Employment growth eased in June, taking some steam out of what had been a stunningly strong labor market.
Nonfarm payrolls increased 209,000 in June and the unemployment rate was 3.6%, the Labor Department reported Friday. That compared to the Dow Jones consensus estimates for growth of 240,000 and a jobless level of 3.6%.
The total, while still solid from a historical perspective, marked a considerable drop from May’s downwardly revised total of 306,000 and was the slowest month for job creation since payrolls fell by 268,000 in December 2020.
Closely watched wages numbers were slightly stronger than expected. Average hourly earnings increased by 0.4% for the month and 4.4% from a year ago.
Job growth would have been even lighter without a boost in government jobs, which increased by 60,000, almost all of which came from the state and local levels.
Other sectors showing strong gains were health care (41,000), social assistance (24,000) and construction (23,000).
Leisure and hospitality, which had been the strongest job-growth engine over the past three years, added just 21,000 jobs for the month. The sector has cooled off considerably, showing only muted gains for the past three months.
The retail sector lost 11,000 jobs in June while transportation and warehousing saw a decline of 7,000.
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The European Union offers cash-strapped Tunisia more than $1bn in financial aid to help boost the nation’s battered economy.
Tunisia is cash-strapped and the economy is heading towards a collapse.
Basic commodities have been in short supply for months. And many Tunisians are struggling with rising living costs.
The European Union is worried that if the country’s economic crisis gets worse, more migrants could cross the Mediterranean Sea to seek a better life in Europe. It has offered the nation financial help, but what is the bloc asking for in return?
Elsewhere, the United Kingdom says it has reached a “first of its kind” economic partnership with the United States.
Plus, China’s youth unemployment hits a record high.
A raft of weak Chinese economic data in May has raised hopes of decisive policy intervention.
Market watchers are anticipating the next steps from China’s State Council and a Politburo meeting in July, during which the Communist Party’s top brass will review the country’s economic performance in the first half of the year.
China’s National Statistics Bureau warned Thursday of “mounting pressure … in domestic structural adjustment” in the world’s second-largest economy. A slew of economic data from industrial production and fixed asset investment to retail sales and trade fell short of expectations, with China teetering on the brink of deflation as its post-pandemic economic recovery stalls.
“I think they are probably considering an overall kind of stimulus package at the moment to boost not only investment, but also consumption using measures such as interest rate cuts,” Bank of America’s chief China economist Helen Qiao told CNBC Thursday.
“At the same time, they probably are considering [a] consumer voucher program and thinking about increasing the fiscal deficit in making fiscal policy more expansionary,” she added. “But that said, a lot of these need to be prepared and then rolled out. It’s not something readily available.”
Economists considered both moves this week to be largely symbolic, but they underscore the urgency of the situation.
“Weak investments data suggest that authorities are unlikely to stop at the monetary easing we saw this week,” Oxford Economics’ lead economist Louise Loo wrote in a note after Thursday’s China data release.
A job fair in China’s southwestern city of Chongqing on April 11, 2023. Unemployment among young people aged between 16 and 24 hit another record in May at 20.8% — four times the urban jobless rate for people of all ages at 5.2%.
Str | Afp | Getty Images
“This suggests that while investments had been state-led so far, it has not been effective in crowding in private investments or lifting overall business sentiment,” she added.
“We therefore continue to expect announcements of further ‘piecemeal’ property sector easing measures to follow in the coming weeks,” Loo wrote.
“And these could entail a further easing in home purchase restrictions, a more aggressive policy push for public housing, and supporting the funding conditions of property developers.”
Goldman Sachs economists said last month that getting young people back to work would give China’s economic recovery a sizable boost, given that they account for almost 20% of consumption in China.
Retail sales, a key gauge of consumer confidence, climbed 12.7% in May, missing consensus expectations for 13.6% growth and slowing from April’s 18.4%.
“Consumption is still a late cycle variable for China, one that comes down to business cycle changes,” Bank of America’s Qiao said. “In other words, consumers have to wait until they get better job security and income expectation, and then they [will be] comfortable to spend more.”
Read more about China from CNBC Pro
While youth unemployment is a structural issue, economists say there’s scope for more policy stimulus to resolve cyclical issues in the shorter term.
“At the moment, if you are look at CPI inflation and also profit/loss making in the corporate sector as well as the labor market, I don’t necessarily think there is any other explanation but cyclically speaking, we have a very large output gap,” said Qiao.
Output gap refers to the difference between an economy’s actual output and its potential output at full capacity.
“Policy stimulus are well warranted and have to be rolled out to get out of the blues, to boost the economy back to its long term potential level,” she added.
Artificial intelligence contributed to nearly 4,000 job losses last month, according to data from Challenger, Gray & Christmas, as interest in the rapidly evolving technology’s ability to perform advanced organizational tasks and lighten workloads has intensified.
The report released Thursday by the outplacement firm shows that layoff announcements from U.S.-based employers reached more than 80,000 in May — a 20% jump from the prior month and nearly four times the level for the same month last year. Of those cuts, AI was responsible for 3,900, or roughly 5% of all jobs lost, making it the seventh-highest contributor to employment losses in May cited by employers.
