an average of 375,000 per month to 401,000, she said.

    Seasonality questions aside, other trends do align to support a strong January 2023 jobs report, Bankrate’s Hamrick said.

    “When you have a number of things lining up, almost like a crime scene investigation, it tends to lend some credibility to that question of believability,” he said of the surprising half-a-million-plus job gains. “What are the things that are lining up? The continued remarkably low level of jobless claims, the rise in job openings, the increase in labor force participation.”

    The gains were also widespread across industries, with job growth led by leisure and hospitality, professional and business services, and health care, according to the BLS report.

    Industries that shed jobs last month included motor vehicles and parts (down 6,500 jobs), utilities (down 700 jobs) and information (down 5,000 jobs).

    In recent months, mass layoff announcements — especially from Big Tech — had spurred concern that the cutbacks were a harbinger of broader cutbacks to come.

    That doesn’t appear to be the case, considering jobless claims have remained historically low, job openings haven’t slipped and job gains remain strong, said Giacomo Santangelo, economist at Monster.

    “The news is talking about big names laying off, but we don’t really hear what happens at small firms with less than 200 employees,” he said. “What we’re seeing at Monster is a lot of firms, a majority of firms, are looking to hire.”

    The glut of available jobs — there are 1.9 open positions for every one job seeker — coupled with skills that are in high demand mean that workers are likely finding jobs quickly, he said. Additionally, those laid off by large technology firms likely received generous severance packages, so not all are filing for unemployment benefits.

    Friday’s report showed that the median duration of unemployment was 9.1 weeks, just a smidge above the pre-pandemic level of 8.9 weeks in February 2020.

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  • Jobs report to give further clues about where economy is headed | CNN Business

    Jobs report to give further clues about where economy is headed | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    The Federal Reserve is going to raise interest rates again on Wednesday. But will it be another half-point hike or just a quarter-point increase? And what about the rest of the year?

    The Fed’s actions beyond this week’s meeting will depend primarily on whether inflation is truly slowing. Investors will get another clue when the January jobs report is released on Friday.

    Economists predict that 185,000 jobs were added last month, a slowdown from the gain of 223,000 jobs in December and 263,000 in November. A further deceleration in the labor market would likely please the Fed, as it would show that last year’s rate hikes are successfully taking some air out of the economy.

    The Fed knows it’s in a tough situation. Inflation pressures are partly fueled by wage gains for workers. In an environment where the unemployment rate is at a half-century low of 3.5%, employees have been able to command big increases in pay to keep up with rising prices of consumer goods and services.

    Along those lines, average hourly earnings, a measure of wages that is also part of the monthly jobs report, are expected to increase 4.3% year-over year. That’s down from 4.6% in December and 5.1% in November.

    As wage growth cools, so do price increases. The Fed’s favorite measure of inflation – the Personal Consumption Price Index or PCE – rose “just” 5% over the past 12 months through last December, compared to a 5.5% annual increase in November.

    That is still uncomfortably high, but the trend is moving in the right direction.

    The problem for the Fed, though, is that it may need to keep raising interest rates until there is further evidence that the labor market is cooling off enough to push the rate of inflation even lower.

    Several other job market indicators continue to show that the US economy is in no serious danger of a recession just yet. The number of people filing for weekly jobless claims dipped last week to 186,000, a nine-month low. Investors will get the latest weekly initial claims numbers on Thursday.

    The market will also be closely watching reports about private-sector job growth from payroll processor ADP and the Job Openings and Labor Turnover Survey (JOLTS) from the Department of Labor this week. The last JOLTS report showed that more jobs were available than expected in November.

    Still, some expect that wage growth should continue to fall, which should take pressure off the Fed somewhat.

    “Wage growth has been on a slowing trajectory, and we suspect that softer wage growth will be a trend in 2023 as jobs available contract,” said Tony Welch, chief investment officer at SignatureFD, a wealth management firm, in a report.

    Not everyone agrees with that assessment. Organized labor has been winning bigger pay increases lately in the transportation industry. And more workers at tech and retail giants have been unionizing as of late.

