Newspaper & online reporters and analysts explore the cultural and news stories of the week, with photos frequently added by Esco20, and reveal their significance (with a slant towards Esco 20's opinions)
Showing posts with label U.S. ECONOMY. Show all posts
Showing posts with label U.S. ECONOMY. Show all posts
June 4, 2022
Hiring Remains Strong Even as Fed Tries to Cool Economy
The Labor Department reported 390,000 new jobs in May, as policymakers try to ease inflation without inducing a recession.
American employers extended an impressive run of hiring in May, even as policymakers took steps to cool the economy in an effort to ease high inflation.
The Labor Department reported Friday that employers added 390,000 jobs, the 17th straight monthly gain. The unemployment rate was 3.6 percent for the third straight month, a touch away from a half-century low.
At the same time, the labor force grew by 330,000 people, and the share of adults employed or looking for work continued to edge closer to prepandemic levels.
The data signaled that the Federal Reserve’s initial moves to dial back its monetary support for the economy were — at least so far — not constraining business activity so much that hiring was feeling a pinch.
After the strong rebound from the depths of the coronavirus lockdowns — all but 800,000 of the 22 million jobs that were lost have been recovered — the Fed has shifted its emphasis from maximum employment to its other mandate: price stability. The challenge is to apply its primary tool, a steady series of interest-rate increases, without inflicting a recession.
“I think we’re on sort of what looks like a glide path right now, and that’s good — nothing’s broken,” said Guy Berger, the principal economist at the career-focused social network LinkedIn. “But keep fast-forwarding it a year and the question marks are still big.”
The closely watched indicators include the impact on wages, which have been increasing at a pace not seen in decades, though not enough to keep up with inflation over the past year. The Fed is worried that rising labor costs will be passed along to consumers.
On that score, the Labor Department report showed little change in trajectory. Average hourly earnings rose 0.3 percent from the previous month, the same pace as in April, and were 5.2 percent higher than a year earlier, compared with a 5.5 percent year-over-year increase in April.
“It’s moderating, but it’s not moderating to a level, I think, where it’s consistent with the Fed’s inflation goals,” said Michael Feroli, chief U.S. economist at J.P. Morgan, said of wage growth. He said the Fed would probably want wages to cool toward an annualized 3.5 percent pace, at the higher end, a rate that officials view as aligned with 2 percent inflation.
The State of Jobs in the United States
Job gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.
May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent in the fifth month of 2022.
Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.
Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.
Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?
President Biden gave a nuanced celebration of the jobs data in remarks on Friday, emphasizing recent gains while arguing that a slowdown would be welcome, allowing inflation to ease.
“The point is this: We’ve laid an economic foundation that’s historically strong,” Mr. Biden said. “Now we’re moving forward to a new moment, where we can build on that foundation, build a future of stable, steady growth so that we can bring down inflation without sacrificing all of the historic gains that we have made.”
May 9, 2022
Why the stock market keeps diving
|
March 5, 2022
Good jobs numbers Unemployment at 3.8%
Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images
- The labor market added 678,000 jobs in February, driving the unemployment rate down to 3.8 percent from 4 percent in January, the lowest level since the start of the pandemic. However, wage gains have stalled after historic gains, and are being wiped out by high inflation. [Wall Street Journal / Josh Mitchell]
- The strong employment numbers are a good sign for the labor market and reflect a rebound from the latest wave of Covid-19 infections due to the omicron variant — and post-pandemic recovery overall. But employment is not yet back to pre-pandemic levels, and many people need to negotiate child care and health concerns. [NPR / Scott Horsley]
- The employment boom isn’t hitting everyone equally; the unemployment rate for Black women rose from 5.8 percent to 6.1 percent in February from the previous month. Their participation in the workforce also decreased by .2 percentage points last month. [NBC / Hannah Miao]
- Nevertheless, the positive jobs numbers are part of the calculus that goes into the Federal Reserve’s decision to raise interest rates in an effort to combat inflation. The Russian invasion of Ukraine has shaken global markets, potentially causing the Fed to soon increase rates by .25 percent instead of the .5 percent initially predicted. [Reuters / Lucia Mutikani]
- Fed Chair Jerome Powell said Thursday that “hindsight says we should have moved earlier” on rate increases. [The Hill / Sylvan Lane]
March 1, 2022
The country’s youngest workers are securing the fastest wage increases of any age group,
| |||
| |||
|
January 8, 2022
Job Market Remains Tight Despite Omicron Concerns
Latest data shows few layoffs as employers struggle to find enough workers; trade deficit widened
The Labor Department's jobless claims report is expected to report initial jobless claims, a proxy for layoffs, stayed near a five-decade low at a seasonally adjusted 195,000 for the week that ended on Jan. 1, Gabriel T. Rubin reports. That would keep the four-week average for claims, which smooths out volatility, near last month’s level, the lowest since 1969.
