THE DAILY NEWS

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THE HILL

"Kinzinger on Meijer defeat: ‘Democrats own that’"


Lexi Lonas

3 AUGUST 2022

Republican Rep. Adam Kinzinger (Ill.) blamed Democrats on CNN’s “New Day” Wednesday after moderate GOP Rep. Peter Meijer (Mich.) was defeated in his primary election by a Trump-endorsed candidate.

Meijer, who voted to impeach former President Trump after the 2021 Capitol attack, lost to Trump-backed challenger John Gibbs on Tuesday, after the Democratic Congressional Campaign Committee (DCCC) spent hundreds of thousands of dollars on ads supporting Gibbs.

Meijer’s race was among a number of primaries in which the Democratic campaign arms spent money on Trump-backed candidates, a strategy seemingly aiming to make it easier for Democrats to win general elections.


“I mean, the DCCC needs to be ashamed of themselves,” Kinzinger said.

“If Peter’s opponent wins and goes on in November to win, the Democrats own that."

"Congratulations,” he continued.

“Here’s the thing, don’t keep coming to me asking where are all the good Republicans that defend democracy and then take your donors’ money to spend half a million dollars promoting one of the worst election deniers that’s out there.”

Although some Democrats have spoken out against the DCCC’s strategy, top Democratic officials such as Speaker Nancy Pelosi (D-Calif.) have come out in favor of the tactic.

“The political decisions that are made out there are made in furtherance of our winning the election,” Pelosi said last week, “because we think the contrast between Democrats and Republicans — as they are now — is so drastic that we have to win.”


Meijer’s defeat is another win for Trump, who has made a midterm priority out of getting Republicans out of office who publicly opposed him following the Jan. 6 Capitol riot.

Meijer said Democrats disregarded “certain moral limits” in politics when backing his opponent.

“If successful, Republican voters will be blamed if any of these candidates are ultimately elected, but there is no doubt Democrats’ fingerprints will be on the weapon,” Meijer said in an essay posted online Monday.

https://www.msn.com/en-us/news/politics ... 39cdae3a9c
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THE WASHINGTON EXAMINER

"Wray says he finds allegations FBI mishandled Hunter Biden info 'deeply troubling'"


Jerry Dunleavy

4 AUGUST 2022

FBI director Christopher Wray testified he found it “deeply troubling” when he read recent whistleblower allegations that bureau agents had falsely labeled accurate information about Hunter Biden as disinformation during the FBI’s investigation in 2020.

Whistleblower allegations emerged last month that FBI supervisory intelligence agent Brian Auten opened an assessment in Aug. 2020, which was used by FBI headquarters to wrongly label accurate information about President Joe Biden’s son as false, according to disclosures made public by Sen. Chuck Grassley (R-IA), while a whistleblower said FBI assistant special agent in charge of the Washington Field Office, Timothy Thibault, shut down a line of inquiry into Hunter Biden in Oct. 2020 despite some of the details being known to be true at the time.


“I want to be very careful not to interfere with ongoing personnel matters,” Wray said when asked about this by Sen. John Kennedy (R-LA) during a Senate Judiciary Committee hearing Thursday.

“I should say that when I read the letter that describes the kinds of things that you’re talking about, I found it deeply troubling.”

Auten “opened an assessment which was used by a FBI Headquarters team to improperly discredit negative Hunter Biden information as disinformation,” according to Grassley, and that “in at least one instance, verified and verifiable derogatory information on Hunter Biden was falsely labeled as disinformation.”

A whistleblower also said Thibault “ordered closed” an “avenue of additional derogatory Hunter Biden reporting," according to Grassley, even though “all of the reporting was either verified or verifiable via criminal search warrants.”

Thibault, who investigated public corruption in the nation’s capital, may have violated the Hatch Act over his social media posts criticizing then-President Donald Trump and then-Attorney General Barr in 2020, according to DOJ inspector general Michael Horowitz last month.


“The investigation that you’re referring to… is being run out of our Baltimore office working with the Delaware U.S. attorney,” Wray said when asked if Thibault was or is working on the Hunter Biden investigation.