    “Workers will be loath to relinquish the bargaining power they perceive to have gained over the past year,” said Jason Vaillancourt, global macro strategist at Putnam, in a report.

    Vaillancourt also pointed out that many consumers are still flush with cash that they saved up during the early stages of the pandemic. That could mean that inflation isn’t going away anytime soon.

    And even though the pace of jobs gains may be slowing, it’s not as if economists are starting to predict monthly job losses like the US has had in previous recessions.

    “Combine a strong labor market with a still substantial reserve of excess savings, and you have all the components in place to keep the Fed up at night,” Vaillancourt said.

    So as long as hopes for an economic “soft landing” persist, the Fed will have to keep worrying that inflation is too high. That increases the chances the Fed could go too far with rate hikes and ultimately lead to a recession.

    Wall Street is clearly buying into the “soft landing” argument. Just look at how well tech stocks have done so far this year, despite a series of high-profile layoff announcements from top Silicon Valley companies in the past few months.

    The Nasdaq is up 11% so far in January, putting it on track for its best monthly performance since July.

    Some argue that more tech layoffs won’t be a problem. Investors seem to be (somewhat perversely) taking the view that companies cutting costs is a good thing for profits and that revenue likely won’t be impacted in a negative way because consumers are still spending.

    “A theme that can’t go unnoticed this month is how traders are rewarding firms for cutting jobs. With corporate layoffs making headlines each evening, you might think the consumer is strained. Maybe not so much. It turns out that demand is decent,” said Frank Newman, portfolio manager at Ally Invest, in a report.

    But a continuation of the Nasdaq’s surge may depend a lot on how well a quartet of tech leaders do when they report fourth quarter earnings next week: Facebook and Instagram owner Meta Platforms, Apple

    (AAPL)
    , Google owner Alphabet

    (GOOGL)
    and Amazon

    (AMZN)
    .

    “A set of much weaker-than-expected reports from these firms could dent the market’s strong start to 2023,” said Daniel Berkowitz, senior investment officer for investment manager Prudent Management Associates, in a report.

    So far, tech earnings season is not off to an inspiring start, with Microsoft

    (MSFT)
    , Intel

    (INTC)
    and IBM

    (IBM)
    all reporting weak results. But it’s important to note that that trio is part of the “old tech” guard while Apple, Amazon, Alphabet and Meta all have more rapidly growing businesses.

    Tesla

    (TSLA)
    reported strong results last week, which could be a sign of good things to come from other more dynamic tech companies.

    Monday: IMF releases world outlook; earnings from Philips

    (PHG)
    , GE Healthcare, Franklin Resources

    (BEN)
    , SoFi, Ryanair

    (RYAAY)
    , Whirlpool

    (WHR)
    and Principal Financial

    (PFG)

    Tuesday: China official PMI; Europe GDP; US employment cost index; US consumer confidence; earnings from Exxon Mobil

    (XOM)
    , Samsung

    (SSNLF)
    , GM

    (GM)
    , Phillips 66

    (PSX)
    , Marathon Petroleum

    (MPC)
    , UPS

    (UPS)
    , Pfizer

    (PFE)
    , Sysco

    (SYY)
    , Caterpillar

    (CAT)
    , UBS

    (UBS)
    , McDonald’s

    (MCD)
    , Spotify

    (SPOT)
    , Mondelez

    (MDLZ)
    , Amgen

    (AMGN)
    , AMD

    (AMD)
    , Electronic Arts

    (EA)
    , Snap

    (SNAP)
    and Match

    (MTCH)

    Wednesday: Fed meeting; US ADP private sector jobs; US JOLTS; China Caixin PMI; Europe inflation; earnings from AmerisourceBergen

    (ABC)
    , Humana

    (HUM)
    , T-Mobile

    (TMUS)
    , Novartis

    (NVS)
    , Altria

    (MO)
    , Peloton

    (PTON)
    , Meta Platforms, McKesson

    (MCK)
    , MetLife

    (MET)
    and AllState

    (ALL)

