REUTERS
"US labor market stays resilient; housing regresses on higher mortgage rates"
By Lucia Mutikani
April 18, 2024
Summary
* Weekly jobless claims unchanged at 212,000
* Continuing claims rise 2,000 to 1.812 million
* Existing home sales drop 4.3% in March
WASHINGTON, April 18 (Reuters) - The number of Americans filing new claims for unemployment benefits was unchanged at a low level last week, pointing to continued labor market strength that is driving the economy.
Labor market resilience, together with elevated inflation have led financial markets and some economists to expect that the Federal Reserve could delay cutting interest rates until September.
A few economists doubt that the U.S. central bank will lower borrowing costs this year.
"Overall, layoffs remain low," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
"We expect a continuation of the current trend, with a further adjustment in the labor market coming from a moderation in hiring rather than a surge in firings."
Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 212,000 for the week ended April 13, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 215,000 claims in the latest week.
Claims have been bouncing around in a 194,000-225,000 range this year.
Unadjusted claims declined 6,756 to 208,509 last week.
Filings in California jumped by 3,063.
There were also notable increases in claims in Connecticut, Georgia and Oregon.
These were more than offset by a decline of 4,551 in filings in New Jersey.
Claims in the state had surged in the prior week, a move that was blamed on layoffs in the accommodation and food services, transportation and warehousing, and public administration industries.
There were also significant decreases in filings in Minnesota, Ohio, Pennsylvania and Wisconsin.
Fed Chair Jerome Powell backed away on Tuesday from providing any guidance on when rates might be cut, saying instead that monetary policy needed to be restrictive for longer.
Financial markets initially expected the first rate cut to come in March, but the timing got pushed back to June and now to September as data on the labor market and inflation continued to surprise on the upside in the first three months of the year.
The Fed has kept its policy rate in the 5.25%-5.50% range since July.
It has raised the benchmark overnight interest rate by 525 basis points since March of 2022.
The claims data covered the period during which the government surveyed businesses and other establishments for the nonfarm payrolls component of April's employment report.
Claims were unchanged between the March and April survey weeks.
The economy added 303,000 jobs in March.
Stocks on Wall Street were trading higher.
The dollar gained versus a basket of currencies.
U.S. Treasury yields rose.
RISING LABOR SUPPLY
The Fed's latest "Beige Book" report on Wednesday described employment as rising at a "slight pace overall" since late February, adding that "several districts reported improved retention of employees, and others pointed to staff reductions at some firms."
It also noted that even as labor supply has improved, "many districts described persistent shortages of qualified applicants for certain positions, including machinists, trades workers and hospitality workers."
Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, will offer more clues on the state of the labor market in April.
The so-called continuing claims edged up 2,000 to 1.812 million during the week ending April 6, the claims report showed.
Though still low by historical standards, the slightly elevated level of continuing claims suggests it could be taking longer for some unemployed workers to land new jobs.
With the outlook for rate cuts uncertain, the average rate on the popular 30-year fixed-rate mortgage has drifted above 7%, data from mortgage finance agency Freddie Mac showed, combining with higher house prices to depress home sales.
A separate report from the National Association of Realtors showed existing home sales fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million units.
Home resales, which account for a large portion of U.S. housing sales, declined 3.7% on a year-on-year basis in March.
Sales also continued to be constrained by tight supply, especially in the lower price segment of the market, resulting in multiple offers for properties.
The median existing home price increased 4.8% from a year earlier to $393,500 in March.
That was a record high for the month of March.
Sales of houses in the $100,000-$250,000 price range declined 15.8% year-on-year.
By contrast, sales for houses priced $1 million and above increased 14.0% from a year ago.
The weak sales followed data this week showing housing starts and building permits tumbled in March.
"We're forecasting a very subdued recovery in existing home sales," said Thomas Ryan, property economist at Capital Economics.
"Borrowing costs will fall from where they are now, but not enough to fully offset mortgage rate 'lock-in' effects, which will continue to hold back sales volumes."
While the housing market has regressed, signs of revival in manufacturing are growing.
A third report from the Philadelphia Fed showed its gauge of factory activity in the mid-Atlantic region rising to a two-year high in April amid a jump in new orders.
But businesses reported paying more for inputs, suggesting a pick-up in goods prices could be looming.
Some economists were, however, not too concerned about the rise in the survey's prices paid measure, noting the recent rebound in oil prices amid tensions in the Middle East.
Falling goods prices were the main driver of lower inflation last year.
Data this week showed manufacturing production rebounded in March from a year ago.
"While far from conclusive, this report provides some marginal support in favor of a recovery in the manufacturing sector after its prolonged slump," said Oliver Allen, senior U.S. Economist at Pantheon Macroeconomics.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Paul Simao and Andrea Ricci
https://www.reuters.com/world/us/us-wee ... 024-04-18/
THE ECONOMY
Re: THE ECONOMY
REUTERS
"Mortgage rates top 7% for the first time this year, Freddie Mac says"
By Amina Niasse
April 18, 2024
NEW YORK, April 18 (Reuters) - U.S. mortgage rates increased by the most since June and also crossed the 7% threshold for the first time since December, muddling home sales growth, a Thursday report said.