Wray added: “I will tell you that what you’re describing is not representative of the FBI that I see up close every day in this country, where I see patriots working their tails off with tremendous integrity and objectivity.”

Auten was involved in the Trump-Russia investigation, interviewing Igor Danchenko, the alleged main source for British ex-spy Christopher Steele’s dossier, in 2017.

Auten had been referred by Wray for potential disciplinary action following the release of DOJ Inspector General Michael Horowitz's 2019 Foreign Intelligence Surveillance Act abuse report, though Wray said those proceedings were slowed down to cooperate with special counsel John Durham’s criminal investigation.


https://www.msn.com/en-us/news/politics ... 1a5566e023
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CNN

"Cheney says DOJ not prosecuting Trump if there's evidence could call into question the US as 'nation of laws'"


Eric Bradner

4 AUGUST 2022

Wyoming Rep. Liz Cheney said if the Justice Department does not prosecute former President Donald Trump for his role in the insurrection at the US Capitol and “the facts and the evidence are there,” the decision could call into question whether the United States can “call ourselves a nation of laws.”

In an interview with CNN’s Kasie Hunt, Cheney – the GOP vice chair of the House select committee investigating the events surrounding the January 6, 2021, insurrection – said Trump is “guilty of the most serious dereliction of duty of any president in our nation’s history” and pointed to a judge who’s said he likely committed crimes.


She said the House committee is “going to continue to follow the facts."

"I think Department of Justice will do that."

"But they have to make decisions about prosecution.”

“Understanding what it means if the facts and the evidence are there, and they decide not to prosecute – how do we then call ourselves a nation of laws?"

"I think that’s a very serious, serious balancing,” Cheney said.

“The question for us is, are we a nation of laws?"

"Are we a country where no one is above the law? "

"And what do the facts and the evidence show?” Cheney said.


She sidestepped questions about whether Trump being prosecuted by President Joe Biden’s Justice Department would only add to his strength with the Republican Party’s base ahead of the 2024 presidential bid that Trump has repeatedly teased.

“I don’t think that it’s appropriate to think about it that way,” said Cheney, who’s facing a Trump-backed challenger in a primary later this month.

She alluded to Judge David Carter, a federal judge in California who ordered right-wing attorney John Eastman to turn over 101 emails from around January 6, 2021, writing in March that he “finds it more likely than not that President Trump corruptly attempted to obstruct the Joint Session of Congress on January 6, 2021.”

“I think he’s guilty of the most serious dereliction of duty of any president in our nation’s history,” Cheney said of Trump.

“You’ve had a federal judge in California say that it’s more likely than not that he and John Eastman committed two crimes.”

Cheney’s comments come as the House panel prepares for a busy August.

A committee spokesperson also said last week that the committee intended to share 20 transcripts with the Justice Department, a move that comes as the department’s criminal investigation into January 6 is heating up.

The House committee is preparing to release its final report ahead of November’s midterm elections.

Cheney faces a series of Trump-aligned challengers in her August 16 primary, including the Trump-endorsed Harriet Hageman, a former Wyoming national Republican committeewoman who has advanced conspiracy theories about the 2020 election.

Cheney is the daughter of former Vice President Dick Cheney.

Her reelection campaign unveiled an ad on Thursday in which the former vice president lays into Trump over his lies about widespread fraud in the 2020 election.

“He tried to steal the last election using lies and violence to keep himself in power after the voters had rejected him,” the former vice president says in the spot.

“He is a coward."

"A real man wouldn’t lie to his supporters."

"He lost his election and he lost big."

"I know it, he knows it and, deep down, I think most Republicans know it,” Dick Cheney adds.

Liz Cheney wouldn’t say whether her father has urged her to run for president in 2024.

“Look, Dick Cheney is a big Liz Cheney supporter,” she said.

She said the former vice president shares “this real sadness, frankly, about what’s happening to our party, and a real despair about how it could be that so many Republicans would refuse to stand up and tell the truth.”

“And it is a scary moment for the nation,” she added.

Cheney says more to come from the committee this fall

Liz Cheney, who has courted Democratic voters in Wyoming’s primary, said she doesn’t see the House committee’s work through the lens of political outcomes.

