REUTERS
"U.S. current account deficit jumps to 15-year high in third quarter"
By Lucia Mutikani
December 21, 2021
WASHINGTON, Dec 21 (Reuters) - The U.S. current account deficit surged to a 15-year high in the third quarter amid a record increase in imports as businesses rushed to replenish depleted inventories to meet strong demand.
The Commerce Department said on Tuesday that the current account deficit, which measures the flow of goods, services and investments into and out of the country, accelerated 8.3% to $214.8 billion last quarter.
That was the largest shortfall since the third quarter of 2006.
Data for the second quarter was revised to show a $198.3 billion deficit, instead of $190.3 billion as previously reported.
Economists polled by Reuters had forecast a $205.0 billion deficit last quarter.
The current account gap represented 3.7% of gross domestic product.
That was the largest share since the fourth quarter of 2008 and was up from 3.5% in the April-June quarter.
Still, the deficit remains below a peak of 6.3% of GDP in the fourth quarter of 2005 as the United States is now a net exporter of crude oil and fuel.
The wider deficit is not a problem for the United States given the dollar's status as the world's reserve currency.
The third quarter likely marked a peak for the current account gap, though much would depend on the severity of the COVID-19 Omicron variant.
The trade deficit narrowed sharply in October.
"Robust export growth in the fourth quarter suggests the balance has likely reached a cyclical trough and the latest trade data signals a narrower deficit in the fourth quarter," said Mahir Rasheed, a U.S. economist at Oxford Economics in New York.
"Assuming a moderate impact from the Omicron variant in the first quarter, we look for stronger foreign consumption and moderating U.S. demand to drive the current account deficit lower next year."
Imports of goods increased $10.0 billion to a record $716.4 billion, boosted by petroleum products and chemicals.
Services imports rose $12.6 billion to $141.0 billion, mostly reflecting personal travel as well as sea freight and air passenger transport.
Exports of goods advanced $4.8 billion to $441.6 billion, also a record high, driven by natural gas and petroleum products.
There were also increases in exports of medicinal, dental, and pharmaceutical products.
But exports of corn and soybeans fell.
Services exports fell $0.1 billion to $190.8 billion, pulled down by decreases in charges for licenses for the use of patents and trade secrets.
There were also declines in exports of telecommunications, computer and information services.
But professional and management consulting services increased.
Primary income receipts increased $17.9 billion to $281.9 billion, lifted by direct investment income as well as portfolio investment income amid a surge in equity prices.
Payments of primary income rose $8.6 billion to $233.7 billion, reflecting higher interest rates on long-dated debt securities.
Secondary income receipts climbed $0.1 billion to $41.6 billion, reflecting taxes on income and wealth.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/business/us-cur ... 021-12-21/
THE ECONOMY
Re: THE ECONOMY
CNBC
"Criminals have stolen nearly $100 billion in Covid relief funds, Secret Service says"
Eamon Javers @EAMONJAVERS Scott Zamost @SCOTTZAMOST
PUBLISHED TUE, DEC 21 2021
KEY POINTS
* Criminals have stolen close to $100 billion in pandemic relief funds, the U.S. Secret Service said Tuesday.
* The stolen funds were diverted by fraudsters from the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program and another program.
* Recovered funds include more than $400 million from PayPal and Green Dot Corporation.
* The government has shelled out about $3.5 trillion in Covid relief money since early 2020, when the pandemic began.
Criminals have stolen close to $100 billion in pandemic relief funds, the U.S. Secret Service said Tuesday.
The stolen funds were diverted by fraudsters from the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program and another program set up to dole out unemployment assistance funds nationwide.
More than $2.3 billion in stolen funds have been recovered so far, resulting in the arrest of more than 100 suspects who span the spectrum from individuals to organized groups, according to the agency.
The government has shelled out about $3.5 trillion in Covid relief money since early 2020, when the pandemic began.
The Secret Service, which specializes in financial fraud in addition to its better-known role in presidential protection, also announced the appointment of a new national pandemic fraud recovery coordinator to oversee its sprawling investigations into the enormous number of fraud cases resulting from all that theft.
“I’ve been in law enforcement for over 29 years and worked some complex fraud investigations for 20 plus years, and I’ve never seen something at this scale,” said Assistant Special Agent in Charge Roy Dotson, who was named to the new role at the agency.
Dotson, in an interview with CNBC, said the ease of obtaining the funds has made it easier for criminals.
“There’s no doubt that the programs were easily accessible online."
"And so, with that, comes the opportunity for bad actors to get into that mix,” he said.
“It was necessary to try to get these funds out to people that were truly hurting, and no fault of anybody.”
The Secret Service currently has more than 900 active investigations related to pandemic fraud, Dotson said.
“It’s a wide range because the pot was so big,” Dotson said.
“You not only have your typical transnational organized groups and domestic organized groups, criminal groups, but you have individuals that decided to take advantage of that."
"So, there’s many different patterns and investigative intelligence that we develop that I can’t really go into."
"But we’ve mapped out kind of some of the different characteristics of different groups.”
In his new role, Dotson. who is based in the Jacksonville field office, is also overseeing investigations related to cryptocurrency fraud.
In those cases, criminals typically persuade victims to transfer funds into crypto wallets which are used for illegal schemes or open bank accounts which are used to launder money.
“I would say the primary difficulty is the sheer scope of the amount of fraudulent you know, loans, or unemployment insurance benefits ever distributed,” he said.
“And the number of individuals that receive those, whether they were a money mule, or the actual recipient is just enormous.”
Among the recovered funds were hundreds of millions sent to Green Dot and PayPal, according to a Secret Service spokesperson.
“After the Secret Service alerted the private sector early on about the emerging fraud, numerous financial institutions proactively identified, investigated, and safeguarded against suspected fraudulent pandemic relief funds,” the spokesperson said.
“These private institutions then reached out to the Secret Service for further assistance."
"In coordination with companies like Green Dot Corporation and PayPal, the Secret Service was able to seize over $400 million in fraudulent funds.”
A Green Dot spokesperson said the company “does proactively bring fraud cases to the attention of the Secret Service as well as other government agencies and industry peers and partners with them to address, mitigate, and resolve them."
"Fraud prevention is paramount and we work around the clock and invest heavily to identify, block and address fraudulent activity as part of our commitment to protecting our customers.”
A PayPal spokesperson said the company takes “every instance of potential fraud very seriously and we proactively work with law enforcement agencies and industry partners, as well as use our own sophisticated systems, to detect fraud and keep our customers and their payments safe.”
The government quickly rolled out the Paycheck Protection Program and the Economic Injury Disaster Loan program last year to help small businesses.
Both programs have been plagued with problems.
A report from a Labor Department inspector general blamed inadequate controls for billions of dollars in potential fraud.
The fast rollout of the Pandemic Unemployment Assistance program made it easy prey for fraudsters.
The Labor Department’s Office of Inspector General, in a report released in March, said that at least $89 billion of the estimated $896 billion in unemployment program funds “could be paid improperly, with a significant portion attributable to fraud.”
CNBC confirmed earlier this year that tech-savvy fraudsters opened accounts with at least four online investment programs, according to law enforcement officials.
The digital platforms, investigators said, are easy to dump the money into by setting up accounts with stolen identities.