    Thursday: US weekly jobless claims; US productivity; BOE meeting; ECB meting; Germany trade data; earnings from Cardinal Health

    (CAH)
    , ConocoPhillips

    (COP)
    , Merck

    (MRK)
    , Bristol-Myers

    (BMY)
    , Honeywell

    (HON)
    , Eli Lilly

    (LLY)
    , Stanley Black & Decker

    (SWK)
    , Hershey

    (HSY)
    , Sirius XM

    (SIRI)
    , Penn Entertainment

    (PENN)
    , Ferrari

    (RACE)
    , Harley-Davidso

    (HOG)
    n, Apple, Amazon, Alphabet, Ford

    (F)
    , Qualcomm

    (QCOM)
    , Starbucks

    (SBUX)
    , Gilead Sciences

    (GILD)
    , Hartford Financial

    (HIG)
    , Clorox

    (CLX)
    and WWE

    (WWE)

    Friday: US jobs report; US ISM non-manufacturing (services) index; earnings from Cigna

    (CI)
    , Sanofi

    (SNY)
    , LyondellBasell

    (LYB)
    and Regeneron

    (REGN)

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  • America capped off an extraordinary year for job growth, adding 223,000 positions in December | CNN Business

    America capped off an extraordinary year for job growth, adding 223,000 positions in December | CNN Business

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    Minneapolis
    CNN
     — 

    The US economy added 223,000 jobs in December, according to the monthly employment report from the Bureau of Labor Statistics, capping a year of extraordinary job growth and marking the second-best year for the labor market in records that go back to 1939.

    The unemployment rate fell back to a record low of 3.5% from a revised 3.6% in November.

    Economists were expecting 200,000 job gains for the last month of the year, according to Refinitiv. December’s job total is lower than the downwardly revised 256,000 jobs added in November.

    Including last month’s gains, which are subject to revision, the economy added about 4.5 million jobs in 2022. That’s the second-highest-ever total, after the 6.7 million jobs added in 2021 — a boomerang from 2020’s 9.3 million job losses.

    The labor market slowed in 2022, compared to the previous year’s tear. December’s jobs total represents the lowest monthly gains in two years.

    Those latest gains come following months of jumbo interest rate increases from the Federal Reserve in its attempt to cool off the economy after inflation last year hit its highest level since the 1980s. Those efforts have, so far, remained mostly elusive.

    That means the Fed is entering 2023 looking for a considerably softer and looser labor market — notably, increased labor participation, a better alignment of job seekers to open positions, and lower levels of wage growth.

    “This is about the best report one could hope for, given a still very hot US labor market,” said Joe Brusuelas, principal and chief economist for RSM US.

    Wall Street responded positively to Friday’s jobs data, with the Dow rising by almost 500 points by mid-morning — mostly a reaction to the slower pace of wage growth. Average hourly earnings increased 0.3% over the previous month and 4.6% annually. That’s compared to 0.4% month-on-month growth in November and 4.8% annual growth.

    The December report showed that the labor force participation rate, an estimation of the active workforce and people looking for work, ticked up to 62.3% from 62.2%.

    Labor force participation rates have been on a decline — largely due to demographic changes and aging Baby Boomers — since hitting a high of 67.3% in early 2000, and had fallen to 63.3% in the month before the onset of the pandemic. The participation rate has not returned to pre-pandemic levels, vexing economists and the Fed, while also contributing to an imbalance of worker supply and demand.

    “The labor market is moving in the right direction for the Federal Reserve, according to the December employment report, but is not there yet,” Gus Faucher, senior economist for PNC Financial services said in a statement. “Job growth is slowing to a more sustainable pace, and wage growth is softening as demand in the job market slackens somewhat.”

    However, with job growth well above pre-pandemic levels, when job gains averaged 164,000 in 2019, and the unemployment rate returning to a 50-year low, there is little indication that there will be enough of a boost in the labor force to help cool off the job market, he said.

    Some of the largest monthly gains were in industries such as leisure and hospitality, health care, and accommodation and food services, which all were hit hard during the pandemic. There were also notable monthly job losses in technology and interest-rate-sensitive sectors that surged during the pandemic and are now rebalancing as consumers shift spending toward services.