Cheney said the House panel will continue to lay out evidence in the coming months and that she expects the committee to “have an opinion” about making criminal referrals to the Justice Department.

“There’s much more that we have not yet shared in hearings and that we anticipate we will share in the fall,” she said.

“And we will also make decisions about criminal referrals."

"And ultimately, the decision about prosecution’s up to the Justice Department."

"But I would anticipate that the committee will have an opinion on it.”


Cheney said that during the committee’s probe, she has learned that Trump’s effort to block the 2020 election results were “a more sophisticated and broader-reaching effort than I understood coming into it.”

“I think all of us on the committee have had that same reaction, which is that there’s so much, there was so much more that was happening in multiple different areas, whether it was the pressure on state officials or the pressure on the Justice Department” or efforts to push former Vice President Mike Pence to reject some states’ electoral votes.

“The volume of information has been more than I expected,” she said.

Cheney praised Pence for rejecting the pressure from Trump.

She said Pence, who, as vice president oversaw the session of Congress in which electoral votes were officially counted, “was a hero on January 6.”

“It’s very clear that there was tremendous pressure from a number of different places on him."

"And he did his duty and he didn’t succumb to that pressure and if he had succumbed to that pressure, things would have been very different,” she said.

“And so I think that that we owe him gratitude for how he conducted himself and for his refusal to do what Donald Trump wanted him to do, which would have been illegal.”

Cheney faces voters on August 16

Cheney said she expects to win her primary in less than two weeks, despite her opponents attacking her role on the committee.

“I don’t expect to lose."

"I’m working hard to earn every single vote and, ultimately, I really believe that the people of Wyoming fundamentally understand how important fidelity to the Constitution is; understand how important it is that we fight for those fundamental principles on which everything else is based,” she said.

However, the congresswoman also made clear that she is not tempering her criticism of Trump at all – even if it costs her the House seat that her father held and that she has held since 2017.

“We’re in a situation where former President Trump has betrayed the patriotism of millions and millions of people across our country, and many people here in Wyoming, and he’s lied to them,” she said.

“And what I know to do is to tell the truth, and to make sure that people understand the truth about what happened and why it matters so much.”

Asked why she thinks voters believe Trump, Cheney added: “It’s just consistent lying about what happened about the election, playing on people’s patriotism."

"And he’s so dangerous that, you know, my view is that at the end of the day, if defending the Constitution against the threat that he poses means losing a House seat, then that’s a sacrifice that I’m willing to make."


"I don’t intend to lose."

"But some things are more important than any individual office or political campaign.”

Cheney would not discuss her political plans after this month’s primary.

But she said she will do “whatever is necessary” to keep Trump from becoming the GOP presidential nominee for a third consecutive election in 2024.

She said she intends to be “a big part of making sure that we protect the nation” from Trump, whether she wins reelection or not.


Cheney also urged members of both parties to band against GOP candidates who have advanced Trump’s lies about election fraud and are seeking to take over the election machinery of key states this fall.

Republicans in recent months have nominated candidates who have embraced Trump’s lies about election fraud for offices that control the election machinery in a series of states, including some of the nation’s most competitive presidential battlegrounds: Arizona, Nevada and Pennsylvania.

The party has also endorsed an election denier for the top elections post in Michigan.

“I don’t think anybody should vote for any election denier,” Cheney said.

She cast defeating those candidates as critical to stopping Trump from circumventing the will of American voters if he is nominated for president in 2024.

“I think we have to make sure that we come together and form alliances across party lines, to make sure that the people that we are electing are not going to unravel the republic,” she said.

Cheney lambasted Democrats for meddling in GOP primaries to boost election deniers that they think will be less viable general election candidates, as was the case in the primary defeat this week of Republican Rep. Peter Meijer of Michigan, one of the 10 Republicans in the House who voted to impeach Trump following the insurrection.

The Democratic Congressional Campaign Committee pumped more than $300,000 into television ads to boost Trump-endorsed John Gibbs against him.

Cheney said Democrats’ involvement in the race was “terrible.”

“All of us, again, across party lines, have got to make sure that we are supporting people who believe fundamentally in our democratic system,” she said.