The labor market's recovery could be threatened by the rise in Omicron infections over the past month. But with job openings at records and an unprecedented number of Americans quitting their jobs, employers may bear the brunt of the impact from another season of pandemic disruptions.
U.S. job growth for 2021 is expected to hit an annual record, economists say, with the economy positioned to churn out jobs this year despite temporary disruptions from the Omicron variant’s surge, Sarah Chaney Cambon reports.
U.S added just 199,000 jobs in December, but total increase of 6.4 million in 2021 and tight labor market signal steady gains ahead
Such gains would leave the U.S. with about 6.5 million more jobs than at the end of 2020—more than in any year on record—but 3.5 million jobs short of pre-pandemic levels.
- Friday’s report is a snapshot taken before the Omicron variant's spread in late December, and while the variant has taken a toll on some businesses’ revenue, many employers are clinging to the workers they have as consumers continue to spend.
May 8, 2021
April's jobs report clouds hopes of a swift economic recovery
|
April 30, 2021
Shopping And Shots Power An Economy Heading To Its Fastest Growth Since 1984
The U.S. economy expanded at a rapid pace in the first three months of the year, setting the stage for what's expected to be the strongest annual growth in nearly four decades.
According to the Commerce Department, the economy grew at an annual rate of 6.4% between January and March as millions of Americans got vaccinated against COVID-19 and the federal government spent trillions of dollars to counteract the effects of the pandemic recession.
"The $1,400 paychecks that hit consumer mailboxes in March made a difference," said Nela Richardson, chief economist at the payroll processing company ADP.
Federal relief payments coincided with a nationwide vaccination campaign. More than 140 million Americans have so far received at least one shot.
"I think that's made a huge impact on confidence in the economy as things are starting to reopen and more people are inoculated against this disease," Richardson said.
The data comes a day after President Biden told Congress that "America is on the move again" as he touted his administration's work to end the coronavirus crisis.
Strong consumer spending in January and March helped to offset a February slump, when much of the country was hit with severe winter weather. In quarterly terms, the economy was 1.6% larger than in the final three month of 2020.
The expansion of the U.S. economy during the quarter is a marked contrast to the Eurozone, where vaccine rollout has been slower and restrictions on business more severe. Forecasters expect Europe to report an economic contraction for the first three months of the year.
"The course of the virus determines the course of the economy," said Diane Swonk, chief economist at Grant Thornton. "What we've seen in the Eurozone is really the mantra we've had to live with for the last year."
The U.S. economy shrank by 2.5% last year as a result of the pandemic, but forecasters expect a strong rebound this year — a turnaround Biden pointed to in his address to a joint session of Congress on Wednesday night.
"The International Monetary Fund is now estimating our economy will grow at a rate of more than 6% this year," Biden said. "That will be the fastest pace of economic growth in this country in nearly four decades. America is moving, moving forward."
Swonk at Grant Thornton said the economy could grow at its fastest rate since 1984.
The jump in demand is already straining factories and transportation networks and triggering shortages of lumber, steel and computer chips.
"The bottlenecks are everywhere," Swonk said.
The Federal Reserve expects somewhat higher inflation this year but insists it's not concerned that prices will spiral out of control.
"During this time of reopening we are likely to see some upward pressure on prices," Fed chairman Jerome Powell said Wednesday. "But those pressures are likely to be temporary."