The average rate on a 30-year fixed-rate mortgage rose to 7.10% for the week ended April 18 from 6.88% the week prior, Freddie Mac reported.
The 22-basis point increase was the largest in about 10 months.
“As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year," said Sam Khater, Freddie Mac's chief economist.
"Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future.”
While buyers saw rates on home loans ease during 2023's fourth quarter, they have steadily increased since January, though rates remain below two-decade highs nearing 8% in October.
High mortgage rates last year contributed to limited housing inventory, following the Federal Reserve's rate hike campaign launched in 2022.
Reporting by Amina Niasse; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/mort ... 024-04-18/
"Mortgage rates top 7% for the first time this year, Freddie Mac says"
By Amina Niasse
April 18, 2024
NEW YORK, April 18 (Reuters) - U.S. mortgage rates increased by the most since June and also crossed the 7% threshold for the first time since December, muddling home sales growth, a Thursday report said.
The average rate on a 30-year fixed-rate mortgage rose to 7.10% for the week ended April 18 from 6.88% the week prior, Freddie Mac reported.
The 22-basis point increase was the largest in about 10 months.
“As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year," said Sam Khater, Freddie Mac's chief economist.
"Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future.”
While buyers saw rates on home loans ease during 2023's fourth quarter, they have steadily increased since January, though rates remain below two-decade highs nearing 8% in October.
High mortgage rates last year contributed to limited housing inventory, following the Federal Reserve's rate hike campaign launched in 2022.
Reporting by Amina Niasse; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/mort ... 024-04-18/
Re: THE ECONOMY
REUTERS
"Philly Fed manufacturing gauge charges to 2-year high"
By Reuters
April 18, 2024
April 18 (Reuters) - Manufacturing activity in the U.S. Mid-Atlantic region expanded by the most in two years in April on the strength of new orders and shipments of finished goods, but renewed input cost pressures could reinforce hesitation among Federal Reserve officials to pivot toward interest rate cuts.
The Philadelphia Fed on Thursday said its monthly business conditions index rose to 15.5 from 3.2 in March, exceeding the median estimate among economists in a Reuters poll for a reading of 2.3 and overshooting even the most optimistic forecast among 34 economists surveyed.
The data buffers other recent indications of a recovery underway in a U.S. factory sector that by many measures had endured a modest downturn throughout 2023 even as the wider economy grew above its potential.
The Philly Fed's index for new orders climbed to its highest since last August and shipments activity was its most brisk since August 2022.
The prices paid index rose to its highest since December while prices received by goods producers saw a slight increase.
Both measures had trended notably lower through the second half of 2023, among the indicators that Fed officials had embraced at that time as a signal that inflation was on track to return to their 2% target.
Their increase this month echoes other recent data showing inflation this year is proving to be stubborn, prompting central bankers to back away from providing any guidance on when policy easing might begin.
Factory employment, meanwhile, continued to fall, dropping to its lowest level overall since May 2020, in keeping with other gauges showing sluggish employment in the sector.
Manufacturing job growth has been next to non-existent over the past year, with the Labor Department's measure of new factory jobs averaging just 2,000 a month in that span, among the weakest-performing industries in the private sector.
Reporting By Dan Burns; editing by Christina Fincher
https://www.reuters.com/markets/us/phil ... 024-04-18/
"Philly Fed manufacturing gauge charges to 2-year high"
By Reuters
April 18, 2024
April 18 (Reuters) - Manufacturing activity in the U.S. Mid-Atlantic region expanded by the most in two years in April on the strength of new orders and shipments of finished goods, but renewed input cost pressures could reinforce hesitation among Federal Reserve officials to pivot toward interest rate cuts.
The Philadelphia Fed on Thursday said its monthly business conditions index rose to 15.5 from 3.2 in March, exceeding the median estimate among economists in a Reuters poll for a reading of 2.3 and overshooting even the most optimistic forecast among 34 economists surveyed.
The data buffers other recent indications of a recovery underway in a U.S. factory sector that by many measures had endured a modest downturn throughout 2023 even as the wider economy grew above its potential.
The Philly Fed's index for new orders climbed to its highest since last August and shipments activity was its most brisk since August 2022.
The prices paid index rose to its highest since December while prices received by goods producers saw a slight increase.
Both measures had trended notably lower through the second half of 2023, among the indicators that Fed officials had embraced at that time as a signal that inflation was on track to return to their 2% target.
Their increase this month echoes other recent data showing inflation this year is proving to be stubborn, prompting central bankers to back away from providing any guidance on when policy easing might begin.
Factory employment, meanwhile, continued to fall, dropping to its lowest level overall since May 2020, in keeping with other gauges showing sluggish employment in the sector.