    Industries such as information, finance and professional and business services, shed jobs between November and December.

    The losses seen in areas such as professional and business services are likely an effect of the waves of mass layoffs hitting the tech industry, said Ken Kim, a senior economist at KPMG.

    “We are seeing a little bit of spread to other areas,” he said.

    In addition to Friday’s strong jobs numbers, several other pieces of jobs data released this week continue to reflect a healthy labor market. Wednesday’s Job Openings and Labor Turnover Survey (JOLTS) report showed that the number of available jobs remained steady at 10.5 million in November. It also showed that quits, layoffs and hires didn’t really show any major signs of cooling that month.

    ADP’s private-sector employment report on Thursday also showed a robust labor market, with 235,000 jobs added in the private sector during December, well exceeding expectations of 150,000.

    And Thursday’s weekly jobless claims fell by 21,000 to 204,000 for the week ending November 26, while continuing claims decreased to 1.69 million from 1.72 million to 1.61 million.

    —CNN’s Matt Egan contributed to this report.

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  • US job openings totaled 10.5 million in November, more than expected | CNN Business

    US job openings totaled 10.5 million in November, more than expected | CNN Business

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    Minneapolis
    CNN
     — 

    The number of available jobs in the United States totaled 10.46 million in November, according to data released Wednesday by the Department of Labor.

    That’s more than the 10 million total job openings that economists were expecting, according to Refinitiv, and slightly lower than the upwardly revised October total of 10.51 million.

    “The US labor market remains on fire,” Nick Bunker, head of economic research for Indeed Hiring Lab, said in a statement about the latest Job Openings and Labor Turnover Survey, or JOLTS. “The flames may have receded a bit from the highs of the initial reopening of the economy, but demand for workers remains robust and workers are seizing new opportunities.”

    There were still about 1.7 job openings for each job seeker in November, unchanged from October, according to data from the Bureau of Labor Statistics. The Federal Reserve closely monitors this ratio, since tightness in the labor market means employees have greater leverage to seek higher wages, which in turn drives up inflation.

    The robust number of job openings remains “a testament to the resilience of demand for labor on Main Street, even as job openings tumbled on Wall Street,” said Julia Pollak, chief economist with ZipRecruiter, in a tweet posted shortly after the report was released.

    Job hiring inched down to 6.06 million in November from 6.11 million in October, according to the report. Layoffs fell to 1.35 million from 1.45 million, and the number of people quitting their job increased to 4.17 million from 4.05 million.

    “The Great Resignation is far from over — quits surged in November, to 4.2 million,” Pollak said. “They have now been above 4 million for 18 straight months, after coming in at 3.4 million before the pandemic and averaging 2.6 million in the prior years.”

    Although openings came in above expectations, the JOLTS report likely won’t spur a dramatic change in course from the Fed, economists for labor market analytics company Lightcast said during a webcast Wednesday morning.

    “This report shows more positive signs for the economy than originally expected,” said Bledi Taska, Lightcast’s chief economist. “This was a very surprising report, but in some ways that’s positive for the economy overall. This report moves us from cautious to cautiously optimistic. I don’t expect to have to use the word recession any time soon.”

    Labor turnover activity this month will provide a good window of where the labor market may be heading, Taska said, adding that he would expect layoff activity to rise but not to a point of where it would indicate a serious recession was taking hold.

    The data comes ahead of the government’s closely watched monthly jobs report, which is set to be released on Friday and is expected to show that 200,000 jobs were added to the US economy in December.

    While that number is slightly lower than in previous months, it caps off an unusually strong year for the labor market — all the more so, given the Fed’s efforts to slow the economy in order to rein in demand and inflation.

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  • Made in America is back, leaving US factories scrambling to find workers | CNN Business

    Made in America is back, leaving US factories scrambling to find workers | CNN Business

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    New York
    CNN Business
     — 

    US factories are humming, and manufacturers are scrambling to find workers as the pace of hiring hits levels not seen in decades.