More than $100 million in fraudulent funds passed through investment accounts since Congress passed the CARES Act last March, according to authorities.
https://www.cnbc.com/2021/12/21/crimina ... rvice.html
"Criminals have stolen nearly $100 billion in Covid relief funds, Secret Service says"
Eamon Javers @EAMONJAVERS Scott Zamost @SCOTTZAMOST
PUBLISHED TUE, DEC 21 2021
KEY POINTS
* Criminals have stolen close to $100 billion in pandemic relief funds, the U.S. Secret Service said Tuesday.
* The stolen funds were diverted by fraudsters from the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program and another program.
* Recovered funds include more than $400 million from PayPal and Green Dot Corporation.
* The government has shelled out about $3.5 trillion in Covid relief money since early 2020, when the pandemic began.
Criminals have stolen close to $100 billion in pandemic relief funds, the U.S. Secret Service said Tuesday.
The stolen funds were diverted by fraudsters from the Small Business Administration’s Paycheck Protection Program, the Economic Injury Disaster Loan program and another program set up to dole out unemployment assistance funds nationwide.
More than $2.3 billion in stolen funds have been recovered so far, resulting in the arrest of more than 100 suspects who span the spectrum from individuals to organized groups, according to the agency.
The government has shelled out about $3.5 trillion in Covid relief money since early 2020, when the pandemic began.
The Secret Service, which specializes in financial fraud in addition to its better-known role in presidential protection, also announced the appointment of a new national pandemic fraud recovery coordinator to oversee its sprawling investigations into the enormous number of fraud cases resulting from all that theft.
“I’ve been in law enforcement for over 29 years and worked some complex fraud investigations for 20 plus years, and I’ve never seen something at this scale,” said Assistant Special Agent in Charge Roy Dotson, who was named to the new role at the agency.
Dotson, in an interview with CNBC, said the ease of obtaining the funds has made it easier for criminals.
“There’s no doubt that the programs were easily accessible online."
"And so, with that, comes the opportunity for bad actors to get into that mix,” he said.
“It was necessary to try to get these funds out to people that were truly hurting, and no fault of anybody.”
The Secret Service currently has more than 900 active investigations related to pandemic fraud, Dotson said.
“It’s a wide range because the pot was so big,” Dotson said.
“You not only have your typical transnational organized groups and domestic organized groups, criminal groups, but you have individuals that decided to take advantage of that."
"So, there’s many different patterns and investigative intelligence that we develop that I can’t really go into."
"But we’ve mapped out kind of some of the different characteristics of different groups.”
In his new role, Dotson. who is based in the Jacksonville field office, is also overseeing investigations related to cryptocurrency fraud.
In those cases, criminals typically persuade victims to transfer funds into crypto wallets which are used for illegal schemes or open bank accounts which are used to launder money.
“I would say the primary difficulty is the sheer scope of the amount of fraudulent you know, loans, or unemployment insurance benefits ever distributed,” he said.
“And the number of individuals that receive those, whether they were a money mule, or the actual recipient is just enormous.”
Among the recovered funds were hundreds of millions sent to Green Dot and PayPal, according to a Secret Service spokesperson.
“After the Secret Service alerted the private sector early on about the emerging fraud, numerous financial institutions proactively identified, investigated, and safeguarded against suspected fraudulent pandemic relief funds,” the spokesperson said.
“These private institutions then reached out to the Secret Service for further assistance."
"In coordination with companies like Green Dot Corporation and PayPal, the Secret Service was able to seize over $400 million in fraudulent funds.”
A Green Dot spokesperson said the company “does proactively bring fraud cases to the attention of the Secret Service as well as other government agencies and industry peers and partners with them to address, mitigate, and resolve them."
"Fraud prevention is paramount and we work around the clock and invest heavily to identify, block and address fraudulent activity as part of our commitment to protecting our customers.”
A PayPal spokesperson said the company takes “every instance of potential fraud very seriously and we proactively work with law enforcement agencies and industry partners, as well as use our own sophisticated systems, to detect fraud and keep our customers and their payments safe.”
The government quickly rolled out the Paycheck Protection Program and the Economic Injury Disaster Loan program last year to help small businesses.
Both programs have been plagued with problems.
A report from a Labor Department inspector general blamed inadequate controls for billions of dollars in potential fraud.
The fast rollout of the Pandemic Unemployment Assistance program made it easy prey for fraudsters.
The Labor Department’s Office of Inspector General, in a report released in March, said that at least $89 billion of the estimated $896 billion in unemployment program funds “could be paid improperly, with a significant portion attributable to fraud.”
CNBC confirmed earlier this year that tech-savvy fraudsters opened accounts with at least four online investment programs, according to law enforcement officials.
The digital platforms, investigators said, are easy to dump the money into by setting up accounts with stolen identities.
More than $100 million in fraudulent funds passed through investment accounts since Congress passed the CARES Act last March, according to authorities.
https://www.cnbc.com/2021/12/21/crimina ... rvice.html
Re: THE ECONOMY
REUTERS
"U.S. consumer confidence perks up; economy poised for stronger 2021 finish"
By Lucia Mutikani
December 22, 2021
Summary
* Consumer confidence index increases in December
* Plans to buy homes, autos and major appliances rise
* Existing homes sales increase 1.9% in November
* Third-quarter GDP growth revised up to 2.3%
WASHINGTON, Dec 22 (Reuters) - U.S. consumer confidence improved further in December, suggesting the economy would continue to expand in 2022 despite a resurgence in COVID-19 infections and reduced fiscal stimulus.
The survey from the Conference Board on Wednesday showed more consumers planned to buy a house and big-ticket items such as motor vehicles and major household appliances as well as go on vacation over the next six months.
Inflation concerns eased a bit and households remained upbeat about the labor market.
This will likely help to underpin consumer spending even as government income to households is diminishing.
President Joe Biden's signature $1.75 trillion domestic investment bill known as Build Back Better (BBB), which aims to expand the social safety net and tackle climate change, suffered a blow on Sunday when moderate Democrat Senator Joe Manchin said he would not support it.
That prompted economists to slash their growth estimates for next year.
"Consumers are bullish on 2022," said Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia.
"This is further evidence that consumer spending will keep rising and be the main factor fueling the expansion."
The Conference Board's consumer confidence index increased to a reading of 115.8 this month from an upwardly revised 111.9 in November.
Economists polled by Reuters had forecast the index rising to 110.8 from the previously reported reading of 109.5.
The cut-off date for the survey, which places more emphasis on the labor market, was Dec. 16.
Consumers' assessment of current business and labor market conditions was little changed, but their short-term outlook for income, business and labor market conditions was upbeat, which the Conference Board viewed as "setting the stage for continued growth in early 2022."
Consumers' inflation expectations over the next 12 months fell to 6.9% from a more than 13-year high of 7.3%.
Its so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, slipped to a still-high reading of 42.6 this month from 44.7.
This measure correlates to the unemployment rate from the Labor Department.
The share of consumers planning to buy a motor vehicle over the next six months increased.
Buying intentions for household appliances like washing machines, dryers and refrigerators also rose and more consumers were inclined to buy a house and go on vacation over the next six months.
The show of underlying strength as the nation confronts a winter wave of coronavirus infections, driven by the Delta and highly contagious Omicron variants is welcome news.