Manufacturing job growth has been next to non-existent over the past year, with the Labor Department's measure of new factory jobs averaging just 2,000 a month in that span, among the weakest-performing industries in the private sector.
Reporting By Dan Burns; editing by Christina Fincher
https://www.reuters.com/markets/us/phil ... 024-04-18/
Re: THE ECONOMY
CNBC
"Fed’s Goolsbee says ‘more sniffing’ may be needed before rate cuts"
Kelli Grant, CFP @KELLIGRANT.MONEY
PUBLISHED FRI, APR 19 2024
KEY POINTS
* The path to 2% inflation is “more difficult” in 2024, Federal Reserve Bank of Chicago president Austan Goolsbee said on Friday.
* Inflation has dropped significantly since its pandemic-era peak of 9.1%, but it remains above the Fed’s target.
* Goolsbee said the Fed needs “more sniffing” before it can start cutting interest rates.
CHICAGO — The path to 2% inflation is “more difficult” in 2024, said Federal Reserve Bank of Chicago President Austan Goolsbee.
“We’re going to get to 2%,” Goolsbee said Friday during a session at the Society for Advancing Business Editing and Writing’s annual conference.
“We said it."
"That’s our stated target.“
Inflation has come down significantly from its pandemic-era peak of 9.1%, but remains stubbornly above that stated target.
The consumer price index, a broad measure of costs for goods and services across the economy, rose 3.5% in March from a year ago.
“If you take a broad view, inflation got way above where we were comfortable with and it’s down a lot,” he said.
The first three readings for this year indicate covering the remaining distance to 2% “may not be as rapid,” he added.
That “stalling” merits further investigation on the direction of the economy before the Fed moves to cut rates, said Goolsbee, who is a nonvoting member this year of the rate-setting Federal Open Market Committee.
He described himself as a “proud data dog,” and pointed to what he says is “the first rule of the kennel.”
“If you are unclear, stop walking and start sniffing,” he said.
“And with these numbers, we need to do more sniffing.”
“We want to have confidence that we are on this path to 2[%],” he said.
“That’s the thing we have got to pay attention to.”
Housing inflation is a key area to watch, Goolsbee said.
“That’s the one that has not behaved as we thought it would,” he said.
Shelter costs, which make up about one-third of the weighting in the CPI, rose 5.7% in March from a year ago.
“The market rent inflation is well down, but it hasn’t flowed through into the official measure,” he said.
“If it doesn’t — I still think it will — but if it doesn’t, I think we’re going to have a hard time."
"It’s definitely going to be more difficult to get to 2% overall if we do not see progress.”
https://www.cnbc.com/2024/04/19/feds-go ... cuts-.html
"Fed’s Goolsbee says ‘more sniffing’ may be needed before rate cuts"
Kelli Grant, CFP @KELLIGRANT.MONEY
PUBLISHED FRI, APR 19 2024
KEY POINTS
* The path to 2% inflation is “more difficult” in 2024, Federal Reserve Bank of Chicago president Austan Goolsbee said on Friday.
* Inflation has dropped significantly since its pandemic-era peak of 9.1%, but it remains above the Fed’s target.
* Goolsbee said the Fed needs “more sniffing” before it can start cutting interest rates.
CHICAGO — The path to 2% inflation is “more difficult” in 2024, said Federal Reserve Bank of Chicago President Austan Goolsbee.
“We’re going to get to 2%,” Goolsbee said Friday during a session at the Society for Advancing Business Editing and Writing’s annual conference.
“We said it."
"That’s our stated target.“
Inflation has come down significantly from its pandemic-era peak of 9.1%, but remains stubbornly above that stated target.
The consumer price index, a broad measure of costs for goods and services across the economy, rose 3.5% in March from a year ago.
“If you take a broad view, inflation got way above where we were comfortable with and it’s down a lot,” he said.
The first three readings for this year indicate covering the remaining distance to 2% “may not be as rapid,” he added.
That “stalling” merits further investigation on the direction of the economy before the Fed moves to cut rates, said Goolsbee, who is a nonvoting member this year of the rate-setting Federal Open Market Committee.
He described himself as a “proud data dog,” and pointed to what he says is “the first rule of the kennel.”
“If you are unclear, stop walking and start sniffing,” he said.
“And with these numbers, we need to do more sniffing.”
“We want to have confidence that we are on this path to 2[%],” he said.
“That’s the thing we have got to pay attention to.”
Housing inflation is a key area to watch, Goolsbee said.
“That’s the one that has not behaved as we thought it would,” he said.
Shelter costs, which make up about one-third of the weighting in the CPI, rose 5.7% in March from a year ago.
“The market rent inflation is well down, but it hasn’t flowed through into the official measure,” he said.
“If it doesn’t — I still think it will — but if it doesn’t, I think we’re going to have a hard time."