The tourism and entertainment industries are hoping for a recovery during the spring and summer as pandemic restrictions are eased and more people feel comfortable doing things that were off-limits for much of the past year.
"You have a lot of people with some pretty robust savings, itching to get back to former pastimes like going to a movie or traveling," Richardson said. "Those hard-hit industries have the most to gain from the safe reopening of the U.S. economy."
While gross domestic product is expected to bounce back to its pre-pandemic level this spring, the labor market will take longer to recover. Of the 22 million jobs that were lost last year, employers have yet to restore more than 8.4 million.
What's more, million of people have dropped out of the workforce during the pandemic. Some are worried about returning to jobs so long as the virus is still spreading rapidly.
"Fear is a real factor here," Swonk said.
Other people are unable to work because they are busy caring for sick relatives or for children whose schools have yet to reopen.
"That makes it harder for working parents, particularly single moms," Swonk said.
As of mid-April, some 16.5 million Americans were receiving some form of unemployment assistance. More than 5.6 million of those were on extended benefits for people who have been out of work more than six months.
"That is concerning because the longer you're out of the workforce, the harder it is to get back in," Richardson said. "The scarring is there. And how long it will take to work off those scars is still a big question hanging over the labor market."
April 16, 2021
Signs Of Economic Boom Emerge As Retail Sales Surge, Jobless Claims Hit Pandemic Low
Signs of an economic boom are emerging as Americans open up their wallets to spend freely.
Retail sales soared 9.8% in March, according to a report Thursday from the Commerce Department. The increase follows a 2.7% slump in February, which analysts blamed partly on severe winter weather.
The surge is being fueled by shoppers flush with cash from $1,400 dollar relief payments, and in some cases, by the feeling of newfound security from a fresh vaccine.
The solid sales numbers helped push the stock market to new, record highs. The Dow Jones Industrial rose 305 points or 0.9% Thursday, while the S&P 500 index rose 1.1%.
Hope about the economy was further reinforced after data showed the number of Americans filing new state unemployment claims last week dropped to 576,000, a decrease of 193,000 from the previous week.
That was the lowest since the week ended March 14, 2020, when the pandemic starting gripping the United States.
"At long last the economic recovery appears to be picking up speed," said Mark Hamrick, senior economic analyst at Bankrate, discussing the weekly claims report.
"Some employers are responding by boosting wages and even throwing in hiring bonuses. The job market should only tighten further in the months ahead, raising the prospect of further pay gains, particularly for entry level positions."
Claims for unemployment benefits under a federal program for gig workers and the self-employed also dropped last week to 132,000. As of March 27, 16.9 million people were receiving some form of unemployment assistance — 1.2 million fewer than the previous week.
Although the impact of the stimulus checks will fade, the optimism sparked by the rollout of the vaccines is raising hopes about the economy, even as the country continues to experience coronavirus infections.
Economists had previously predicted a "Biden boom," or a surge in spending that would take place once shoppers felt confident enough to start venturing out after months cooped up at home.
And the reports on Thursday showed evidence of that.
Sales of new clothes, sporting equipment and restaurant meals were especially strong in March, while online sales — a defining feature of pandemic isolation — rose by a comparatively modest 6%.
"There was definitely a pent-up demand to get out of the house," said Wayne Grantham, president of All Star Sports in Florence, S.C. "Whether it was baseball or soccer or hunting or fishing, I know across the board, outdoor activities have been well-received."
Higher consumer spending is likely having a beneficial impact across the economy.
"You see the economy opening," Federal Reserve Chairman Jerome Powell said Wednesday in remarks to the Economic Club of Washington. "I think we are going into a period of faster growth and higher job creation and that's a good thing."
There are still caution flags, however. New coronavirus infections jumped more than 11% in the last two weeks, and Powell cautioned that the rise of more contagious variants could upend the economic recovery.
"That's something we need to be careful about," Powell said. "I think we'd be wise to keep wearing masks and being socially distant at least for a while longer."
Subscribe to:
Posts (Atom)