“And so I think that it’s inexplicable and wrong for the Democrats to be funding election deniers, particularly against one of the 10 Republicans who so bravely stood up and did the right thing.”

https://www.msn.com/en-us/news/politics ... 408ffee2f7
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FOX NEWS

"South Korean president skips in-person meeting with Pelosi, causing controversy"


Mitch Shin

4 AUGUST 2022

House Speaker Nancy Pelosi wrapped up her two-day visit to Seoul on Thursday, but her non-in-person meeting with the president has led to controversy among South Koreans.

Pelosi is the first sitting speaker to visit South Korea since Dennis Hastert visited Seoul in 2002.

She met her counterpart, Kim Jin-pyo, the speaker of the National Assembly, and agreed to support both governments’ efforts to achieve denuclearization and peace on the peninsula under strong deterrence against North Korea.

However, public criticism has soared over South Korean President Yoon Suk-yeol — who skipped an in-person meeting with Pelosi due to his being on his summer vacation in his nation's capital, Seoul.

Despite her official visit to Seoul, the South Korean presidential office gave several responses over the meeting with Pelosi.

Initially the president's office told reporters that the meeting between Yoon and Pelosi was not arranged because of Yoon’s scheduled summer vacation.

Then it suddenly said that it was coordinating with Pelosi’s office to arrange a meeting, but then reversed its announcement again, saying there was no coordination between the two offices.

Although Yoon has been staying at his home in Seoul, his office finally confirmed on Thursday that the two would have a phone call and not a face-to-face meeting.

The call between the two lasted 40 minutes.

Earlier on the trip, she met with the leaders of Singapore, Malaysia and Taiwan before she arrived in Seoul.

She is also expected to have a meeting with Japanese Prime Minister Fumio Kishida on Friday.

Choi Young-bum, the senior presidential secretary for public relations, said the decision not to have a meeting with Pelosi was made based on "the national interest."

However, the official refused to answer further questions from reporters on what "the national interest" referred to in this situation.

Adding to the controversy was when Pelosi's delegation arrived at Osan Air Base on Wednesday where a photo showed the absence of Seoul officials welcoming her and the delegation on-site.

Choi said that Pelosi’s counterpart, the National Assembly speaker, was the one who should have been responsible for holding a welcoming ceremony.

He also claimed that Pelosi’s office turned down a ceremony given her delegation’s late-night arrival on Wednesday.

Pelosi’s office has not yet made a statement over the controversies arising from the criticism aimed at the South Korean president by many in the public there.

https://www.msn.com/en-us/news/world/so ... 408ffee2f7
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RIGZONE

"Oil and Gasoline Futures Down Over 10% on the Week"


by Bloomberg | Julia Fanzeres

Friday, August 05, 2022

Oil posted the biggest weekly decline since early April on growing signs that a global economic slowdown is curbing demand.

Prices are near the lowest level in six months.

West Texas Intermediate settled at $89 a barrel, ending the week nearly 10% lower.

US gasoline consumption has dropped, stoking demand concerns, while low liquidity has added to volatility.

Supplies from Libya also picked up, helping to shrink key oil futures time-spreads and ease the tightness in the market.

The pullback is evident across the oil market.

Gasoline futures are down 18% this week.

Meanwhile, physical oil differentials have narrowed and Brent’s prompt spread -- the difference between its two nearest contracts and a gauge of supply -- shrunk to $1.73 a barrel in backwardation, down from more than $6 a week ago.

“Crude broke several technical levels in a week that has been a bloodbath for super-cycle believers,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.

“The action, however, indicates that this was more of a buyers’ strike than meaningful position reduction, as buyers are content to sit on the sidelines until the broader narrative around demand improves.”

After surging in the first five months of the year, crude’s rally has been thrown into reverse, with losses deepening this month after declines in June and July.

The selloff, which has been exacerbated by below-average trading volumes, may alleviate some of the inflationary pressures coursing through the global economy that have spurred central banks including the US Federal Reserve to hike rates.

Prices:

WTI for September delivery rose 47 cents to settle at $89.01 a barrel in New York.

Brent for October settlement gained 80 cents to settle at $94.92 a barrel.