"It’s definitely going to be more difficult to get to 2% overall if we do not see progress.”
https://www.cnbc.com/2024/04/19/feds-go ... cuts-.html
Re: THE ECONOMY
REUTERS
"Fed policy on hold because of 'stalled' progress on inflation, Goolsbee says"
By Ann Saphir
April 19, 2024
April 19 (Reuters) - Progress on bringing down inflation has "stalled" this year, Chicago Federal Reserve President Austan Goolsbee said on Friday, becoming the latest U.S. central banker to drop an earlier focus on the coming need for interest rate cuts.
"Given the strength of the labor market and progress on easing inflation seen over a longer arc, I believe the Fed's current restrictive monetary policy is appropriate," Goolsbee said during an appearance before a business journalism group in Chicago.
"I think we have to recalibrate and we have to wait and see."
The belief that rates will need to stay high for longer to get price pressures moving down again is now the dominant view at the Fed.
The U.S. central bank has kept its policy rate in the 5.25%-5.50% range since last July, and just a few weeks ago most policymakers, including Goolsbee, thought at least three rate cuts this year would be appropriate.
Three months of higher-than-expected inflation data "can't be dismissed," and the Fed will need to determine if continued strong growth in the economy and job market is a sign of overheating, Goolsbee said.
Though higher productivity and labor force participation, driven partly by immigration, suggest there is "space for progress" on services inflation, he said, persistently high housing inflation remains the main threat to price stability.
"It is supposed to have been falling," he said, citing the decline in market data on new leases.
"If it doesn't, it will be hard to see a smooth path back to our 2% inflation goal."
Goolsbee notably did not rule out a fresh rate hike in the face of disappointingly sticky inflation, but he also said the Fed may need to reduce borrowing costs if inflation resumes its decline.
"We're just trying to figure out ... what is necessary, how restrictive do we need to be ... we have weeks, months to find out," he said.
"Ultimately the proper policy going forward will depend on the data."
Economists and traders now expect the Fed will hold rates steady at its next three policy meetings, with a rate cut coming at the Sept. 17-18 session.
Financial market bets against any more than one reduction in borrowing costs this year also have risen.
Reporting by Ann Saphir; Editing by Paul Simao
https://www.reuters.com/markets/us/feds ... 024-04-19/
"Fed policy on hold because of 'stalled' progress on inflation, Goolsbee says"
By Ann Saphir
April 19, 2024
April 19 (Reuters) - Progress on bringing down inflation has "stalled" this year, Chicago Federal Reserve President Austan Goolsbee said on Friday, becoming the latest U.S. central banker to drop an earlier focus on the coming need for interest rate cuts.
"Given the strength of the labor market and progress on easing inflation seen over a longer arc, I believe the Fed's current restrictive monetary policy is appropriate," Goolsbee said during an appearance before a business journalism group in Chicago.
"I think we have to recalibrate and we have to wait and see."
The belief that rates will need to stay high for longer to get price pressures moving down again is now the dominant view at the Fed.
The U.S. central bank has kept its policy rate in the 5.25%-5.50% range since last July, and just a few weeks ago most policymakers, including Goolsbee, thought at least three rate cuts this year would be appropriate.
Three months of higher-than-expected inflation data "can't be dismissed," and the Fed will need to determine if continued strong growth in the economy and job market is a sign of overheating, Goolsbee said.
Though higher productivity and labor force participation, driven partly by immigration, suggest there is "space for progress" on services inflation, he said, persistently high housing inflation remains the main threat to price stability.
"It is supposed to have been falling," he said, citing the decline in market data on new leases.
"If it doesn't, it will be hard to see a smooth path back to our 2% inflation goal."
Goolsbee notably did not rule out a fresh rate hike in the face of disappointingly sticky inflation, but he also said the Fed may need to reduce borrowing costs if inflation resumes its decline.
"We're just trying to figure out ... what is necessary, how restrictive do we need to be ... we have weeks, months to find out," he said.
"Ultimately the proper policy going forward will depend on the data."
Economists and traders now expect the Fed will hold rates steady at its next three policy meetings, with a rate cut coming at the Sept. 17-18 session.
Financial market bets against any more than one reduction in borrowing costs this year also have risen.
Reporting by Ann Saphir; Editing by Paul Simao
https://www.reuters.com/markets/us/feds ... 024-04-19/
Re: THE ECONOMY
REUTERS
"Fed report cites inflation, US election as key financial stability risks"
By Howard Schneider and Pete Schroeder
April 19, 2024
WASHINGTON, April 19 (Reuters) - Persistent inflation and higher-for-longer interest rates were cited as key risks to financial stability in the Federal Reserve's latest survey of U.S. central bank contacts, with geopolitical troubles and the 2024 U.S. presidential election also mentioned as "a potentially significant source of shocks."
"Contacts noted several areas of uncertainty including trade policy and other foreign policy issues related to escalating geopolitical tensions," the Fed said on Friday in its semi-annual survey of 25 market participants, academics and other contacts.
"They also noted policy uncertainty associated with the U.S. elections in November," when the Democratic incumbent Joe Biden faces Republican former President Donald Trump.