    Friday’s September jobs report showed US manufacturers added another 22,000 workers in September, increasing employment in the sector by nearly 500,000 over the course of the last 12 months.

    The nearly 13 million workers employed in US factories make up the industry’s largest workforce since the Great Recession caused employment in the sector to plunge more than a dozen years ago. Since April, manufacturing employment has been growing at about a 4% annual rate, the fastest sustained pace of growth since 1984, when the sector had more than twice as large a share of US jobs.

    And employers say they now are scrambling to fill even more jobs. The sector has had about 800,000 openings for most of the last year, despite the hiring binge, according to the Labor Department’s report.

    With supply chains causing problems throughout the global economy, many US companies that depended on overseas suppliers have been shifting their focus to sources of parts and goods much closer to home.

    “It was taking months for parts to not only get manufactured but come across and they decided they were willing to pay US manufacturing pricing to get that much faster,” said Hayden Jennison, production manager for Jennison Corporation, a Carnegie, Pennsylvania, company that makes everything from fire fighting equipment to construction machinery. He said there’s enough demand for his goods to staff an entire additional shift at the factory. But even though he’s paying $20 to $30 an hour he can’t find the workers he needs.

    “Hiring has been a problem since 2020,” Jennison said. “Hiring experienced candidates that understand the industry, and understand what they’re doing, has been very difficult.”

    Typically factory jobs and output take a hit during economic downturns, as they did during the Great Recession. But even with fears of a recession rising now, industry experts don’t expect factory jobs to default to their familiar boom-to-bust cycle this time.

    “I think we’re in uncharted territory,” said Jay Timmons, CEO of the National Association of Manufacturers. “For every 100 jobs openings in the sector we only have 60 people who are looking. I think it’ll take quite a while to fill that pipeline.”

    Timmons said that pay in the sector is up 5% over the course of the last year, and he expects it to keep rising as manufacturers scramble for skilled labor.

    Experts say one of the biggest problems manufacturers face in attracting workers is their perception of the nature of the job.

    “We often take a look at the images of manufacturing and we see the sparks flying and a welding environment and perhaps it’s a little bit dingy, dark. But by and large our manufacturing jobs today are high tech,” said Eric Esoda, CEO of a not-for-profit providing consulting and training services to small- and mid-size manufacturers in Northeast Pennsylvania.

    One group employers are looking to for more help: women. Manufacturing remains a male-dominated industry, with only 30% of hourly factory jobs held by women, according to NAM. But that’s up from 27% only two years ago, and the Manufacturing Institute, an education and workforce development arm of NAM, has various programs aimed at raising the share of women workers on factory floors to 35% by 2030.

    Today less than 10% of private sector jobs are in manufacturing, compared to more than 40% at the end of World War II. But it is still a key sector of the economy, one that pays much better than many others. The Labor Department reports the average weekly wage for manufacturing jobs is $1,250, or $65,000 annually — 11% more than private sector jobs overall, and 81% more than retail jobs.

    Correction: An earlier version of this story misstated Hayden Jennison’s job title.

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  • White-collar workers are feeling the brunt of the Fed’s rate hikes. Here’s why | CNN Business

    White-collar workers are feeling the brunt of the Fed’s rate hikes. Here’s why | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN Business
     — 

    September’s hotly anticipated jobs data ended up cooling markets on Friday. Stocks fell sharply as investors evaluated the report, which showed more jobs than expected were added to the US economy and indicated that more pain-inflicting interest rate hikes from the Federal Reserve lie ahead.

    But a breakdown of the numbers shows that the Fed’s plans to weaken the labor market to fight persistent inflation may already be working, just not for everybody.

    White-collar office workers appear to be feeling the brunt of the Fed’s actions: The financial and business sector saw a large decline in employment last month. Legal and advertising services also experienced drops. Service and construction workers, meanwhile, are still thriving.

    What’s happening: The US economy added 263,000 jobs in September, higher than analyst estimates of 250,000. The unemployment rate came in at 3.5%, down from 3.7% in August.