The job cuts come as businesses waste no time adopting advanced AI technology to automate a range of tasks — including creative work, such as writing, as well as administrative and clerical work. The AI industry is expected to grow to more than $1 trillion fueled by major technological advancements that became apparent last fall with the launch of OpenAI’s ChatGPT bot, a report by Bloomberg Intelligence analysts shows.
This is the first time AI was included on the Challenger report, but not the first time the rapidly advancing technology has made headlines for replacing humans.
ChatGPT enters the newsroom
The Washington Post reported this week on two copywriters who lost their livelihoods because employers (or clients) decided that ChatGPT could perform the job at a cheaper price. Media companies such as CNET have already laid off reporters while using AI to write articles, which later had to be corrected for plagiarism. Earlier this year, an eating disorder helpline used a chatbot to replace human staff members who had unionized. It recently had to pull the plug on the bot after it gave people problematic dieting advice.
In March, investment bank Goldman Sachs predicted in a report that AI could eventually replace 300 million full-time jobs globally and affect nearly one-fifth of employment — with a particular hit to white-collar jobs often considered automation-proof, such as administrative and legal professions.
AI is also a concern in the TV and entertainment writers’ strike that began in May, with writers demanding better pay and job security in addition to a near-total ban on the use of AI to produce written entertainment content.
But analysts note that as with previous technology that has replaced human workers, generative AI is already creating new jobs, and the burgeoning industry is just getting started.
“Generative AI is expected to become a monster employment generator because of estimates of a mushrooming $1.3 trillion AI market that will boost sales and ad spending for the Tech industry,” Ben Emons, a principal at NewEdge Wealth, said Friday in a note.
Layoffs have quadrupled since last year, with media and tech suffering the worst blows. Media has had a record number of year-to-date cuts while tech job losses were the highest since 2001, according to a new report from recruiting firm Challenger, Gray & Christmas.
Every industry increased layoffs this year, except for education, government, industrial manufacturing, and utilities. Tech led the May surge with over 22,000 layoffs for the month, up 2,939% from the same period last year. The total number of layoffs in May was up 20% from April.
So far this year, tech has cut 136,831 jobs, compared to 168,395 for all of 2001, amid the tech industry’s collapse.
Companies overall have eliminated 417,500 jobs since January, the highest five-month total since 2020. Excluding 2020, the start of the pandemic, the year thus far has had the most layoffs since 2009 amid the financial crisis.
Still, the national unemployment rate is at just 3.4%, the lowest it’s been since 1969.
The media industry’s record of 17,436 year-to-date cuts just surpasses the previous record set in May 2020. Within media, the news industry has seen a particularly difficult year. Nearly 2,000 people have lost their jobs in news this year, eclipsing the tally for all of 2022.
Plans by companies to hire over the remainder of the year are down from last year as well. The labor market seems to be slowing due to inflation, high interest rates and fears of recession, as companies announced plans to hire just over 100,000 workers this year, down 83% from what they said in May 2022. This is the lowest level of anticipated hiring in nearly three years, during the pandemic.
“Job openings are flattening. Companies appear to be putting the brakes on hiring in anticipation of a slowdown,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, in the report.
The banking and retail industries also took a hit, with banks announcing nearly 37,000 job cuts through May, quadruple the figure at the same time last year. Retail endured the second highest industry cuts during May, eliminating over 9,000 jobs last month.
Layoffs were concentrated in certain locations. California, home of Silicon Valley, was hit the hardest, with job cuts up tenfold from last year to a staggering 151,300 as of last month. New York followed, with a third as many layoffs as California.
Consumer confidence is at a six-month low as well. In response to the May debt ceiling standoff, outlooks for both business and labor declined, remaining solidly below pre-pandemic levels.
Changing jobs has long been the surest way to get a raise, a phenomenon that gained momentum early in the pandemic when the “Great Resignation” saw millions of workers quit their jobs and decamp to better-paying employers. But those days may be over.
Job-hoppers’ pay gains are fading, according to a new analysis from Bank of America, which found that rates of job-switching are slowing and that workers are seeing fewer benefits from moving to a different company. More employees are staying put, and “we also find the pay raise that job movers are getting is declining,” analysts at the bank said in a report, which drew on anonymized bank account data for the analysis.
Before the pandemic, people tended to see a roughly 10% pay bump from moving to a new employer, according to Bank of America. “Then, when the Great Resignation was in full swing this appears to have risen to 20%. But as of April 2023, pay raises moderated to 13%,” the analysts wrote.
While part of that drop is related to inflation, which has cooled somewhat from its June 2022 peak of 9%, the falling raises may also reflect a looser labor market in which workers have less bargaining power than they did a year ago.
Government data backs up this narrative, with the Labor Department reporting this week that the rate of workers quitting their jobs fell to a two-year low. The quits rate in April fell to 2.4%, nearly matching its pre-pandemic level of 2.3%.
The drop “suggests that the labor market is slackening, despite the reported increase in job openings, and that workers are increasingly sheltering in place in their jobs as better alternatives become less available,” ZipRecruiter chief economist Julia Pollak said in a note.
Similarly, the Federal Reserve Bank of Atlanta estimates that the pay increases of job-switchers have cooled somewhat from their peak last year.
However, changing jobs can still lead to a big pay raise, Bank of America found. This year, the typical raise of a worker making less than $25,000 who switches jobs is over 35%, the bank found — well above the average pre-pandemic raise and nearly on par with the raises of 2021 and 2022.