The survey results were included as part of the Fed's latest Financial Stability Report, which looks at issues like leverage and risk-taking throughout the economy to try to identify potential trouble spots.
The report was released more than two years after the Fed launched the most aggressive interest rate hiking cycle since the 1980s in a bid to slow a surge in inflation, a move that was broadly predicted to tip the economy into recession and aggravate stresses in the financial sector.
But the latest report, much like those preceding it through the Fed's battle with inflation, shows little evidence of widespread risks to the financial system despite borrowing costs remaining at their highest levels in a quarter of a century.
But that overall impression of resilience also suggests potential problems for Fed officials who feel the economy needs to slow in order for inflation to sustainably return to the central bank's 2% target.
The strength of household and business balance sheets, the stability of the banks, and the lack of imminent bubbles or other threats suggest that a slowdown won't come through financial or credit channels that have typically been an important part of monetary policy transmission.
Contacts were interviewed through March, when Fed officials began to have doubts about an ongoing drop in inflation and noted that rate cuts might not come as fast as expected.
While that added to uncertainty about monetary policy, which along with inflation was the most cited risk, the level of "policy uncertainty" flowing from the escalation of violence in Israel and throughout the Middle East, the ongoing war in Ukraine, and the state of U.S. politics, was the second-most cited threat to the financial system.
Across what has become the Fed's standard framework for assessing financial vulnerabilities, however, the system was characterized as in largely steady shape despite high policy interest rates and the ongoing inflation fight.
There were some areas of concern, including declining values for commercial real estate and rising leverage among some of the bigger hedge funds.
Asset values, including stocks and real estate, were high.
But private debt as a share of national economic output declined, businesses maintained a "robust" capacity to service debt, and household debt was "modest."
"The banking system remained sound and resilient," with strong capital and liquidity levels, the Fed said in the report.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/markets/us/fed- ... 024-04-19/
"Fed report cites inflation, US election as key financial stability risks"
By Howard Schneider and Pete Schroeder
April 19, 2024
WASHINGTON, April 19 (Reuters) - Persistent inflation and higher-for-longer interest rates were cited as key risks to financial stability in the Federal Reserve's latest survey of U.S. central bank contacts, with geopolitical troubles and the 2024 U.S. presidential election also mentioned as "a potentially significant source of shocks."
"Contacts noted several areas of uncertainty including trade policy and other foreign policy issues related to escalating geopolitical tensions," the Fed said on Friday in its semi-annual survey of 25 market participants, academics and other contacts.
"They also noted policy uncertainty associated with the U.S. elections in November," when the Democratic incumbent Joe Biden faces Republican former President Donald Trump.
The survey results were included as part of the Fed's latest Financial Stability Report, which looks at issues like leverage and risk-taking throughout the economy to try to identify potential trouble spots.
The report was released more than two years after the Fed launched the most aggressive interest rate hiking cycle since the 1980s in a bid to slow a surge in inflation, a move that was broadly predicted to tip the economy into recession and aggravate stresses in the financial sector.
But the latest report, much like those preceding it through the Fed's battle with inflation, shows little evidence of widespread risks to the financial system despite borrowing costs remaining at their highest levels in a quarter of a century.
But that overall impression of resilience also suggests potential problems for Fed officials who feel the economy needs to slow in order for inflation to sustainably return to the central bank's 2% target.
The strength of household and business balance sheets, the stability of the banks, and the lack of imminent bubbles or other threats suggest that a slowdown won't come through financial or credit channels that have typically been an important part of monetary policy transmission.
Contacts were interviewed through March, when Fed officials began to have doubts about an ongoing drop in inflation and noted that rate cuts might not come as fast as expected.
While that added to uncertainty about monetary policy, which along with inflation was the most cited risk, the level of "policy uncertainty" flowing from the escalation of violence in Israel and throughout the Middle East, the ongoing war in Ukraine, and the state of U.S. politics, was the second-most cited threat to the financial system.
Across what has become the Fed's standard framework for assessing financial vulnerabilities, however, the system was characterized as in largely steady shape despite high policy interest rates and the ongoing inflation fight.
There were some areas of concern, including declining values for commercial real estate and rising leverage among some of the bigger hedge funds.
Asset values, including stocks and real estate, were high.
But private debt as a share of national economic output declined, businesses maintained a "robust" capacity to service debt, and household debt was "modest."
"The banking system remained sound and resilient," with strong capital and liquidity levels, the Fed said in the report.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/markets/us/fed- ... 024-04-19/
Re: THE ECONOMY
REUTERS
"Micron set to get $6.1 bln in chip grants from US"
By Reuters
April 18, 2024
April 18 (Reuters) - Memory chip maker Micron Technology is set to receive $6.1 billion in grants from the U.S. Commerce Department to help pay for domestic chip factory projects, Democratic U.S. Senate Majority Leader Chuck Schumer said on Thursday.