Surging infections could significantly curb growth in the first quarter.
Stocks on Wall Street were trading higher.
The dollar slipped against a basket of currencies.
U.S. Treasury prices were higher.
STRONG HOUSING DEMAND
The run of good news was extended by a second report from the National Association of Realtors showing existing home sales rose 1.9% to a seasonally adjusted annual rate of 6.46 million units in November.
But the housing market continues to be dogged by a severe shortage of homes for sale, which is keeping house prices elevated and squeezing first-time buyers out.
The median existing house price increased 13.9% from a year earlier to $353,900 in November.
First-time buyers accounted for 26% of sales last month, compared to 32% a year ago.
That was the smallest share since January 2014.
The reports added to October consumer spending data as well as a sharp narrowing of the trade deficit and steady rebuilding of inventories by businesses in suggesting the economy this year is on track to record its best performance since 1984.
A third report from the Commerce Department on Wednesday showed gross domestic product increased at a 2.3% annualized rate in the July-September quarter, revised up from the 2.1% rate estimated last month.
Growth last quarter was the slowest since the second quarter of 2020, when the economy suffered a historic contraction in the wake of stringent mandatory measures to contain the first wave of coronavirus cases.
The economy was restrained by a resurgence in coronavirus infections over summer, shortages of motor vehicles amid strained global supply chains as well as a decline in pandemic relief money from the government to businesses, households and state and local governments.
Growth was also hampered by Hurricane Ida, which devastated U.S. offshore energy production at the end of August.
"The recovery will end 2021 on a strong note, with strong household finances, rising employment, and an improved health backdrop, before Omicron arrived, supporting GDP growth above 7% in fourth quarter," said Oren Klachkin, lead U.S. economist at Oxford Economics in New York.
Fourteen out of 22 industries contributed to GDP growth in the third quarter.
Services industry output increased at a 3.9% rate, led by professional, scientific and technical services, finance and insurance, administrative and waste management, as well as accommodation and food services, and information.
That partly offset decreases in retail and wholesale trade.
Output in the goods-producing industries contracted at a 5.5% pace, reflecting a broad decline that was dominated by construction.
The government sector grew at a 5.1% rate, led by state and local governments.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-t ... 021-12-22/
"U.S. consumer confidence perks up; economy poised for stronger 2021 finish"
By Lucia Mutikani
December 22, 2021
Summary
* Consumer confidence index increases in December
* Plans to buy homes, autos and major appliances rise
* Existing homes sales increase 1.9% in November
* Third-quarter GDP growth revised up to 2.3%
WASHINGTON, Dec 22 (Reuters) - U.S. consumer confidence improved further in December, suggesting the economy would continue to expand in 2022 despite a resurgence in COVID-19 infections and reduced fiscal stimulus.
The survey from the Conference Board on Wednesday showed more consumers planned to buy a house and big-ticket items such as motor vehicles and major household appliances as well as go on vacation over the next six months.
Inflation concerns eased a bit and households remained upbeat about the labor market.
This will likely help to underpin consumer spending even as government income to households is diminishing.
President Joe Biden's signature $1.75 trillion domestic investment bill known as Build Back Better (BBB), which aims to expand the social safety net and tackle climate change, suffered a blow on Sunday when moderate Democrat Senator Joe Manchin said he would not support it.
That prompted economists to slash their growth estimates for next year.
"Consumers are bullish on 2022," said Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia.
"This is further evidence that consumer spending will keep rising and be the main factor fueling the expansion."
The Conference Board's consumer confidence index increased to a reading of 115.8 this month from an upwardly revised 111.9 in November.
Economists polled by Reuters had forecast the index rising to 110.8 from the previously reported reading of 109.5.
The cut-off date for the survey, which places more emphasis on the labor market, was Dec. 16.
Consumers' assessment of current business and labor market conditions was little changed, but their short-term outlook for income, business and labor market conditions was upbeat, which the Conference Board viewed as "setting the stage for continued growth in early 2022."
Consumers' inflation expectations over the next 12 months fell to 6.9% from a more than 13-year high of 7.3%.
Its so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, slipped to a still-high reading of 42.6 this month from 44.7.
This measure correlates to the unemployment rate from the Labor Department.
The share of consumers planning to buy a motor vehicle over the next six months increased.
Buying intentions for household appliances like washing machines, dryers and refrigerators also rose and more consumers were inclined to buy a house and go on vacation over the next six months.
The show of underlying strength as the nation confronts a winter wave of coronavirus infections, driven by the Delta and highly contagious Omicron variants is welcome news.
Surging infections could significantly curb growth in the first quarter.
Stocks on Wall Street were trading higher.
The dollar slipped against a basket of currencies.
U.S. Treasury prices were higher.
STRONG HOUSING DEMAND
The run of good news was extended by a second report from the National Association of Realtors showing existing home sales rose 1.9% to a seasonally adjusted annual rate of 6.46 million units in November.
But the housing market continues to be dogged by a severe shortage of homes for sale, which is keeping house prices elevated and squeezing first-time buyers out.
The median existing house price increased 13.9% from a year earlier to $353,900 in November.
First-time buyers accounted for 26% of sales last month, compared to 32% a year ago.
That was the smallest share since January 2014.
The reports added to October consumer spending data as well as a sharp narrowing of the trade deficit and steady rebuilding of inventories by businesses in suggesting the economy this year is on track to record its best performance since 1984.
A third report from the Commerce Department on Wednesday showed gross domestic product increased at a 2.3% annualized rate in the July-September quarter, revised up from the 2.1% rate estimated last month.
Growth last quarter was the slowest since the second quarter of 2020, when the economy suffered a historic contraction in the wake of stringent mandatory measures to contain the first wave of coronavirus cases.
The economy was restrained by a resurgence in coronavirus infections over summer, shortages of motor vehicles amid strained global supply chains as well as a decline in pandemic relief money from the government to businesses, households and state and local governments.
Growth was also hampered by Hurricane Ida, which devastated U.S. offshore energy production at the end of August.
"The recovery will end 2021 on a strong note, with strong household finances, rising employment, and an improved health backdrop, before Omicron arrived, supporting GDP growth above 7% in fourth quarter," said Oren Klachkin, lead U.S. economist at Oxford Economics in New York.
Fourteen out of 22 industries contributed to GDP growth in the third quarter.
Services industry output increased at a 3.9% rate, led by professional, scientific and technical services, finance and insurance, administrative and waste management, as well as accommodation and food services, and information.
That partly offset decreases in retail and wholesale trade.
Output in the goods-producing industries contracted at a 5.5% pace, reflecting a broad decline that was dominated by construction.
The government sector grew at a 5.1% rate, led by state and local governments.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-t ... 021-12-22/
Re: THE ECONOMY
REUTERS
"U.S. economy shows strength heading into COVID-19 winter wave"
By Lucia Mutikani
December 23, 2021
Summary
* Weekly jobless claims unchanged at 205,000
* Consumer spending increases 0.6% in November
* Core PCE price index rises 0.5%; up 4.7% year-on-year
* Core capital goods orders fall 0.1%; shipments rise 0.3%
WASHINGTON, Dec 23 (Reuters) - The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week as the labor market tightens, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021.