Higher-paid employees are seeing the biggest drop in raises from job-hopping, with a worker making over $100,000 seeing an average raise of just 6% or 7% when they switch jobs, down from roughly 12% last year, according to the bank’s figures. For people earning $50,000 to $100,000, raises have fallen to 10%, from about 15% last year, the research shows.
The six-figure set is contending with a significant job slowdown as companies in the technology, advertising, business services and finance sectors lay off staff. Unemployment payments have jumped most significantly among high-income households, Bank of America found last month, while the highest-paid workers are also seeing a significant rise in job disruptions — the term for a layoff or firing.
The data indicate that “the higher-income end of the labor market is softening much more significantly than the lower end,” analysts wrote.
SEVILLE, Spain — Socialist Prime Minister Pedro Sánchez won’t be on the ballot when Spaniards vote in local elections Sunday — but he might as well be.
Everyone in the country sees this weekend’s municipal votes as a dress rehearsal for the national election, which has to be held by the end of the year.
That’s bad news for Socialist candidates like Antonio Muñoz, the mayor of Seville who just wants to be reelected on his own merit — but may end up losing his post because Sánchez is so unpopular.
In an interview with POLITICO, Muñoz complained that the national framing of the election — and the conservative party’s critiques of Sánchez — had undermined the possibility of real debate over how to improve Spain’s fourth-largest city, the capital of the country’s Andalusia region.
“If you want to just generate noise and have a debate about national politics: run for parliament, not mayor of Seville,” Muñoz said. “Me, I’ve stayed faithful to my slogan in these elections — Seville and only Seville — and I think that’s what voters want to hear about.”
In any ordinary election season, Muñoz might be right.
The openly gay, 63-year-old economist is an unusually popular mayor in Seville, a city that once had a reputation for being inward-looking and socially conservative.
Elected to the city council in 2011, Muñoz has worked to redefine the city’s identity and reinforce the idea that there’s more to it than bullfights, religious processions and flamenco — while being careful not to alienate Seville’s traditionalists.
As the city council member in charge of the powerful urbanism, tourism and culture portfolios, he bet on a more alternative, vibrant vision of Seville — promoting electronic music and indie film festivals; and lobbying to steal major events like the Goyas, Spain’s version of the Oscars, away from Madrid.
It was under Muñoz’s watch that Game of Thrones came to town, when the dragon-packed extravaganza used the lush Alcázar palace as a stand-in for the kingdom of Dorne. The producers of Netflix’s The Crown also passed through, using the palatial Alfonso XIII Hotel as a double for Beverly Hills and filming Mohamed Al-Fayed’s Egyptian wedding in Seville’s sumptuous Casa de Pilatos estate.
At the same time that he’s shown off the city center — famed for its narrow, winding streets, whitewashed homes, interior gardens and Moorish architecture — he’s also promoted newer parts of Seville. These include the high-tech Cartuja Science and Technology Park, where the European Commission recently inaugurated the headquarters of its new European Centre for Algorithmic Transparency.
He’s also an enthusiastic booster of the eclectic Fibes Conference Center, located in the working-class Sevilla Este district, which this year will host the 2023 Latin Grammys, the first-ever to be held outside the United States.
“During the next term, we’ll be doing even more to consolidate this city as a Spanish and European reference point for culture, the green economy and the digital transition,” said Muñoz. He became mayor early last year when his predecessor stepped down to run for office at the regional level.
While crafting a more modern image of Seville, Muñoz has been careful not to neglect the city’s classic cultural scene.
He may not be a member of any religious brotherhood, but he has no problem joining religious processions during Holy Week. He may not be a bullfighting enthusiast, but he’s happy to socialize with famous toreros. And while he may not have a passion for flamenco, he’s an almostomnipresentforce at the city’s annual April Fair, where smartly dressed men spend a week dancing with women in long, ruffled, polka-dot dresses while downing pitchers of rebujito, the signature Andalusian cocktail.
“You can like those events more, or less … but they’re a part of our history, our way of life,” said Muñoz.
The skill with which Muñoz has walked the line has played well among sevillanos, especially those who work in the hospitality sector and have been delighted to see the number of tourists in the city boom. Some 6.5 million overnight stays were registered last year.
“I’ve always been proud of my city, but right now I feel that Seville is at a new level as a destination, as a brand,” said restaurant owner Emilio Gimeno. “I think a lot of that has to do with the mayor because he’s always promoting the city, he never stops.”
“I like that he’s a normal guy who lives in the city and doesn’t move around in an official vehicle or surrounded by bodyguards,” he added. “If you’re opening up a new bar, he’s the sort of person who will make time in his schedule to show up at the inauguration, the sort that wants things to work out and go well for you.”
The Sánchez problem
The trouble for Muñoz is that when Sevillanoshead to the polls, they’re be making their choice based not just on his performance — but on the reputation of his party.
“The polls suggest that three out of four Spaniards intend to base their vote on local matters, but a quarter admit their vote will depend on national issues,” said Pablo Simón, a political scientist at Madrid’s Carlos III university. “That’s problematic for some mayors because Sánchez is such a polarizing figure.”
The local election will take place just months before Sánchez’s fragile left-wing coalition government — the first in Spain’s history — is set to complete its four-year term in December.
Despite the devastating impact of the COVID crisis and the economic impact of the war in Ukraine, from the outside, Sánchez’s administration appears to have weathered the storm well.