    Leading the gain in jobs was the leisure and hospitality industry, which added 83,000 jobs in September — and employment in food services and drinking places made up 60,000 of those jobs alone. Manufacturing and construction also came in hot, adding 22,000 and 19,000 jobs, respectively.

    The largest non-governmental losses in jobs came from the financial industry, which shed 8,000 between August and September. Large banks hire in cycles, extending offers to recent graduates in the early fall months. That makes this September’s drop particularly significant.

    Business support services — such as telemarketing, accounting and administrative and clerical jobs — are also bleeding jobs. The sector lost 12,000 in September. Meanwhile, legal services lost 5,000 jobs, and advertising services also dropped 5,000 jobs.

    What it means: The Federal Reserve’s hawkish policy appears to be cooling certain parts of the economy, but not others. Finance workers are likely beginning to worry as their industry depends on stock and lending markets which have been particularly hard hit by Fed actions.

    Friday’s numbers indicate that we’re beginning to see that impact in the employment data.

    What remains to be seen is whether the Fed can cool the economy just by loosening employment in white-collar industries or if these losses will trickle down to other industries, hurting lower-income workers.

    Coming up: Earnings season begins in earnest this week with big banks like JPMorgan, Citigroup

    (C)
    , Morgan Stanley

    (MS)
    and BlackRock

    (BLK)
    reporting. Investors will be watching closely for any guidance on hiring and layoff plans.

    Two key inflation indicators, PPI and CPI are also set to be released. Expect markets to react poorly if inflation comes in hot.

    A panel of top US economists just released its economic outlook for the next year, and it’s not great.

    The panel of 45 forecasters, led by the National Association for Business Economics (NABE), said they expected slower growth, higher inflation, higher interest rates, and weakening employment in both 2022 and 2023 than they previously expected.

    Most of the worries come down to the Federal Reserve’s interest rate policy.

    “More than three-quarters of respondents believe the odds are 50-50 or less that the economy will achieve a ‘soft landing’,” said NABE Vice President Julia Coronado. “More than half the panelists indicate that the greatest downside risk to the U.S. economic outlook is too much monetary tightness.”

    NABE panelists downgraded their median forecast for real GDP for the fourth quarter of 2022 to a 0.1% increase, compared to a 1.8% increase in the May 2022 survey. The vast majority of respondents placed more than a 25% probability of a recession occurring in 2023, with the most likely start date in the first quarter.

    The latest report comes as a growing number of economists are predicting that recession is imminent. Former US Treasury Secretary Larry Summers told CNN on Thursday that it’s “more likely than not” the US will enter a recession, calling it a consequence of the “excesses the economy has been through.”

    Friday’s jobs report showed that the share of workers telecommuting or working from home because of the pandemic ticked lower — falling to just 5.2% in September from 6.5% in August.

    Fully remote work in the United States, which many predicted would remain the norm long after the pandemic, appears to be edging away, especially as the job market loosens for white collar workers and employees have less leverage.

    Last week, a KPMG survey of US-based CEOs found that two-thirds believed in-office work would be the norm within the next three years.

    Still, it may not be enough to help an ailing commercial real estate market, where the outlook is dire. New York City office properties declined by nearly 45% in value in 2020 and are forecast to remain 39% below their pre-pandemic levels long-term as hybrid policies continue, according to a recent study from the National Bureau of Economic Research.

    Looking forward: The Bureau of Labor Statistics has noted that while hybrid work may still be popular, Covid-19 is no longer fueling work from home trends. The October report will rephrase its telework questions to remove references to the pandemic.

    Since May 2020, each jobs report has asked: “At any time in the last four weeks, did you telework or work at home for pay because of the Coronavirus pandemic?

    In May 2020, 35.4% answered yes.

    Starting next month, the question will be revised. “At any time in the last week did you telework or work at home for pay?” it will ask, limiting the timeline and eliminating any reference to the pandemic.

    The US bond market is closed for Columbus Day/Indigenous Peoples’ Day.