The economy's stamina demonstrated in Thursday's data, which also showed new home sales racing to a seven-month high and manufacturing still buoyant in November, came as the nation was battling a resurgence in COVID-19 infections, driven by the Delta strain and the highly transmissible Omicron variant.
That could hurt economic activity in the first quarter.
"The economy was running on all cylinders in the fourth quarter," said Diane Swonk, chief economist at Grant Thornton in Chicago.
"The bad news is that much of the weakness associated with the spread of the Omicron variant is still ahead of us."
"Some of the weakness could show up in data for December, but the bulk of the weakness will show up as canceled events, travel and less spending on services in January."
Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 205,000 for the week ended Dec. 18, the Labor Department said.
Early this month, claims dropped to 188,000, the lowest level since 1969.
Last week's claims were in line with economists' expectations.
Claims have declined from a record high of 6.149 million in early April of 2020.
Applications typically increase during the cold weather months, but an acute shortage of workers has disrupted that seasonal pattern, resulting in lower seasonally adjusted claims numbers in recent weeks.
"Looking past that noise, however, we expect claims to remain around 200,000 as layoffs remain low amid tight labor market conditions," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
"The spread of the Omicron variant may lend an upside risk to that forecast, but for now, it appears as though businesses are striving to remain open."
The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls portion of December's employment report.
Claims dropped between the November and December survey periods, suggesting a pickup in job growth this month.
Labor shortages, however, remain a challenge.
There are hopeful signs that unemployed Americans are starting to rejoin the workforce, but soaring coronavirus infections could be an obstacle.
The number of people continuing to receive benefits after an initial week of aid fell 8,000 to 1.859 million in the week ended Dec. 11.
That was the lowest level for the so-called continuing claims since mid-March of 2020.
About 2.138 million people were receiving unemployment checks under all programs in early December, down 320,452 from the end of November.
Stocks on Wall Street rose for a third straight session.
The dollar was steady against a basket of currencies.
U.S. Treasury prices fell.
SERVICES BUOY SPENDING
The tight labor market is underscored by an unemployment rate that is at a 21-month low of 4.2%.
There were a record 11.0 million job openings at the end of October.
Higher wages as companies scramble for scarce workers are helping to underpin consumer spending.
A separate report from the Commerce Department on Thursday showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6% last month after shooting up 1.4% in October.
Services surged 0.9%, accounting for nearly all the gain in spending.
The broad increase in services was led by housing and utilities.
Spending on goods edged up 0.1% as outlays on long-lasting manufactured goods like motor vehicles fell 0.6%, reflecting shortages.
Spending on goods was also weaker after Americans started their holiday shopping early to avoid empty shelves.
A 0.4% increase in personal income, driven by a 0.5% rise in wages, helped to fund some of the spending, though high inflation cut into income gains.
Consumers also relied on savings, resulting in the saving rate falling to a still-high 6.9% from 7.1% in October.
Inflation accelerated in November, with the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rising 0.5% after a similar gain in October.
In the 12 months through November, the so-called core PCE price index jumped 4.7%, the largest increase since February 1989.
It advanced 4.2% year-on-year in October.
"Although consumers say they are anxious about inflation, the outlook for household spending growth in 2022 is solid," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
"Consumers have an extra $2 trillion saved up relative to before the pandemic, thanks to government aid in 2020 and 2021 and limited opportunities to spend."
The scarcity of goods is hampering business spending on equipment.
A third report from the Commerce Department showed orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1% last month with shipments rising 0.3%.
Higher prices meant inflation-adjusted consumer spending was flat after increasing 0.7% in October.
Despite the unchanged so-called real consumer spending last month, economic growth is expected to have accelerated in the fourth quarter, given strong gains in the prior months.
"The inflation tiger needs to be tamed back into its cage primarily by addressing significant bottlenecks and barriers in the transportation and shipping industries which are preventing products from getting to the consumer," said Brian Bethune, professor of Practice at Boston College.
Growth forecasts for the fourth quarter are as high as a 7.5% annualized rate.
The economy grew at a 2.3% pace in the third quarter.
It is expected to grow 5.6% this year, which would be the fastest since 1984, according to a Reuters survey of economists.
The economy contracted 3.4% in 2020.
Reporting by Lucia Mutikani; Editing by Dan Burns, Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-w ... 021-12-23/
"U.S. economy shows strength heading into COVID-19 winter wave"
By Lucia Mutikani
December 23, 2021
Summary
* Weekly jobless claims unchanged at 205,000
* Consumer spending increases 0.6% in November
* Core PCE price index rises 0.5%; up 4.7% year-on-year
* Core capital goods orders fall 0.1%; shipments rise 0.3%
WASHINGTON, Dec 23 (Reuters) - The number of Americans filing new claims for unemployment benefits held below pre-pandemic levels last week as the labor market tightens, while consumer spending increased solidly, putting the economy on track for a strong finish to 2021.
The economy's stamina demonstrated in Thursday's data, which also showed new home sales racing to a seven-month high and manufacturing still buoyant in November, came as the nation was battling a resurgence in COVID-19 infections, driven by the Delta strain and the highly transmissible Omicron variant.
That could hurt economic activity in the first quarter.
"The economy was running on all cylinders in the fourth quarter," said Diane Swonk, chief economist at Grant Thornton in Chicago.
"The bad news is that much of the weakness associated with the spread of the Omicron variant is still ahead of us."
"Some of the weakness could show up in data for December, but the bulk of the weakness will show up as canceled events, travel and less spending on services in January."
Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 205,000 for the week ended Dec. 18, the Labor Department said.
Early this month, claims dropped to 188,000, the lowest level since 1969.
Last week's claims were in line with economists' expectations.
Claims have declined from a record high of 6.149 million in early April of 2020.
Applications typically increase during the cold weather months, but an acute shortage of workers has disrupted that seasonal pattern, resulting in lower seasonally adjusted claims numbers in recent weeks.
"Looking past that noise, however, we expect claims to remain around 200,000 as layoffs remain low amid tight labor market conditions," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
"The spread of the Omicron variant may lend an upside risk to that forecast, but for now, it appears as though businesses are striving to remain open."
The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls portion of December's employment report.
Claims dropped between the November and December survey periods, suggesting a pickup in job growth this month.
Labor shortages, however, remain a challenge.
There are hopeful signs that unemployed Americans are starting to rejoin the workforce, but soaring coronavirus infections could be an obstacle.
The number of people continuing to receive benefits after an initial week of aid fell 8,000 to 1.859 million in the week ended Dec. 11.
That was the lowest level for the so-called continuing claims since mid-March of 2020.
About 2.138 million people were receiving unemployment checks under all programs in early December, down 320,452 from the end of November.
Stocks on Wall Street rose for a third straight session.
The dollar was steady against a basket of currencies.
U.S. Treasury prices fell.
SERVICES BUOY SPENDING
The tight labor market is underscored by an unemployment rate that is at a 21-month low of 4.2%.
There were a record 11.0 million job openings at the end of October.
Higher wages as companies scramble for scarce workers are helping to underpin consumer spending.
A separate report from the Commerce Department on Thursday showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6% last month after shooting up 1.4% in October.
Services surged 0.9%, accounting for nearly all the gain in spending.
The broad increase in services was led by housing and utilities.