Spain’s gross domestic product has been growing at a rate above the EU average, and unemployment has dropped to levels not seen since 2008.
The country’s residents pay some of the lowest power prices in Europe, thanks to the Iberian Exception energy price cap. The European Commission has applauded Spain for efficient handling of its share of the bloc’s pandemic recovery cash.
And yet, within Spain, perception of the government is negative, and all of the parties in the ruling coalition have suffered a steep drop in the polls. Since May of last year, Sánchez’s Socialists have trailed behind the country’s conservative Popular Party, which is currently 7 percentage points ahead.
Simón, the political scientist, said that some Spaniards distrust Sánchez for having entered into a coalition government with far-left parties with which he said he’d never govern. Not to mention that, like most political leaders, the prime minister’s prestige took a hit during the pandemic.
“The government’s policies — the higher minimum wage, the basic income, the country’s role in Europe — are broadly popular,” Simón said. “But at a personal level, he isn’t.”
Juan Espadas, Muñoz’s predecessor in Seville’s city hall and current leader of the Andalusian Socialists, admitted that the prime minister’s unpopularity had become a factor in the local elections.
“The right has realized that they can’t challenge him on his politics, so now what they’re trying to do is to discredit him on a personal level,” he said, adding that the Popular Party had focused on casting Sánchez as “an egoist” willing to do anything to hold on to power.
“Their only goal is to make it so that people won’t go vote because they don’t like the person behind the party,” he said.
The ghost of ETA
In addition to invoking the unpopular prime minister, the Spanish conservatives have been reminding voters of the coalition government’s cordial relations with pro-independence parties in the national parliament.
When the Basque pro-independence party EH Bildu included 44 former members of the terrorist group ETA in its official lists for the local elections earlier this month, the Popular Party seized on the issue and turned it into a major talking point in its campaign in cities across the country.
Muñoz has worked to redefine Seville’s identity and reinforce the idea that there’s more to it than bullfights, religious processions and flamenco | Cristina Quicler/AFP via Getty Images
In Seville, José Luis Sanz, the conservative candidate for mayor, rallied supporters by declaring that his neighbors “could not understand how Muñoz’s Socialists have surrendered to the heirs of ETA.”
Like other Socialist candidates, Muñoz has denounced this line of attack, stressing its irrelevance in a campaign that should be about the threat posed by housing insecurity or extreme heat — not a terrorist group that ceased to exist more than a decade ago.
“I think what the [Popular Party] is doing is enormously disrespectful toward voters,” he said. “Instead of talking about what’s needed in this city’s poorest neighborhoods, about what we can do to promote culture, about how we should manage tourism, they want to talk about a party that isn’t up for election in Seville.”
But what politicians want to talk about and what voters are hearing seem to rarely be the same thing.
In the middle-class Los Remedios district, 83-year-old María Camacho Rojas has followed the campaign and decided she won’t give her vote to the mayoral candidate of a party led by Sánchez, a politician she believes to be “a compulsive liar.”
“[Sánchez] does deals with ETA, he doesn’t care about Spain, and I — like most Spaniards — am worried about the state in which he’s going to leave our country,” she said.
She added she’d vote for Muñoz in a heartbeat if he belonged to another party. “I like the mayor, I like how much he does for the city, how much he cares about Seville,” she said. “I’m not going to vote against him but I won’t vote for him: I’ll cast a blank ballot on Sunday.”
In Seville, the latest polls predict a technical tie, with Muñoz’s Socialists winning 12 or 13 seats in the city council and the Popular Party taking 12. That would leave the two mainstream parties dependent on the support of more extreme elements, the far-right Vox party on one side and array of left-wing groups on the other — with those two ideological blocs also nearly tied.
Whatever the outcome, the fallout is not likely to remain contained within city limits: Muñoz’s Sánchez problem could easily become Sánchez’s Seville problem.
Losing the city — the largest municipality controlled by the Socialists — would be a severe blow for the prime minister just months ahead of the national elections.
“One city won’t decide a general election,” said Simón. “But it can make the outcome easier for some, and all the more difficult for others.”
Despite all the chatter of a slowing job market, unemployment was down in a majority of U.S. states in April.
According to data from the Bureau of Labor Statistics released last week, 16 states had unemployment rates lower in April as compared to last year and 14 states had month-over-month decreases. Furthermore, with the exception of Rhode Island, all U.S. states plus the District of Columbia reported more people working this April than last year.
Additionally, 17 states had unemployment rates lower than the national average of 3.4%.
South Dakota had the lowest level of unemployment in April at 1.9%, followed by Nebraska at 2%, and New Hampshire and North Dakota (both at 2.1%).
Despite Nevada having the highest unemployment rate in the country (5.4%), it conversely had the biggest increase in employment year-over-year at 4.2%. New Mexico, which had an unemployment rate slightly above the national average at 3.5%, also had the biggest year-over-year decline in unemployment, with a decrease of 0.8%.
Here are the 15 states where unemployment was the lowest last month across the country:
As graduation season approaches, young people are bracing themselves for the job hunt that awaits them on the other side of commencement ceremonies. But for this year’s crop of new grads, finding work might not be as difficult as in previous years.