The award, which is not yet finalized, will fund chipmaking facilities in New York and Idaho from the CHIPS & Science law, the New York senator said in a statement.
“This monumental and historic federal investment will power and propel Micron to bring its transformative $100+ billion four-fab project in central New York to life, creating an estimated 50,000 jobs,” he said.
Micron plans to build a complex of chip plants in New York over the next 20 years, the senator added.
The news caps off a string of Chips Act grants announced by the Biden administration in recent weeks as the United States seeks to reduce reliance on China and Taiwan and supercharge its own lagging chip production.
The U.S. share of global semiconductor manufacturing capacity has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association (SIA).
Lawmakers have warned that U.S. dependence on chips manufactured in Taiwan by the world's top contract chip manufacturer, is risky because China claims the self-governed island as its territory and has reserved the right to use force to retake it.
Intel won $8.5 billion in grants last month while Taiwan's TSMC clinched $6.6 billion in April to build out its American production.
Samsung followed this week with a $6.4 billion award to boost production in Texas.
The historic Chips Act allocates $52.6 billion to support the sector.
The Commerce Department is dedicating $28 billion for government subsidies for advanced chips manufacturing - although it has more than $70 billion in requests - and also has $75 billion in lending authority.
New York Governor Kathy Hochul said in a statement that the largest private investment in American history is on its way to Central New York.
Reporting by Kanjyik Ghosh, additional reporting by Angela Christy; Editing by Shailesh Kuber and Subhranshu Sahu and Chizu Nomiyama
https://www.reuters.com/technology/micr ... 024-04-17/
"Micron set to get $6.1 bln in chip grants from US"
By Reuters
April 18, 2024
April 18 (Reuters) - Memory chip maker Micron Technology is set to receive $6.1 billion in grants from the U.S. Commerce Department to help pay for domestic chip factory projects, Democratic U.S. Senate Majority Leader Chuck Schumer said on Thursday.
The award, which is not yet finalized, will fund chipmaking facilities in New York and Idaho from the CHIPS & Science law, the New York senator said in a statement.
“This monumental and historic federal investment will power and propel Micron to bring its transformative $100+ billion four-fab project in central New York to life, creating an estimated 50,000 jobs,” he said.
Micron plans to build a complex of chip plants in New York over the next 20 years, the senator added.
The news caps off a string of Chips Act grants announced by the Biden administration in recent weeks as the United States seeks to reduce reliance on China and Taiwan and supercharge its own lagging chip production.
The U.S. share of global semiconductor manufacturing capacity has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association (SIA).
Lawmakers have warned that U.S. dependence on chips manufactured in Taiwan by the world's top contract chip manufacturer, is risky because China claims the self-governed island as its territory and has reserved the right to use force to retake it.
Intel won $8.5 billion in grants last month while Taiwan's TSMC clinched $6.6 billion in April to build out its American production.
Samsung followed this week with a $6.4 billion award to boost production in Texas.
The historic Chips Act allocates $52.6 billion to support the sector.
The Commerce Department is dedicating $28 billion for government subsidies for advanced chips manufacturing - although it has more than $70 billion in requests - and also has $75 billion in lending authority.
New York Governor Kathy Hochul said in a statement that the largest private investment in American history is on its way to Central New York.
Reporting by Kanjyik Ghosh, additional reporting by Angela Christy; Editing by Shailesh Kuber and Subhranshu Sahu and Chizu Nomiyama
https://www.reuters.com/technology/micr ... 024-04-17/
Re: THE ECONOMY
THE CAPE CHARLES MIRROR APRIL 19, 2024 AT 8:18 PM
Paul Plante says:
And hey, hey hey, people, JOBS JOBS JOBS!
Millions and gazillions of them, all high-paying union manufacturing jobs thanks to BUILD BACK BETTER BIDE-O-NOMICS, Joe Biden’s ultra-new, ultra-chic economic plan that is building a new American economy to replace the other American economy with this one being built from the bottom up and the middle out, so that everybody who isn’t yet in the middle class, the class everybody knows really built America, and the class to be in, can get into the middle class and be just like everybody else in the middle class with the Escalade in the driveway for her, the Corvette and super-loaded fwd pick-up for he, and the McMansion on its own eighth-acre, all thanks to Joe Biden and BIDE-O-NOMICS!
Joe Biden is good!
Joe Biden is great!
Joe Biden is going to give us all chocolate cake!
But if that is the case, where are all these JOBS, JOBS, JOBS?
Consider a Reuters article titled “Smaller US manufacturers warm to Biden’s big industrial plan, survey shows” by Timothy Aeppel on April 16, 2024, where we had as follows:
April 16 (Reuters) – America’s small and mid-sized manufacturers may be warming up to the Biden administration’s push for an aggressive industrial policy.
Biden’s industrial policy, headlined by legislation passed in 2022 that sparked a surge of factory construction, is aimed at boosting semiconductors, electric vehicles and green technologies, as well as other sectors.