Spending on goods edged up 0.1% as outlays on long-lasting manufactured goods like motor vehicles fell 0.6%, reflecting shortages.
Spending on goods was also weaker after Americans started their holiday shopping early to avoid empty shelves.
A 0.4% increase in personal income, driven by a 0.5% rise in wages, helped to fund some of the spending, though high inflation cut into income gains.
Consumers also relied on savings, resulting in the saving rate falling to a still-high 6.9% from 7.1% in October.
Inflation accelerated in November, with the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rising 0.5% after a similar gain in October.
In the 12 months through November, the so-called core PCE price index jumped 4.7%, the largest increase since February 1989.
It advanced 4.2% year-on-year in October.
"Although consumers say they are anxious about inflation, the outlook for household spending growth in 2022 is solid," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
"Consumers have an extra $2 trillion saved up relative to before the pandemic, thanks to government aid in 2020 and 2021 and limited opportunities to spend."
The scarcity of goods is hampering business spending on equipment.
A third report from the Commerce Department showed orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1% last month with shipments rising 0.3%.
Higher prices meant inflation-adjusted consumer spending was flat after increasing 0.7% in October.
Despite the unchanged so-called real consumer spending last month, economic growth is expected to have accelerated in the fourth quarter, given strong gains in the prior months.
"The inflation tiger needs to be tamed back into its cage primarily by addressing significant bottlenecks and barriers in the transportation and shipping industries which are preventing products from getting to the consumer," said Brian Bethune, professor of Practice at Boston College.
Growth forecasts for the fourth quarter are as high as a 7.5% annualized rate.
The economy grew at a 2.3% pace in the third quarter.
It is expected to grow 5.6% this year, which would be the fastest since 1984, according to a Reuters survey of economists.
The economy contracted 3.4% in 2020.
Reporting by Lucia Mutikani; Editing by Dan Burns, Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-w ... 021-12-23/
Re: THE ECONOMY
REUTERS
"U.S. Rep Jayapal asks Biden to continue focus on 'Build Back Better', urges executive action"
By Kanishka Singh
December 27, 2021
Dec 26 (Reuters) - U.S. Representative Pramila Jayapal, a leading liberal House Democrat, has asked President Joe Biden to continue focusing on his social spending legislation and urged him to use executive action despite Senator Joe Manchin's public rejection of the plan.
In an opinion piece in the Washington Post on Sunday, Jayapal, chair of the Congressional Progressive Caucus (CPC), wrote that the CPC will soon release a plan for some actions like lowering costs, protecting the health of families, and tackling climate action.
"The Progressive Caucus will continue to work toward legislation for Build Back Better, focused on keeping it as close to the agreed-upon framework as possible", she wrote in the newspaper.
Manchin, a conservative Democratic senator, rejected the president's "Build Back Better" plan last Sunday in a move that imperils the legislation.
Manchin's move prompted investment bank Goldman Sachs to lower its forecasts for U.S. economic growth.
Manchin's rejection of the bill threatened to scuttle hundreds of billions of dollars in funding for measures to fight climate change and meet the Biden administration's climate goals.
"Taking executive action will also make clear to those who hinder Build Back Better that the White House and Democrats will deliver for Americans", Jayapal wrote.
Manchin has expressed concerns about a number of proposals in Biden's signature domestic policy bill, including multiple climate proposals and extending monthly child tax credit payments.
"I think the stakes are too high for this to be, in any way, about any specific individual", Vice President Kamala Harris said in a CBS News interview aired on Sunday, when asked about Manchin.
Harris said the White House was not giving up on the legislation.
Manchin's support is crucial in the Senate chamber where the Democrats have the slimmest margin of control and Republicans are united in their opposition to the bill.
Senate Majority Leader Chuck Schumer has said the chamber would vote on a package in early 2022.
The White House said on Wednesday that conversations with Manchin's office will continue.
Biden said on Tuesday that he and Manchin were "going to get something done" on the legislation.
Reporting by Kanishka Singh in Bengaluru; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-r ... 021-12-26/
"U.S. Rep Jayapal asks Biden to continue focus on 'Build Back Better', urges executive action"
By Kanishka Singh
December 27, 2021
Dec 26 (Reuters) - U.S. Representative Pramila Jayapal, a leading liberal House Democrat, has asked President Joe Biden to continue focusing on his social spending legislation and urged him to use executive action despite Senator Joe Manchin's public rejection of the plan.
In an opinion piece in the Washington Post on Sunday, Jayapal, chair of the Congressional Progressive Caucus (CPC), wrote that the CPC will soon release a plan for some actions like lowering costs, protecting the health of families, and tackling climate action.
"The Progressive Caucus will continue to work toward legislation for Build Back Better, focused on keeping it as close to the agreed-upon framework as possible", she wrote in the newspaper.
Manchin, a conservative Democratic senator, rejected the president's "Build Back Better" plan last Sunday in a move that imperils the legislation.
Manchin's move prompted investment bank Goldman Sachs to lower its forecasts for U.S. economic growth.
Manchin's rejection of the bill threatened to scuttle hundreds of billions of dollars in funding for measures to fight climate change and meet the Biden administration's climate goals.
"Taking executive action will also make clear to those who hinder Build Back Better that the White House and Democrats will deliver for Americans", Jayapal wrote.
Manchin has expressed concerns about a number of proposals in Biden's signature domestic policy bill, including multiple climate proposals and extending monthly child tax credit payments.
"I think the stakes are too high for this to be, in any way, about any specific individual", Vice President Kamala Harris said in a CBS News interview aired on Sunday, when asked about Manchin.
Harris said the White House was not giving up on the legislation.
Manchin's support is crucial in the Senate chamber where the Democrats have the slimmest margin of control and Republicans are united in their opposition to the bill.
Senate Majority Leader Chuck Schumer has said the chamber would vote on a package in early 2022.
The White House said on Wednesday that conversations with Manchin's office will continue.
Biden said on Tuesday that he and Manchin were "going to get something done" on the legislation.
Reporting by Kanishka Singh in Bengaluru; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-r ... 021-12-26/
Re: THE ECONOMY
REUTERS
"U.S. holiday retail sales rise 8.5% as online shopping booms -Mastercard"
Reuters
December 26, 2021
Dec 26 (Reuters) - U.S. retail sales rose 8.5% during this year's holiday shopping season from Nov. 1 to Dec. 24, powered by soaring ecommerce sales, a report by Mastercard Inc said on Sunday.
U.S. ecommerce sales jumped 11% in this year's holiday shopping season, according to Mastercard SpendingPulse report, yet again underscoring the COVID-19 pandemic's role in transforming customers' shopping habits.
Shoppers also rushed to stores amid supply chain concerns as COVID-19 cases surged, sending sales at physical stores up 8.1% compared with 2020, the report added.
"Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves," senior advisor for Mastercard Steve Sadove said in a statement.
Holiday e-commerce sales made up 20.9% of total retail sales this year, the data showed, noting that the sector continues to see growth as consumers enjoy the ease of browsing and buying in the comfort of their homes.
Segments such as jewelry and electronics continued to post growth, with jewelry sales surging 32% and electronics sales climbing 16.2% from 2020 levels, the report said.
The SpendingPulse report tracks spending by combining sales activity in Mastercard's payments network with estimates of cash and other payment forms but excludes automobile sales.