A new study from the Economic Policy Institute shows the Class of 2023 is graduating into a stronger labor market for young workers, as measured by lower unemployment and underemployment rates, than the year prior’s graduating class. The youth unemployment rate for young people, ages 16 to 24, hit 7.5% in March, a 70-year low, the study found. The figure also reflects a downtick in the overall U.S. unemployment rate, which fell to 3.5% during the same period, Bureau of Labor Statistics data shows.
“The very low [youth] unemployment rate now is incredibly striking,” EPI Senior Economist Elise Gould told CBS MoneyWatch.
Young people have historically experienced unemployment at 2.6 times the rate of people ages 25 and older, due to their comparatively lower levels of education, work experience and skills. But that changed when pandemic-driven labor shortages forced employers to hire younger, less experienced workers whom they may have previously overlooked.
Young workers are also now more likely to work just one job instead of multiple side hustles. Wages rose 9% on average during the pandemic, EPI data shows, meaning young workers are likely making more today than they did pre-pandemic.
And they have more predictable work hours, the study found: 47.5% of young people are working full time, up from 46.3% in 2019.
Inflation curveball
Despite higher wages and more stable work, however, young workers continue to struggle to pay their bills. Although overall inflation has moderated in recent months, rising prices at the grocery store continue to take a big bite out of workers’ paychecks.
“There’s a motivating carrot at the end of that labor shortage, and that’s increased wages, [but] the other side of that is inflation which is keeping these jobs at entry level,” said Dawn Thomas, communications director at the nonprofit Philadelphia Works.
While EPI data shows the Class of 2023 could fare better than their peers before them in the job hunt, that could soon change if the U.S. economy is hit with a recession, Gould told MoneyWatch.
“Unfortunately, many of those gains will reverse if we cannot hold off a recession,” Gould said.
More than half of economists surveyed by the National Association for Business Economics (NABE) predict the U.S. will slide into a recession at some point this year.
“Sizable disconnect” in youth opportunity
A recession could also deepen existing inequities in employment access among young people, especially those who are already struggling to study and find work due to socio-economic challenges, Thomas said.
Opportunity youth, or people between the ages of 16-24 who are disconnected from school and work, comprised 19% of young people respondents in Philadelphia’s American Community Survey in 2021. These young people, many of whom are people of color, are “much more likely” to experience poverty than their peers who attend school or work, the study shows. Opportunity youth are also more likely to lack the literacy, numeracy and tech skills that prepare early career workers to “go into the workforce strong,” making it difficult for them to improve their current economic situations, Thomas told CBS MoneyWatch.
“The challenges aren’t equitable,” Thomas said.”There’s a sizable disconnect between the youth population and opportunity youth who are more likely to live in poverty and are historically individuals of color.”
Two months ago, Republican Rep. George Santos of New York co-sponsored a bill that seeks to clamp down on a pandemic swindle: People falsely claiming generous unemployment aid enacted to help struggling workers in the pandemic. Now, he’s been accused of the same type of fraud.
The Protecting Taxpayers and Victims of Unemployment Fraud Act would create incentives for states to go after unemployment fraud. States individually oversee the distribution of jobless aid for their residents, and the bill would allow states to keep 25% of fraudulently claimed funds that are recovered.
During the pandemic, unemployment aid provided an extra $600 a week in added benefits and expanded to workers who don’t usually benefit from aid, including gig workers and the self-employed.
Republicans have long sounded alarms about pandemic fraud in the unemployment system, which the Labor Department last year said spiked to $45.6 billion during the crisis as swindlers targeted the generous benefits. Earlier this year, House Ways and Means Committee Chairman Jason Smith, a Republican from Missouri, called it “the greatest theft of taxpayer dollars in American history.”
Santos, though, was allegedly among those who participated in the fraud, according to charges leveled by federal prosecutors in an indictment that was unsealed on Wednesday.
The congressman is accused of a host of other crimes, including money laundering, wire fraud and making materially false statements to the House of Representatives. He’s also known for his fabulations about everything from his education to work history, having admitted to the New York Times that he had lied about his background.
Santos, who was arrested Wednesday morning, pleaded not guilty at his arraignment. He was ordered to be released on a $500,000 bond and agreed to surrender his passport.
Unemployment fraud charges against Santos
Santos signed on in March as one of 35 co-sponsors of the unemployment fraud bill, which was introduced to the House in February.
Federal prosecutors allege that Santos fraudulently collected pandemic jobless aid from New York state while he was employed — earning $120,000 a year at a Florida-based investment firm.
Santos allegedly falsely stated that he was unemployed starting the week of March 22, 2020 — about the time the pandemic shut down the economy — through about April 15, 2021, according to the federal complaint. Santos sent in weekly attestations that he “unemployed, available to take on new work, and eligible for benefits,” the complaint alleges.
But while he said he was unemployed, the indictment claims, Santos was collecting a paycheck from the investment firm during that time.
The amount of unemployment aid allegedly claimed by Santos: $24,744.
House Republicans brought the bill to the floor on Wednesday, the same day that Santos was charged by prosecutors.
The irony wasn’t lost on Rep. Jim McGovern, a Democrat from Massachusetts, who spoke on Wednesday during a debate over the Republicans’ anti-fraud measure.
“I have to point out the ridiculous hypocrisy of what’s going on,” he said. “A sitting member of the House Republican conference was indicted in federal court this morning for unemployment fraud.”