The shift to tighter monetary policy has stoked concern among investors that growth will slow, imperiling the outlook for energy usage.

The Bank of England warned that the UK is heading for more than a year of recession as it raised borrowing costs, while in the US, a procession of Federal Reserve speakers pledged to continue an aggressive fight to cool inflation.

China has also shown signs of weakness, clouding the outlook for crude consumption in the top importer.

Recent data showed factory activity shrank, while China Beige Book International warned the economy was deteriorating.

Still, there were some signs of bullishness with Saudi Arabia this week boosting its prices, and OPEC+ warning of scant spare capacity.

Saudi Aramco increased its Arab Light grade for next month’s shipments to Asian refineries to a record $9.80 a barrel above the Middle Eastern benchmark.

Traders and refiners had expected an even bigger jump.

(With Grant Smith and Alex Longley)

https://www.rigzone.com/news/wire/oil_a ... 6-article/
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CNBC

"U.S. 10-year Treasury yield jumps after jobs growth blows past expectations"


Carmen Reinicke @CSREINICKE Silvia Amaro @SILVIA_AMARO

PUBLISHED FRI, AUG 5 2022

The 10-year Treasury yield rose on Friday on the back of a stronger-than-expected jobs report for July.

At about 4:10 pm ET, the yield on the 10-year Treasury was at 2.83%, and the yield on the 30-year Treasury bond was up 10 basis points and trading at 3.068%.

Meanwhile, the 2-year was up 20 basis points to 3.242%.

Yields move inversely to prices.

The data showed nonfarm payrolls increase 528,000 last month and surpassed Dow Jones’ expectations of 258,000.

At the same time, wage growth rose with average earnings climbing 0.5% for the month and 5.2% over last year.

The stronger than anticipated report showed that the U.S. is likely not in a recession.

Friday’s move marks a reversal from the recent trend, which saw the 10-year yield trending lower on fears the Fed’s hiking campaign was tipping the economy into a recession.

Earlier this week, the 10-year yield fell to 2.50% and its lowest since April, according to FactSet.

Investors are closely monitoring the health of the U.S. economy after recent numbers showed a second consecutive negative gross domestic product reading.

As a result, upcoming data releases related to the labor market will be highly anticipated by many money managers.

Cleveland Fed President Loretta Mester on Thursday said the Federal Reserve plans to keep raising interest rates into 2023, in another sign that the central bank does not yet see an economic recession.

https://www.cnbc.com/2022/08/05/us-trea ... ssion.html
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REUTERS

"TREASURIES -U.S. yields advance broadly as strong payrolls reinforce continued Fed tightening"


By Gertrude Chavez-Dreyfuss

AUGUST 5, 2022

* U.S. 2-year yield hits two-week high

* U.S. 2/10 yield hits deepest inversion since August 2000

* U.S. rate futures price in 69% chance of 75 bps hike in Sept


NEW YORK, Aug 5 (Reuters) - U.S. Treasury yields rose sharply on Friday after data showed the world's largest economy created far more jobs than expected in July, bolstering expectations the Federal Reserve will continue to raise interest rates in the next few meetings to slow inflation.

The rise in U.S. Treasury yields, from two-year notes to 30-year bonds, ranged from 10 to 22 basis points (bps).

A closely watched part of the U.S. Treasury yield curve inverted by as much as -45 bps on Friday, the deepest inversion since August 2000, as investors priced in a 75-bps Fed rate hike next month after the strong payrolls number.

The curve was last inverted by -41 bps.

The inversion of this yield curve preceded the last eight U.S. recessions, analysts said.

The latest jobs report, though, suggested that the U.S. economy is nowhere near recession right now.

Data showed U.S. nonfarm payrolls increased by 528,000 jobs last month.

The number for June was revised slightly higher to show 398,000 jobs created instead of the previously reported 372,000.

Average hourly earnings, a gauge of wage inflation and a key metric tracked by the Fed, climbed 0.5% after rising 0.4% in June, the data showed.

That left the year-on-year increase in wages at 5.2%, compared with forecasts for a 4.9% rise.