Reporting by Akriti Sharma in Bengaluru; Editing by Mark Porter
https://www.reuters.com/markets/us/us-h ... 021-12-26/
"U.S. holiday retail sales rise 8.5% as online shopping booms -Mastercard"
Reuters
December 26, 2021
Dec 26 (Reuters) - U.S. retail sales rose 8.5% during this year's holiday shopping season from Nov. 1 to Dec. 24, powered by soaring ecommerce sales, a report by Mastercard Inc said on Sunday.
U.S. ecommerce sales jumped 11% in this year's holiday shopping season, according to Mastercard SpendingPulse report, yet again underscoring the COVID-19 pandemic's role in transforming customers' shopping habits.
Shoppers also rushed to stores amid supply chain concerns as COVID-19 cases surged, sending sales at physical stores up 8.1% compared with 2020, the report added.
"Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves," senior advisor for Mastercard Steve Sadove said in a statement.
Holiday e-commerce sales made up 20.9% of total retail sales this year, the data showed, noting that the sector continues to see growth as consumers enjoy the ease of browsing and buying in the comfort of their homes.
Segments such as jewelry and electronics continued to post growth, with jewelry sales surging 32% and electronics sales climbing 16.2% from 2020 levels, the report said.
The SpendingPulse report tracks spending by combining sales activity in Mastercard's payments network with estimates of cash and other payment forms but excludes automobile sales.
Reporting by Akriti Sharma in Bengaluru; Editing by Mark Porter
https://www.reuters.com/markets/us/us-h ... 021-12-26/
Re: THE ECONOMY
CNBC
"U.S. goods trade deficit hits a record in November"
Reuters
PUBLISHED WED, DEC 29 2021
KEY POINTS
* The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, the Commerce Department said on Wednesday. That exceeds the previous record deficit set in September of $97 billion.
* Goods exports declined 2.1%, while imports rose by 4.7%.
* Trade has been a drag on gross domestic product growth for five straight quarters, while inventories added to output in the third quarter.
The U.S. trade deficit in goods mushroomed to a record in November as imports surged and exports slipped.
The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, the Commerce Department said on Wednesday.
That exceeds the previous record deficit set in September of $97 billion.
Goods exports declined 2.1%, while imports rose by 4.7%.
The report also showed wholesale inventories climbed 1.2% last month.
Retail inventories increased 2.0%.
Retail inventories, excluding autos, which go into the calculation of gross domestic product, edged up by 1.3%
The economy grew at a 2.3% annualized rate in the third quarter, a step-down from earlier in the year but activity has rebounded in the fourth quarter.
Trade has been a drag on gross domestic product growth for five straight quarters, while inventories added to output in the third quarter.
https://www.cnbc.com/2021/12/29/us-good ... ember.html
"U.S. goods trade deficit hits a record in November"
Reuters
PUBLISHED WED, DEC 29 2021
KEY POINTS
* The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, the Commerce Department said on Wednesday. That exceeds the previous record deficit set in September of $97 billion.
* Goods exports declined 2.1%, while imports rose by 4.7%.
* Trade has been a drag on gross domestic product growth for five straight quarters, while inventories added to output in the third quarter.
The U.S. trade deficit in goods mushroomed to a record in November as imports surged and exports slipped.
The goods trade deficit widened last month by 17.5% to $97.8 billion from $83.2 billion in October, the Commerce Department said on Wednesday.
That exceeds the previous record deficit set in September of $97 billion.
Goods exports declined 2.1%, while imports rose by 4.7%.
The report also showed wholesale inventories climbed 1.2% last month.
Retail inventories increased 2.0%.
Retail inventories, excluding autos, which go into the calculation of gross domestic product, edged up by 1.3%
The economy grew at a 2.3% annualized rate in the third quarter, a step-down from earlier in the year but activity has rebounded in the fourth quarter.
Trade has been a drag on gross domestic product growth for five straight quarters, while inventories added to output in the third quarter.
https://www.cnbc.com/2021/12/29/us-good ... ember.html
Re: THE ECONOMY
CNBC
"Weekly jobless claims total 198,000, less than expected and around 52-year low"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED THU, DEC 30 2021
KEY POINTS
* Weekly jobless claims totaled 198,000 for the week ended Dec. 25.
* That was below the 205,000 forecast and near the lowest level since 1969.
* Continuing claims also fell, dropping to 1.72 million for their lowest total since March 7, 2020.
Initial filings for unemployment insurance dipped last week and remained close to their lowest level in more than 50 years, the Labor Department reported Thursday.
Jobless claims for the week ended Dec. 25 totaled 198,000, less than the 205,000 Dow Jones forecast and a dip of 8,000 from the previous period.
When adjusting for weekly volatility, the four-week moving average for claims came to 199,250, the lowest level since Oct. 25, 1969.
Continuing claims, the data for which runs a week behind the headline number, dropped by 140,000 to 1.72 million, the lowest level since March 7, 2020, just before the Covid pandemic declaration.
The numbers reflect an increasingly tight labor market and come with the Federal Reserve pulling back on some of the historically accommodative policy it put in place during the crisis.
The national unemployment rate has dropped to 4.2%, a far cry from the 14.8% peak in April 2020.
The surge in the omicron variant, though, could apply some downward pressure to the labor market.
“Initial claims are extremely low, and continued claims are low and steadily declining."
"Demand for labor is very strong and workers are in short supply, so businesses are not laying off employees."
"Those workers who do find themselves unemployed can quickly find new jobs,” wrote Gus Faucher, chief economist at PNC Financial.
“But the omicron variant is a substantial downside near-term risk to the outlook for job growth.”
Despite the downward trend in initial claims, the total of those receiving benefits under all programs rose by nearly 40,000 to 2.18 million, according to data through Dec. 11.
Some of the decline in claims has come from the ending of benefits through programs created during the pandemic that provided enhanced and extended payments.
Still, the total getting benefits is a far cry from where it was a year ago when 20.5 million were on the various programs.
“The expectation was that a fading in the pandemic, reopenings at schools and childcare centers, and the gradual reentrance of people who lost their unemployment insurance benefits in September into the workforce will help relieve labor shortages and allow for continued strong job growth next year,” Faucher added.
“However, rising coronavirus cases due to the omicron could put the labor force recovery on hold, at least over the next couple of months.”
The jobs market also has seen a record pace of people quitting their jobs, many for better opportunities elsewhere as average hourly earnings climb in an inflationary environment the U.S. has not seen in decades.
The Fed has responded to inflation by speeding up the pace at which it is reducing its monthly bond purchases.
That program is expected to be completed in a few months, and markets expect the central bank to start raising interest rates in March 2022.
https://www.cnbc.com/2021/12/30/weekly- ... ected.html
"Weekly jobless claims total 198,000, less than expected and around 52-year low"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED THU, DEC 30 2021
KEY POINTS
* Weekly jobless claims totaled 198,000 for the week ended Dec. 25.
* That was below the 205,000 forecast and near the lowest level since 1969.
* Continuing claims also fell, dropping to 1.72 million for their lowest total since March 7, 2020.
Initial filings for unemployment insurance dipped last week and remained close to their lowest level in more than 50 years, the Labor Department reported Thursday.