The artificial intelligence trade may be leaving investors vulnerable to significant losses.
Evercore ISI’s Julian Emanuel warns Big Tech concentration in the S&P 500 is at extreme levels.
“The AI revolution is likely quite real, quite significant. But… these things unfold in waves. And, you get a little too much enthusiasm and the stocks sell off,” the firm’s senior managing director told CNBC’s “Fast Money” on Monday.
In a research note out this week, Emanuel listed Microsoft, Apple, Amazon, Nvidia and Alphabet as concerns due to clustering in the names.
“Two-thirds [of the S&P 500 are] driven by those top five names,” he told host Melissa Lee. “The public continues to be disproportionately exposed.”
Emanuel reflected on “odd conversations” he had over the past several days with people viewing Big Tech stocks as hiding places.
“[They] actually look at T-bills and wonder whether they’re safe. [They] look at bank deposits over $250,000 and wonder whether they’re safe and are putting money into the top five large-cap tech names,” said Emanuel. “It’s extraordinary.”
It’s particularly concerning because the bullish activity comes as small caps are getting slammed, according to Emanuel. The Russell 2000, which has exposure to regional bank pressures, is trading closer to the October low.
“You want to stay in the more defensive sectors. Interestingly enough with all of this AI talk, health care and consumer staples have outperformed since April 1,” Emanuel said. “They’re going to continue outperforming.”
The U.S. added 253,000 jobs in April, according to a report released Friday by the Labor Department, well above estimates from economists. Unemployment also fell to 3.4%, and wages were also higher. Ed O’Keefe has the details.
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The numbers: The U.S. created a stronger-than-expected 253,000 new jobs in April and wages rose sharply, indicating there’s still lot of demand for labor even as the economy slows.
The increase surpassed the 180,000 forecast of economists polled by The Wall Street Journal.
The unemployment rate, what’s more, fell a tick to 3.4% from 3.5%,…
The numbers: The U.S. created a stronger-than-expected 253,000 new jobs in April and wages rose sharply, indicating there’s still lot of demand for labor even as the economy slows.
The increase surpassed the 180,000 forecast of economists polled by The Wall Street Journal.
The unemployment rate, what’s more, fell a tick to 3.4% from 3.5%,…
A lively U.S. labor market in the past two years has been a rare bright spot in a fitful economic recovery from the pandemic, with robust job growth bringing the nation’s unemployment rate close to a 50-year low. But with a possible recession looming, many companies are now slamming the brakes on hiring in the so-called knowledge sector.
Lyndal Cairns, a 41-year-old product marketer, left a her job at a startup in March in search of work at a more established company that would offer more growth opportunities. Since then, the Washington, D.C., resident estimates she’s submitted 1,500 applications but has had only about 20 interviews for new positions.
“The conversion rate is abysmal — I would not put that on my CV in a marketing context,” she joked.
“I am definitely finding it less effective than previous job searches,” she said of her job hunt. “Feeling that I’m shouting into the void is the most difficult part. You just don’t know — for every application, does the job exist, is the job still open, are you a good fit, is it a good wage, do they already have someone that they’re interviewing? There’s a lot you just can’t see.”
Lyndal Cairns, a product marketer working in technology, left a startup job in March in search of greener pastures.
Dekka Studios
Across the U.S., it’s worth noting, employers are still hiring. Payrolls rose by 230,000 in March, while the number of unemployed workers is near historic lows.
Yet there’s been a marked slowdown in hiring for many white-collar jobs as businesses gird for a possible recession. Listings for technology roles are down 55% from a year ago, while banking industry vacancies are down more than 40% and insurance listings have fallen 18%, according to research from Indeed.
“Many businesses right now are just uncertain, either about the medium-term economic outlook, or they’re concerned that their current employment levels are not aligned with where their business is headed,” Nick Bunker, director of North American Research at the Indeed Hiring Lab, told CBS MoneyWatch.
That’s leading companies to pull back on hiring, particularly in fields like marketing and human resources, he added.
In some ways, the situation is a reversal of the first year of the pandemic. Lower-wage service jobs, especially in leisure and hospitality, are still plentiful as Americans are going out and spending money. But hiring for professional and knowledge workers has slowed.
“At the 10,000-foot level, the job market is very strong,” Bunker said. However, “Things are happening very differently in different labor neighborhoods.”
Pulling back
Several pockets of the corporate workforce are more affected by hiring slump, Bunker said. One is marketing, an area companies often trim when their business wobbles and they’re looking to cut costs. Opportunities in corporate recruitment and human resources more broadly are also drying up.
“We’re hearing from a lot of business executives that demand is much softer than it was a year ago,” said Gregory Daco, chief economist at EY. “It’s not just the tech sector — it’s broadened out into finance, professional and business services, the information sector more broadly.”
Another sign of this cooldown is that employees are putting in fewer hours. The typical workweek length, which surged during the pandemic, has fallen to pre-pandemic levels. If those hours fall any lower, Daco said, that would show employers are “trying to cut back on their workforce.”
And while layoffs outside the tech sector remain at a historic low, the number of workers collecting unemployment has been steadily rising, indicating that it may be taking longer for those laid off to find work.
“The U.S. economy is losing speed, and the landing strip is short and narrow,” Daco said in a research note.