"Another very strong payrolls report is going to put the Fed firmly back on their hawkish path," wrote PIMCO economists Tiffany Wilding and Allison Boxer.

"Wage inflation was again firm: a sign that core price inflation will remain sticky despite some relief in food and energy prices over the coming months."

"A 75-basis-point rate hike in September is now likely to be the base case for Fed officials, as they pull forward additional hikes in 2022 yet again," they added.

U.S. rate futures have priced in a 69% chance of a 75 bps hike, up from about 41% before the payrolls data.

Futures traders have also factored in a fed funds rate of 3.57% and additional tightening of around 122 bps by the end of the year.

In afternoon trading, the yield on 10-year Treasury notes was up 15 bps at 2.8287%.

On the week, 10-year yields climbed 18 bps, the largest increase in one month.

U.S. 30-year bond yields rose nearly 10 bps to 3.0605%.

It advanced to two-week peaks of 3.106% on the day.

On a weekly basis, 30-year yields were up nearly 9 bps, a one-month high.

At the short end of the curve, the U.S. two-year yield, which typically tracks interest rate expectations, hit a two-week high of 3.25% and was last up 20.7 bps at 3.2442%.

This yield rose 34 bps this week, the biggest weekly rise in about two months.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by David Goodman, David Holmes and Cynthia Osterman)

https://www.reuters.com/article/usa-bon ... SL1N2ZH1Y3
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REUTERS

"S&P 500 dips, Treasury yields rise and dollar rallies following robust U.S. jobs report"


By Stephen Culp

August 5, 2022

NEW YORK, Aug 5 (Reuters) - The S&P 500 headed lower, Treasury yields advanced and the dollar rose on Friday after the U.S. July employment report blasted past expectations, raising the odds of continued monetary tightening from the Federal Reserve.

Wall Street pared losses as the session progressed.

At close, the Nasdaq joined the bellwether index in the red and the blue-chip Dow reversed course to end in positive territory.

Benchmark U.S. Treasury yields and oil prices headed higher as the stronger-than-expected payrolls data appeared to confirm the economy is not yet in recession, which increased the likelihood of more aggressive rate increases from the Fed in September.

The employment report "telegraphed some work needs to be done on the Fed’s side, regarding their interest rate policy," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

"That was certainly the market’s initial reaction."

The Labor Department's employment report showed the U.S. economy added 528,000 jobs in July, more than double the 250,000 expected, while wage inflation remained hot and the participation rate edged lower.

"The payrolls number are wonderful from a demand standpoint, more people being paid is great for the economy," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York.

Evidence of economic strength helped ease risk aversion as the week drew to a close.

"The employment data raises the prospect of a soft landing," Keator said, adding that Fed Chair Jerome Powell has "pointed to the fact that a strong labor market has not historically accompanied recessions."

The Dow Jones Industrial Average rose 76.65 points, or 0.23%, to 32,803.47, the S&P 500 lost 6.75 points, or 0.16%, to 4,145.19 and the Nasdaq Composite dropped 63.03 points, or 0.5%, to 12,657.56.

European shares fell after the U.S. jobs data stoked expectations of continued hawkish Fed policy.

The pan-European STOXX 600 index lost 0.76% and MSCI's gauge of stocks across the globe shed 0.20%.

Emerging market stocks rose 0.75%.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.61% higher.

U.S. Treasury yields rose and a closely watched part of the yield curve touched its deepest inversion since August 2000 on increased odds of another 75 basis point interest rate hike from the central bank in September.

Benchmark 10-year notes last fell 42/32 in price to yield 2.8287%, from 2.676% late on Thursday.

The 30-year bond last fell 65/32 in price to yield 3.0662%, from 2.961% late on Thursday.

The dollar rallied against a basket of currencies in the wake of the employment report.

The dollar index rose 0.84%, with the euro down 0.63% to $1.0178.

The Japanese yen weakened 1.57% versus the greenback at 135.02 per dollar, while sterling was last trading at $1.2067, down 0.74% on the day.

While crude prices advanced on the prospect of strong demand, they wrapped up the week near multi-month lows due to lingering recession fears.