Jobless claims for the week ended Dec. 25 totaled 198,000, less than the 205,000 Dow Jones forecast and a dip of 8,000 from the previous period.
When adjusting for weekly volatility, the four-week moving average for claims came to 199,250, the lowest level since Oct. 25, 1969.
Continuing claims, the data for which runs a week behind the headline number, dropped by 140,000 to 1.72 million, the lowest level since March 7, 2020, just before the Covid pandemic declaration.
The numbers reflect an increasingly tight labor market and come with the Federal Reserve pulling back on some of the historically accommodative policy it put in place during the crisis.
The national unemployment rate has dropped to 4.2%, a far cry from the 14.8% peak in April 2020.
The surge in the omicron variant, though, could apply some downward pressure to the labor market.
“Initial claims are extremely low, and continued claims are low and steadily declining."
"Demand for labor is very strong and workers are in short supply, so businesses are not laying off employees."
"Those workers who do find themselves unemployed can quickly find new jobs,” wrote Gus Faucher, chief economist at PNC Financial.
“But the omicron variant is a substantial downside near-term risk to the outlook for job growth.”
Despite the downward trend in initial claims, the total of those receiving benefits under all programs rose by nearly 40,000 to 2.18 million, according to data through Dec. 11.
Some of the decline in claims has come from the ending of benefits through programs created during the pandemic that provided enhanced and extended payments.
Still, the total getting benefits is a far cry from where it was a year ago when 20.5 million were on the various programs.
“The expectation was that a fading in the pandemic, reopenings at schools and childcare centers, and the gradual reentrance of people who lost their unemployment insurance benefits in September into the workforce will help relieve labor shortages and allow for continued strong job growth next year,” Faucher added.
“However, rising coronavirus cases due to the omicron could put the labor force recovery on hold, at least over the next couple of months.”
The jobs market also has seen a record pace of people quitting their jobs, many for better opportunities elsewhere as average hourly earnings climb in an inflationary environment the U.S. has not seen in decades.
The Fed has responded to inflation by speeding up the pace at which it is reducing its monthly bond purchases.
That program is expected to be completed in a few months, and markets expect the central bank to start raising interest rates in March 2022.
https://www.cnbc.com/2021/12/30/weekly- ... ected.html
Re: THE ECONOMY
REUTERS
"U.S. jobless claims drop, showing no Omicron hit yet"
By Dan Burns
December 30, 2021
Dec 30 (Reuters) - New claims for U.S. unemployment benefits fell in the week leading up to Christmas and benefits rolls slid to their lowest level of the coronavirus pandemic era the week earlier, the Labor Department said on Thursday, data that showed no impact yet on employment from the rapidly spreading Omicron variant.
Initial claims for state unemployment benefits dropped to a seasonally adjusted 198,000 for the week ended Dec. 25 from a revised 206,000 a week earlier.
Early this month, claims dropped to a level last seen in 1969.
Economists polled by Reuters had forecast 208,000 applications for the latest week.
Claims have declined from a record high of 6.149 million in early April of 2020.
The data were the latest to show that Omicron - the newest and most contagious COVID-19 variant so far - has yet to trip up a tight job market or slow a U.S. economy that appears solidly on track to end the year at a gangbusters growth rate.
While the initial claims data was depressed by so-called seasonal adjustment factors, even the nonseasonally adjusted figures - while roughly 60,000 higher - showed almost no week-over-week change.
"The fact that NSA claims were unchanged - at a time when they typically tend to deteriorate - suggests that there has been no impact from Omicron as of yet," economists Thomas Simons and Aneta Markowska at Jefferies wrote.
The figures - among the most timely reading on the health of the labor market - also showed the number of people on benefits beyond the first week fell to 1.716 million in the week ended Dec. 18, the lowest since the week of March 7, 2020.
That essentially marks a return to the level that prevailed before the first wave of COVID-19 lockdowns later that month sent unemployment rolls soaring.
"We expect continued claims to come in more consistently around 1.7 million given the low level of initial claims and as more individuals return to work as health conditions improve, although the Omicron variant might slow that process," Nancy Vanden Houten, lead economist at Oxford Economics wrote.
Applications typically increase during the cold weather months, but an acute shortage of workers has disrupted that seasonal pattern, resulting in lower seasonally adjusted claims numbers in recent weeks.
Discounting the weekly volatility, the labor market is tightening, with the unemployment rate at a 21-month low 4.2% as of November.
Employment figures for December will be released on Jan. 7, and the early consensus estimate among economists polled by Reuters sees the jobless rate edging still lower to 4.1%.
There were a record 11.0 million job openings at the end of October.
Higher wages as companies scramble for scarce workers are helping to underpin consumer spending.
The economy grew at a 2.3% annualized rate in the third quarter, with consumer spending rising at a 2.0% pace.
Growth forecasts for the fourth quarter are as high as a 7.2% rate.
For the whole of 2021, the economy is expected to grow 5.6%, which would be the fastest since 1984, according to a Reuters survey of economists.
The economy contracted 3.4% in 2020.
Questions are now arising over how sustainable that momentum may prove to be with Omicron's rapid spread pushing COVID-19 infections back to record highs, exceeding even last winter's crushing wave.
On top of that, the Biden administration's $1.75 trillion domestic investment plan is stalled in the U.S. Senate.
Against those uncertainties, some economists have begun cutting their growth estimates for next year.
Reporting by Dan Burns; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-w ... 021-12-30/
"U.S. jobless claims drop, showing no Omicron hit yet"
By Dan Burns
December 30, 2021
Dec 30 (Reuters) - New claims for U.S. unemployment benefits fell in the week leading up to Christmas and benefits rolls slid to their lowest level of the coronavirus pandemic era the week earlier, the Labor Department said on Thursday, data that showed no impact yet on employment from the rapidly spreading Omicron variant.
Initial claims for state unemployment benefits dropped to a seasonally adjusted 198,000 for the week ended Dec. 25 from a revised 206,000 a week earlier.
Early this month, claims dropped to a level last seen in 1969.
Economists polled by Reuters had forecast 208,000 applications for the latest week.
Claims have declined from a record high of 6.149 million in early April of 2020.
The data were the latest to show that Omicron - the newest and most contagious COVID-19 variant so far - has yet to trip up a tight job market or slow a U.S. economy that appears solidly on track to end the year at a gangbusters growth rate.
While the initial claims data was depressed by so-called seasonal adjustment factors, even the nonseasonally adjusted figures - while roughly 60,000 higher - showed almost no week-over-week change.
"The fact that NSA claims were unchanged - at a time when they typically tend to deteriorate - suggests that there has been no impact from Omicron as of yet," economists Thomas Simons and Aneta Markowska at Jefferies wrote.
The figures - among the most timely reading on the health of the labor market - also showed the number of people on benefits beyond the first week fell to 1.716 million in the week ended Dec. 18, the lowest since the week of March 7, 2020.
That essentially marks a return to the level that prevailed before the first wave of COVID-19 lockdowns later that month sent unemployment rolls soaring.
"We expect continued claims to come in more consistently around 1.7 million given the low level of initial claims and as more individuals return to work as health conditions improve, although the Omicron variant might slow that process," Nancy Vanden Houten, lead economist at Oxford Economics wrote.