The efforts so far have not produced many manufacturing jobs.
end quotes
I love that last sentence because it tells the ******* truth about BIDE-O-NOMICS, as opposed to the BULL**** Joe Biden and his crowd keep spewing, which thought takes us back to that story, to wit:
And so, as the presidential campaign shifts into higher gear ahead of November’s election, Biden is touring factories to tout his accomplishments, especially to voters in battleground states.
end quote
And here I am, helping Joe “tout” his accomplishments by pointing out he doesn’t have any to tout which takes us back to that story about BIDEN TRICKLE-DOWN BIDE-O-NOMICS, to wit:
“This is the first time in a long time that we’ve had a deliberate industrial strategy being pushed by the executive branch – that’s unique,” said Randy Altschuler, chief executive of Xometry.
Altschuler said federal investments have yet to filter down to smaller producers, with many of the most high-profile projects favoring giants like Intel and Samsung, which are both planning new semiconductor plants.
“You’re going to see a bigger benefit (for smaller companies) further down the road,” said Altschuler, as those projects create demand for the underlying pipeline of goods and services needed to complete and supply those factories.
end quotes
Yes, people, Joe Biden is using taxpayer dollars to reward the richest corporations in the world and the richest people in the US in his own version of TOP-DOWN, TRICKLE-DOWN economics, which takes us back for more on Joe Biden’s CENTRALLY-PLANNED ECONOMY where it is Joe Biden who gets to pick who the winners and losers are going to be, to wit:
Altschuler, who ran for Congress in New York in 2010 and lost and remains a registered Republican, said the political divide over industrial policy – which was once opposed by many Republicans as picking winners and losers – has narrowed sharply in recent years.
end quotes
Which brings us to another Reuters article titled “Philly Fed manufacturing gauge charges to 2-year high” on April 18, 2024, where we have more reality about JOBS, JOBS, JOBS, to wit:
Factory employment, meanwhile, continued to fall, dropping to its lowest level overall since May 2020, in keeping with other gauges showing sluggish employment in the sector.
Manufacturing job growth has been next to non-existent over the past year, with the Labor Department’s measure of new factory jobs averaging just 2,000 a month in that span, among the weakest-performing industries in the private sector.
end quotes
That’s what Joe’s government is saying, while this is what Joe himself was spinning in Joe’s so-called State of the Union Address on 7 March 2024, to wit:
Folks, I inherited an economy that was on the brink.
Now, our economy is literally the envy of the world.
Fifteen million new jobs in just three years.
A record.
A record.
end quotes
Yeah, right, Joe, so other than on paper, where are they actually?
http://www.capecharlesmirror.com/paul-p ... ent-919498
Paul Plante says:
And hey, hey hey, people, JOBS JOBS JOBS!
Millions and gazillions of them, all high-paying union manufacturing jobs thanks to BUILD BACK BETTER BIDE-O-NOMICS, Joe Biden’s ultra-new, ultra-chic economic plan that is building a new American economy to replace the other American economy with this one being built from the bottom up and the middle out, so that everybody who isn’t yet in the middle class, the class everybody knows really built America, and the class to be in, can get into the middle class and be just like everybody else in the middle class with the Escalade in the driveway for her, the Corvette and super-loaded fwd pick-up for he, and the McMansion on its own eighth-acre, all thanks to Joe Biden and BIDE-O-NOMICS!
Joe Biden is good!
Joe Biden is great!
Joe Biden is going to give us all chocolate cake!
But if that is the case, where are all these JOBS, JOBS, JOBS?
Consider a Reuters article titled “Smaller US manufacturers warm to Biden’s big industrial plan, survey shows” by Timothy Aeppel on April 16, 2024, where we had as follows:
April 16 (Reuters) – America’s small and mid-sized manufacturers may be warming up to the Biden administration’s push for an aggressive industrial policy.
Biden’s industrial policy, headlined by legislation passed in 2022 that sparked a surge of factory construction, is aimed at boosting semiconductors, electric vehicles and green technologies, as well as other sectors.
The efforts so far have not produced many manufacturing jobs.
end quotes
I love that last sentence because it tells the ******* truth about BIDE-O-NOMICS, as opposed to the BULL**** Joe Biden and his crowd keep spewing, which thought takes us back to that story, to wit:
And so, as the presidential campaign shifts into higher gear ahead of November’s election, Biden is touring factories to tout his accomplishments, especially to voters in battleground states.
end quote
And here I am, helping Joe “tout” his accomplishments by pointing out he doesn’t have any to tout which takes us back to that story about BIDEN TRICKLE-DOWN BIDE-O-NOMICS, to wit:
“This is the first time in a long time that we’ve had a deliberate industrial strategy being pushed by the executive branch – that’s unique,” said Randy Altschuler, chief executive of Xometry.
Altschuler said federal investments have yet to filter down to smaller producers, with many of the most high-profile projects favoring giants like Intel and Samsung, which are both planning new semiconductor plants.