U.S. crude rose 0.53% to settle at $89.01 per barrel, while Brent settled at $94.92 per barrel, up 0.85% on the day.

Gold dipped as waning recession fears tarnished the safe-haven metal's luster.

Spot gold dropped 1.0% to $1,772.82 an ounce.

Reporting by Stephen Culp in New York; Additional reporting by Elizabeth Howcroft in London; Editing by Chizu Nomiyama and Matthew Lewis

https://www.reuters.com/markets/europe/ ... 022-08-05/
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CNBC

"Use of credit cards, personal loans surges, but ‘it’s not a red flag,’ expert says"


Jessica Dickler @JDICKLER

PUBLISHED FRI, AUG 5 2022

KEY POINTS

* The number of consumers with credit cards and personal loans reached record highs in the second quarter of 2022, driven by an increase in loans to subprime borrowers, according to the latest credit report from TransUnion.

* Delinquencies are also back near pre-pandemic levels.

* But as long as people have jobs, “I’m not seeing anything that I would really declare as a red flag,” TransUnion’s Michele Raneri said.


There’s no doubt Americans are falling deeper in debt.

As prices jump across the board, consumers are increasingly relying on credit cards to make ends meet.

The number of people with credit cards and personal loans hit record highs in the second quarter of 2022, according to TransUnion’s latest credit industry insights report released Thursday.


The tally of total credit cards exceeded 500 million for the first time ever, led by originations among Generation Z, or adults ages 18 to 25.

Overall, an additional 233 million new credit accounts were opened in the second quarter, the most since 2008, according to a separate report from the Federal Reserve Bank of New York.

Credit card balances also jumped 13% during the second quarter, the largest year-over-year increase in more than 20 years.

Still, experts say the jump in usage alone isn’t a sign of trouble.

“I’m not seeing anything that I would really declare as a red flag,” according to Michele Raneri, TransUnion’s vice president of U.S. research and consulting.

‘Delinquencies are ticking up’

As the number of credit card accounts in the U.S. rises, more new customers are subprime borrowers, generally meaning those with a credit score of 600 or below, according to TransUnion, in part because of the flood of younger borrowers gaining access to credit cards.

At the same time, “delinquencies are ticking up and approaching what they were before the pandemic,” said Raneri.

“But that doesn’t necessarily mean that it’s bad.”


As lenders expanded access, delinquencies rose but remained near “normal” levels, the report found.

TransUnion defines a delinquency as a payment that’s 60 days or more overdue.

Employment is ‘the strongest indicator’ of repayment

“The strongest indicator of whether somebody can pay their bills or not is whether they have a job,” according to Raneri.

The July jobs report showed that the labor market remains strong despite other signs of economic weakness.

The unemployment rate dropped to its lowest level since 1969 and average hourly earnings are up 5.2% year over year.

“Consumers are facing several challenges that are impacting their finances on a day-to-day basis, namely high inflation and rising interest rates,” Raneri said.

“These challenges, though, are happening against a backdrop where employment opportunities are still plentiful and jobless levels remain low.”

As long as “people have jobs,” she added, “they can figure out more of the day to day.”

Data also provided by Reuters

https://www.cnbc.com/2022/08/05/credit- ... ation.html
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REUTERS

"U.S. labor market defies recession fears as job growth surges in July"


By Lucia Mutikani

August 5, 2022

Summary

* Nonfarm payrolls increase 528,000 in July

* Unemployment rate falls to 3.5% from 3.6% in June

* Average hourly earnings rise 0.5%; up 5.2% year-on-year

* Participation rate falls to 62.1% from 62.2% in June


WASHINGTON, Aug 5 (Reuters) - U.S. job growth unexpectedly accelerated in July, lifting the level of employment above its pre-pandemic level and pouring cold water on fears the economy was in recession.

The Labor Department's closely watched employment report on Friday also showed employers continuing to raise wages at a strong clip and generally maintaining longer hours for workers.

The sustained labor market strength could give the Federal Reserve the latitude to keep aggressively hiking interest rates.

"If the U.S. economy is in a recession, no one seems to have told employers," said Sarah House, a senior economist at Wells Fargo in Charlotte, North Carolina.