“I just have to keep going”
That’s not to say a recession is inevitable. The economy is still expanding, growing at a modest 1.1% annual rate in the first three months of the year, and none of the indicators that typically precede recessions — which include various measures of employment, spending and personal income — are flashing red, noted Apollo chief economist Torsten Slok. The construction and travel industries and higher-end consumer spending are holding up well, and there’s a “manufacturing renaissance” unfurling after Congress dedicated billions to domestic industry, analysts at Vital Knowledge said in a research note.
“There’s no doubt the U.S. economy is cooling,” they wrote. “However, ‘cooling’ doesn’t mean ‘crashing.'”
Indeed, a cooldown without a crash would be the very definition of the “soft landing” the Federal Reserve has tried to achieve.
Still, worker confidence levels are far below where they were in the heady days of 2021 and 2022 as the economy was snapping back into shape.
One software engineer, who asked that his name be withheld to avoid possible retaliation from his employer, said he has applied to 60 jobs without a single response — a sharp contrast from his previous job-hunting experience during the pandemic, where “pretty much every place I applied, I got an interview and then I had a job within a month.”
“It’s very worrying — I thought I was in a safe industry,” he said.
Indeed’s research bears out this loss of confidence, Bunker said. In a recent survey, most people said they could easily find a job if they had to, but “those who were employed and have higher levels of education, they’ve become more pessimistic.”
Cairns, the product marketer, chooses to remain optimistic.
“It was a gamble to leave when I did because I know what the job market is, but you have to be happy,” she said. “This is not my first rodeo. I know how to get a job, and I know that one will come that is a good fit. I just have to keep going.”
The stock market closed in positive territory Thursday despite the latest GDP report from the the Commerce Department showing that the economy grew at an annual rate of only 1.1% in the first quarter of 2023. Lori Bettinger, president of BancAlliance, spoke with CBS News about what the latest GDP figures mean for investors and consumers going forward.
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BuzzFeed is shutting down its BuzzFeed News operation, with CEO Jonah Peretti writing in a company memo that it “can no longer continue to fund” the site.
The company, known for a millennial-friendly site filled with listicles and viral videos, said it is also cutting 15% of its employee base, or about 180 workers. BuzzFeed News is the section of the site that produces journalism and news coverage, such as recent articles about the shooting at a Sweet 16 party in Alabama.
The outlet won a Pulitzer Prize in 2021 for reporting on the mass detention of Muslims in China.
Peretti’s decision comes as BuzzFeed’s revenue plunged 27% in the fourth quarter, prompting the business to tumble into the red. He underlined the challenges the company is facing in the memo, sent Thursday morning to his employees, adding that BuzzFeed must cut jobs and reduce spending as a result.
“We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts,” Peretti wrote in the memo, which was shared with CBS MoneyWatch.
He added, “I made the decision to overinvest in BuzzFeed News because I love their work and mission so much.”
The company said there are “ongoing discussions about the future of BuzzFeedNews.com,” but that it plans to preserve the section’s work on the site.
“No jobs are being replaced by AI”
BuzzFeed had started tapping artificial intelligence for writing quizzes and articles, some with the byline “Buzzy the Robot.” Some of the pieces are travel-focused, with Buzzy recommending locations like Stanley, Idaho, which it deemed “a small-town slice of outdoor adventure.”
“No jobs are being replaced by AI,” the company told CBS MoneyWatch.
It added that BuzzFeed and its subsidiary HuffPost will offer roles to some BuzzFeed News journalists, while the company is also starting discussions with the News Guild union about the layoffs.
Read Peretti’s memo in full below.
Hi all,
I am writing to announce some difficult news. We are reducing our workforce by approximately 15% today across our Business, Content, Tech and Admin teams, and beginning the process of closing BuzzFeed News. Additionally, we are proposing headcount reductions in some international markets.
Impacted employees (other than those in BuzzFeed News) will receive an email from HR shortly. If you are receiving this note from me, you are not impacted by today’s changes. For BuzzFeed News, we have begun discussions with the News Guild about these actions.
As part of today’s changes, both our CRO Edgar Hernandez and COO Christian Baesler have made the decision to exit the company. I’m grateful to both of them for their passion and dedication to Complex and to BuzzFeed, Inc. Christian will be with us through the end of April, and Edgar through the end of May to help with the transition.
Marcela Martin, our President, will take on responsibility for all revenue functions effective immediately. In the US, Andrew Guendjoian is our new Head of Sales, and Ken Blom will continue in his role as Head of Revenue Operations. Globally, International Sales will move under Rich Reid, Head of International and Head of Studio, also reporting to Marcela.
I have great confidence in this revenue leadership team, and the early plans I’ve seen from them to accelerate performance from our Business Org. We will share more on their plans in the Business All Hands next week (and we are extending an invite company-wide).
The changes the Business Organization is making today are focused on reducing layers in their organization, increasing speed and effectiveness of pitches, streamlining our product mix, doubling down on creators, and beginning to bring AI enhancements to every aspect of our sales process.
While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization. As a result, we will engage with the News Guild about our cost reduction plans and what this will mean for the affected union members.
HuffPost and BuzzFeed Dot Com have signaled that they will open a number of select roles for members of BuzzFeed News. These roles will be aligned with those divisions’ business goals and match the skills and strengths of many of BuzzFeed News’s editors and reporters. We raised this idea with the News Guild this morning and look forward to discussing it further. Moving forward, we will have a single news brand in HuffPost, which is profitable, with a loyal direct front page audience.