    Coming later this week:

    ▸ Third quarter earnings season begins. Expect reports from big banks like JPMorgan Chase

    (JPM)
    , Wells Fargo

    (WFC)
    , Citigroup

    (C)
    , Morgan Stanley

    (MS)
    , PNC

    (PNC)
    and US Bancorp

    (USB)
    and consumer staples like Pepsi

    (PEP)
    , Walgreen

    (WBA)
    s and Domino’s

    (DMPZF)

    ▸ CPI and PPI, two closely watched measures of inflation in the US are also due to be released. 

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  • Opinion: The Fed doesn’t have a choice anymore. Get ready for a recession | CNN Business

    Opinion: The Fed doesn’t have a choice anymore. Get ready for a recession | CNN Business

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    Editor’s Note: Gad Levanon is the chief economist at the Burning Glass Institute. He’s the former head of The Conference Board’s Labor Market Institute. The opinions expressed in this commentary are his own.

    To many economists and analysts, the US economy has represented a paradox this year. On the one hand, GDP growth has slowed significantly, and some argue, even entered a recession. On the other hand, overall employment growth has been much stronger than normal.

    While GDP declined at an annualized rate of 1.1% in the first half of 2022, the US economy added 2.3 million jobs in the last six months, far more than in any other six-month period in the 20 years prior to the pandemic.

    This tight labor market – and the rapid wage growth it has spurred – is causing inflation to become more entrenched. The Consumer Price Index, which measures a basket of goods and services, was 8.3% year-over-year in August. That’s lower than the 40-year high of 9.1% in June, but still painfully high. To address it, the Federal Reserve is likely to drive the economy into a recession in 2023, crushing continued job growth.

    Why has employment growth remained so strong? First, the US economy is holding on better than many expected. The Atlanta Fed’s GDPNow estimate for real GDP growth in the third quarter of 2022 is 2.3%, suggesting that while the economy is now growing much more slowly than it did last year, we are still not in a recession. When the demand for goods and services strengthens, so does the demand for workers producing these goods and services.

    Second, despite the slowing of the economy and the growing fears of recession, layoffs are still historically low. Initial claims for unemployment insurance, an indicator highly correlated with layoffs, were 219,000 for the week ended October 1 – higher than the week prior, but still one of the lowest readings in recent decades. After years of increasingly traumatic labor shortages, many employers are reluctant to significantly reduce the number of workers even as their businesses are slowing. That’s because companies are worried that they will have trouble recruiting new workers when they start expanding again.

    Third, many industries are growing faster than normal because they are still recovering from the pandemic. Convention and trade show organizers, car rental companies, nursing homes and child day care services, among others, are all growing fast because they are still well below pre-pandemic employment levels.

    Fourth, just as some industries are growing because they are still catching up, others are experiencing high growth as they adjust to a new normal of higher demand. Demand for data processing and hosting services, semiconductor manufacturing, mental health services, testing laboratories, medical equipment and pharmaceutical manufacturing is higher than before the pandemic. And it’s likely that these represent structural changes to buying patterns that will keep demand high.

    Fifth, during the pandemic, corporate investments in software and R&D reached unprecedented levels, which drove a rapid increase in new STEM jobs. Because these workers are especially well paid, they have had plenty of disposable income to spend on goods and services, which has supported job growth throughout the economy.

    These factors are spurring positive momentum that will not disappear overnight. Employment growth is likely to slow down from its historically high rates, but it will still remain solid in the coming months. ManpowerGroup’s Employment Outlook Survey shows that the hiring intentions for the fourth quarter are still very high, despite dropping from the previous quarter.

    Next year, however, will look very different. Many of the industries that are still recovering from the pandemic will have reached pre-pandemic employment levels. With demand saturated, those industries may revert to slower hiring. But this alone is unlikely to push job growth into negative territory. What will do that is monetary policy.

    There are two ways to rein in the labor market: Either reduce demand for workers or increase the labor supply. But it’s hard to engineer a boost in labor supply. That takes the kind of legislative action needed to increase immigration, drive people into the labor force or grow investment in workforce training. This is likely to prove elusive in today’s polarized political environment.

    The only option that leaves the Fed is to engineer a recession by continuing to raise interest rates. Expect to see that happen in 2023.

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