"We suspect this data will give the Fed the confidence it needs to push ahead aggressively with its fight against inflation."

Nonfarm payrolls increased by 528,000 jobs last month, the largest gain since February, the survey of establishments showed.

Data for June was revised higher to show 398,000 jobs created instead of the previously reported 372,000.

July marked the 19th straight month of payrolls expansion, and blew off economists' expectations for a gain of only 250,000 jobs.

Estimates in the Reuters survey for the number of jobs gained ranged from a low of 75,000 to a high of 325,000.

The labor market has now recouped all the jobs lost during the COVID-19 pandemic, though government employment remains about 597,000 jobs in the hole.

Overall employment is now 32,000 jobs higher than in February 2020.

It took just under 2-1/2 years to recover all the jobs compared to at least six years after the 2007-2009 Great Recession.

The Fed last week raised its policy rate by three-quarters of a percentage point and officials have pledged more hikes are coming as the U.S. central bank tries to rein in inflation.

Annual consumer prices are rising at their fastest pace in four decades.

Since March, the Fed has lifted its benchmark overnight interest rate from near zero to a range of 2.25% to 2.50%.

"The Fed is looking increasingly likely to be able to maintain its current trajectory without constantly looking over its shoulder, making it the envy of world economies who are all enduring the same knife-edge balancing act at the moment," said James Bentley, a company director at Financial Markets Online.

U.S. gross domestic product declined in the first and second quarters, meeting the standard definition of a recession.

The economy's 1.3% contraction in the first half of the year was mostly because of big swings in inventories and the trade deficit tied to snarled global supply chains.

The National Bureau of Economic Research, the official arbiter of recessions in the United States, defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators."

But even with July's robust jobs gains, some cracks are forming in the labor market.

Businesses in the interest-rate-sensitive housing, finance, technology and retail sectors are laying off workers.

Still, with 10.7 million job openings at the end of June and 1.8 openings for every unemployed person, a sharp deceleration in payrolls growth is unlikely this year.


Stocks on Wall Street were trading lower.

The dollar rallied against a basket of currencies.

U.S. Treasury prices fell.

WIDESPREAD GAINS

The broad job gains last month were led by the leisure and hospitality industry, which added 96,000 positions, most of them at restaurants and bars.

But leisure and hospitality employment remains down by 1.2 million from its February 2020 level.

Professional and business services payrolls increased by 89,000, while the healthcare sector added 70,000 jobs.

Government employment jumped by 57,000 jobs, boosted by local government education.

Construction added 32,000 jobs while manufacturing payrolls increased by 30,000.

Details of the household survey from which the unemployment rate is derived were mixed.

While the unemployment rate fell to its pre-pandemic low of 3.5% from 3.6% in June, that was because 63,000 people left the labor force.

The workforce has now declined for two straight months.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, edged down to 62.1% from 62.2% in June.

That mostly reflected a drop in participation by teenagers.

The prime-age population's participation rate ticked up to 82.4% from 82.3% in June.

The employment-population ratio for this cohort rebounded to 80%, consistent with full employment.

The number of people working part-time for economic reasons increased by 303,000 to 3.9 million after plunging to more than a 20-year low in June.

But household employment rebounded by 179,000 jobs after falling 315,000 in June, and the number of people experiencing long spells of unemployment dropped 269,000 to 1.1 million, the lowest level since April 2020.

These long-term unemployed accounted for 18.9% of the 5.7 million unemployed in July.

With the labor market tightening further, average hourly earnings increased 0.5% after rising 0.4% in June.

That left the year-on-year increase in wages at 5.2%.

The workweek was unchanged at 34.6 hours.

Wage gains were mostly driven by industries in the services sector, including leisure and hospitality, financial, and professional and business services.

A proxy for take-home pay surged 1.2% on a month-on-month basis, which bodes well for consumer spending amid declining gasoline prices.

"The risk to wage growth appears to be on the upside in the near term given the persistent strength of the labor market and the lack of a rebound in the labor supply," said Lydia Boussour, lead U.S. economist at Oxford Economics in New York.

Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao

https://www.reuters.com/markets/us/us-j ... 022-08-05/
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