I want to explain a little more about why we’ve come to these deeply painful decisions. We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts. Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.
But I also want to be clear: I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances. Our job is to adapt, change, improve, and perform despite the challenges in the world. We can and will do better.
In particular, the integration process of BuzzFeed and Complex, and the unification of our two business organizations, should have been executed faster and better. The macro environment is tough, but we had the potential to generate much more revenue than we delivered over the past 12 months.
Additionally, I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.
More broadly, I regret that I didn’t hold the company to higher standards for profitability, to give us the buffer needed to manage through economic and industry downturns and avoid painful days like today. Our mission, our impact on culture, and our audience is what matters most, but we need a stronger business to protect and sustain this important work.
Please know that we exhausted many other cost saving measures to preserve as many jobs as possible. We are reducing budgets, open roles, travel and entertainment, and most other discretionary, non-revenue generating expenditures. Just as we reduced our footprint in NYC last year, we will be reducing our real estate in Los Angeles — from four buildings down to one, which saves millions in costs as well as mirrors our current hybrid state of work.
I’ve learned from these mistakes, and the team moving forward has learned from them as well. We know that the changes and improvements we are making today are necessary steps to building a better future.
Over the next couple of months, we will work together to run a more agile and focused business organization with the capacity to bring in more revenue. We will concentrate our news efforts in HuffPost, a brand that is profitable with a highly engaged, loyal audience that is less dependent on social platforms. We will empower our editorial teams at all of our brands to do the very best creative work and build an interface where that work can be packaged and brought to advertisers more effectively. And we will bring more innovation to clients in the form of creators, AI, and cultural moments that can only happen across BuzzFeed, Complex, HuffPost, Tasty and First We Feast.
It might not feel this way today, but I am confident the future of digital media is ours for the taking. Our industry is hurting and ready to be reborn. We are taking great pains today, and will begin to fight our way to a bright future.
On Monday we’ll begin to have conversations with each division about the way forward. And in the meantime, I hope you can take time for yourselves this weekend.
Thank you for supporting one another on a difficult day.
IMF Managing Director Kristalina Georgieva on Thursday said it was important that the tensions between the U.S. and China not devolve into a second Cold War.
At a press briefing at the start of the IMF/World Bank meetings of finance ministers and central bankers. Georgieva called for “cool-headedness” and rational policies to lower tension.
The strong job numbers could lead the Fed to continue to raise interest rates.
The US economy continued to churn out jobs at a brisk pace in March, pushing the unemployment rate down to 3.5 percent, signs of persistent labour market tightness that could see the Federal Reserve hiking interest rates again next month.
Nonfarm payrolls increased by 236,000 jobs last month, the Department of Labor said in its closely watched employment report on Friday. Data for February was revised higher to show 326,000 jobs were added instead of 311,000 as previously reported.
Some of the slowdown in hiring reflected the fading boost from the unseasonably mild weather in January and February.
Economists polled by Reuters had forecast payrolls rising 239,000. Estimates ranged from 150,000 to 342,000. The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.
As with most recent economic data, it was too early for financial market stress, triggered by the failure of two regional banks in March, to show up in the employment report.
The unemployment rate fell to 3.5 percent from 3.6 percent in February. Average hourly earnings rose 0.3 percent in March after gaining 0.2 percent in February. That lowered the annual increase in wages to 4.2 percent from 4.6 percent in February, which was still too high to be consistent with the Fed’s 2 percent inflation target. Fed officials will now await inflation data later this month to gauge the effectiveness of their year-long monetary policy tightening campaign.
Financial markets were leaning towards the US central bank increasing rates by another 25 basis points at the May 2-3 policy meeting, according to CME Group’s FedWatch tool.
The Fed last month raised its benchmark overnight interest rate by a quarter of a percentage point, but indicated it was on the verge of pausing further rate hikes in a nod to financial market stress. It has hiked its policy rate by 475 basis points since last March from the near-zero level to the current 4.75 percent-5.00 percent range.
But the labour market is losing its shine. The Department of Labor’s annual revisions to the weekly claims and continuing claims data published on Thursday showed significant upgrades to both series.
Surveys from the Institute for Supply Management this week offered a downbeat assessment of the labour market. Job openings fell below 10 million at the end of February for the first time in nearly two years, though there were 1.7 job openings for every unemployed person that month, government data showed.
The labour market is expected to considerably loosen up starting in the second quarter as companies respond more to slowing demand caused by the higher borrowing costs.
Credit conditions have also tightened, which could make it harder for small businesses and households to access funding. Small businesses, like restaurants and bars, have been the main drivers of job growth since the recovery from the pandemic.
Some economists have predicted that payrolls will turn negative in the second half of the year, a development which they said would compel the Fed to start cutting rates to avoid plunging the economy into a deep recession. Fed Chair Jerome Powell has pushed against this assumption.
Economists who have forecast a rate cut this year argued that parts of the economy, like housing, are already in recession, while tighter lending standards adopted by banks mean credit is going to be more restricted in the economy.
They also noted that business sentiment was at recessionary levels, while consumer confidence remained lacklustre. (Reporting by Lucia Mutikani; Editing by Paul Simao and Chizu Nomiyama)