Applications typically increase during the cold weather months, but an acute shortage of workers has disrupted that seasonal pattern, resulting in lower seasonally adjusted claims numbers in recent weeks.
Discounting the weekly volatility, the labor market is tightening, with the unemployment rate at a 21-month low 4.2% as of November.
Employment figures for December will be released on Jan. 7, and the early consensus estimate among economists polled by Reuters sees the jobless rate edging still lower to 4.1%.
There were a record 11.0 million job openings at the end of October.
Higher wages as companies scramble for scarce workers are helping to underpin consumer spending.
The economy grew at a 2.3% annualized rate in the third quarter, with consumer spending rising at a 2.0% pace.
Growth forecasts for the fourth quarter are as high as a 7.2% rate.
For the whole of 2021, the economy is expected to grow 5.6%, which would be the fastest since 1984, according to a Reuters survey of economists.
The economy contracted 3.4% in 2020.
Questions are now arising over how sustainable that momentum may prove to be with Omicron's rapid spread pushing COVID-19 infections back to record highs, exceeding even last winter's crushing wave.
On top of that, the Biden administration's $1.75 trillion domestic investment plan is stalled in the U.S. Senate.
Against those uncertainties, some economists have begun cutting their growth estimates for next year.
Reporting by Dan Burns; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-w ... 021-12-30/
Re: THE ECONOMY
CNBC
"A record 4.5 million workers quit their jobs in November"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED TUE, JAN 4 2022
KEY POINTS
* A record 4.5 million workers quit their jobs in November, while job openings declined to 10.6 million.
* Restaurant and health-care workers were responsible for much of the surge in “quits.”
* Manufacturing activity also expanded in December, but less than expected, according to the latest ISM report.
Workers quit their jobs in record numbers in November while the total employment openings pulled back a bit, the Labor Department reported Tuesday.
The so-called quits level surged to 4.53 million for the month, according to the department’s Job Openings and Labor Turnover Survey.
That represented an 8.9% increase from October and broke September’s high-water mark of 4.36 million.
As a percentage of the workforce, the quits rate of 3% matched September’s mark.
In a phenomenon that has been labeled the Great Resignation, workers have been leaving their positions partly in response to increased mobility in the labor market as job openings strongly outnumber those looking for work.
For November, the number of job openings totaled 10.56 million, lower than the 11 million estimate from FactSet and a decline from 11.09 million in October.
The level, however, was well ahead of the 6.88 million total of those out of work and looking for jobs in November, according to the government’s nonfarm payrolls report for that month.
The job openings rate was 6.6%, down from about 7% in October but well ahead of the 4.5% from the prior year.
“The Great Resignation shows no sign of abating, with quits hitting a new record."
"The question is why, and the answers are for starkly different reasons,” said Robert Frick, corporate economist at Navy Federal Credit Union.
“COVID-19 burnout and fear are continuing, but also, many Americans have the confidence to quit given the high level of job openings and rising pay.”
A separate economic report Tuesday showed that manufacturing activity in December was slower than expected.
The ISM Manufacturing Index registered a 58.7% reading, below the 60% expectation and a drop from 61.1% in November.
The biggest subtractions from the index came in supplier deliveries, which fell 7.3 percentage points, and a surprise plunge in prices, which dropped 14.2 percentage points at a time when inflation is running at its highest level in nearly 40 years.
Survey responses indicated prices are declining some for steel and oil.
A reading over 50% signals the manufacturing sector is expanding in general, while a reading under 50% is a sign it is mainly contracting.
On the upside, the employment index rose to 54.2%, a gain of 0.9 percentage point and a sign that hiring remains strong.
The JOLTS report showed, though, that there are some displacements happening in the labor market.
At an industry level, the openings rate in leisure and hospitality slid to 8.7% from 10.1%, due a drop in accommodation and food services to 8.9% from 10.5%.
The hire rate in leisure and hospitality edged higher to 8.1% but the quits rate jumped a full percentage point to 6.4%.
The health-care and social assistance industry also showed stress as Covid cases surged, with the quits rate in that field hitting 3% for the month, the highest on record.
The report comes three days before the Labor Department releases its closely watched nonfarm payrolls count for December.
Economists surveyed by Dow Jones expect growth of 422,000 jobs and the unemployment rate to nudge lower to 4.1%.
https://www.cnbc.com/2022/01/04/jolts-n ... -jobs.html
"A record 4.5 million workers quit their jobs in November"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED TUE, JAN 4 2022
KEY POINTS
* A record 4.5 million workers quit their jobs in November, while job openings declined to 10.6 million.
* Restaurant and health-care workers were responsible for much of the surge in “quits.”
* Manufacturing activity also expanded in December, but less than expected, according to the latest ISM report.
Workers quit their jobs in record numbers in November while the total employment openings pulled back a bit, the Labor Department reported Tuesday.
The so-called quits level surged to 4.53 million for the month, according to the department’s Job Openings and Labor Turnover Survey.
That represented an 8.9% increase from October and broke September’s high-water mark of 4.36 million.
As a percentage of the workforce, the quits rate of 3% matched September’s mark.
In a phenomenon that has been labeled the Great Resignation, workers have been leaving their positions partly in response to increased mobility in the labor market as job openings strongly outnumber those looking for work.
For November, the number of job openings totaled 10.56 million, lower than the 11 million estimate from FactSet and a decline from 11.09 million in October.
The level, however, was well ahead of the 6.88 million total of those out of work and looking for jobs in November, according to the government’s nonfarm payrolls report for that month.
The job openings rate was 6.6%, down from about 7% in October but well ahead of the 4.5% from the prior year.
“The Great Resignation shows no sign of abating, with quits hitting a new record."
"The question is why, and the answers are for starkly different reasons,” said Robert Frick, corporate economist at Navy Federal Credit Union.
“COVID-19 burnout and fear are continuing, but also, many Americans have the confidence to quit given the high level of job openings and rising pay.”
A separate economic report Tuesday showed that manufacturing activity in December was slower than expected.
The ISM Manufacturing Index registered a 58.7% reading, below the 60% expectation and a drop from 61.1% in November.
The biggest subtractions from the index came in supplier deliveries, which fell 7.3 percentage points, and a surprise plunge in prices, which dropped 14.2 percentage points at a time when inflation is running at its highest level in nearly 40 years.
Survey responses indicated prices are declining some for steel and oil.
A reading over 50% signals the manufacturing sector is expanding in general, while a reading under 50% is a sign it is mainly contracting.
On the upside, the employment index rose to 54.2%, a gain of 0.9 percentage point and a sign that hiring remains strong.
The JOLTS report showed, though, that there are some displacements happening in the labor market.
At an industry level, the openings rate in leisure and hospitality slid to 8.7% from 10.1%, due a drop in accommodation and food services to 8.9% from 10.5%.
The hire rate in leisure and hospitality edged higher to 8.1% but the quits rate jumped a full percentage point to 6.4%.
The health-care and social assistance industry also showed stress as Covid cases surged, with the quits rate in that field hitting 3% for the month, the highest on record.
The report comes three days before the Labor Department releases its closely watched nonfarm payrolls count for December.
Economists surveyed by Dow Jones expect growth of 422,000 jobs and the unemployment rate to nudge lower to 4.1%.
https://www.cnbc.com/2022/01/04/jolts-n ... -jobs.html