“You’re going to see a bigger benefit (for smaller companies) further down the road,” said Altschuler, as those projects create demand for the underlying pipeline of goods and services needed to complete and supply those factories.
end quotes
Yes, people, Joe Biden is using taxpayer dollars to reward the richest corporations in the world and the richest people in the US in his own version of TOP-DOWN, TRICKLE-DOWN economics, which takes us back for more on Joe Biden’s CENTRALLY-PLANNED ECONOMY where it is Joe Biden who gets to pick who the winners and losers are going to be, to wit:
Altschuler, who ran for Congress in New York in 2010 and lost and remains a registered Republican, said the political divide over industrial policy – which was once opposed by many Republicans as picking winners and losers – has narrowed sharply in recent years.
end quotes
Which brings us to another Reuters article titled “Philly Fed manufacturing gauge charges to 2-year high” on April 18, 2024, where we have more reality about JOBS, JOBS, JOBS, to wit:
Factory employment, meanwhile, continued to fall, dropping to its lowest level overall since May 2020, in keeping with other gauges showing sluggish employment in the sector.
Manufacturing job growth has been next to non-existent over the past year, with the Labor Department’s measure of new factory jobs averaging just 2,000 a month in that span, among the weakest-performing industries in the private sector.
end quotes
That’s what Joe’s government is saying, while this is what Joe himself was spinning in Joe’s so-called State of the Union Address on 7 March 2024, to wit:
Folks, I inherited an economy that was on the brink.
Now, our economy is literally the envy of the world.
Fifteen million new jobs in just three years.
A record.
A record.
end quotes
Yeah, right, Joe, so other than on paper, where are they actually?
http://www.capecharlesmirror.com/paul-p ... ent-919498
Re: THE ECONOMY
REUTERS
"US consumers on lower incomes face loan stress while banks pull back"
By Nupur Anand
April 22, 2024
NEW YORK, April 22 (Reuters) - U.S. borrowers on lower incomes are increasingly struggling to keep up with their loan payments, according to recent data and bank executives, prompting banks to become more cautious about dishing out credit cards and car loans.
A growing number of Americans have seen their savings dwindle as rising prices squeeze budgets while interest rates stay high, bankers and economists said.
The deterioration in household finances for those earning less than $45,000 contrasts with financial resilience among those on higher incomes.
Austan Goolsbee, Chicago Federal Reserve Bank President, said on Friday that consumer delinquencies were one of the most concerning economic data points at the moment.
"If the delinquency rate of consumer loans starts rising, that is often a leading indicator things are about to get worse," he said.
First-time and low-income borrowers are experiencing higher default rates on their loans than people with larger incomes, said Arijit Roy, who runs the consumer business at U.S. Bancorp.
At Bank of America, net charge-offs, or debts that are unlikely to be recovered, rose to $1.5 billion in the first quarter from $807 million a year earlier, mainly from credit cards, the bank reported on Tuesday.
Rival JPMorgan Chase's said its charge-offs nearly doubled to $2 billion in the same quarter, while they also increased at Citigroup and Wells Fargo.
Bank of America is seeing "cracks" in the finances of borrowers with below-prime credit scores whose household spending is affected by higher interest rates and inflation, Chief Financial Officer Alastair Borthwick told analysts on an earnings call.
But its customers typically have higher credit scores, and their finances are holding up well, he added.
Capital One, Old National Bank, and First Mortgage Direct are among the banks who serve more subprime customers with credit scores in the roughly 300 to 600 range, according to BankRate.
The lenders did not immediately respond to a request seeking comment.
While lenders earn money from interest payments, they seek to avoid situations in which customers fall so far behind on loans that they have to be written off.
"Banks are trying to come up with early-warning signals for customers about their bill payments, offering debt counseling and educating the customers more so that they can stay on track," said Tom Dent, senior vice president at the Consumer Bankers Association, an industry group.
LENDING CAUTION
The burgeoning strains have prompted lenders to become more wary.
"During situations like these, many banks adopt a cautious outlook and begin to optimize their balance sheets by utilizing pricing strategies," Roy said.
Loan volumes declined, and credit standards tightened further as banks raised borrowing costs in March, according to a survey from Federal Reserve Bank of Dallas.
The poll focused on lenders headquartered in Dallas, Texas, but typically follows national trends.
Loan officers polled separately by the Federal Reserve also said they were tightening lending standards, including for credit cards and auto loans, according to a quarterly survey in January.
A significant number of banks expected standards for credit cards to become even tougher.
The pullback signals loan growth - a key source of income - will be muted for conservative lenders, executives said.
Meanwhile, recent economic data have bolstered expectations that the Fed will not cut interest rates until September.
The elevated borrowing costs could further exacerbate strains for stretched borrowers.
But banking giants said most consumers were in good shape.
JPMorgan CEO Jamie Dimon told analysts this month that Americans were still spending, although he noted those on lower incomes had largely used up their excess money.
"We are okay right now," Dimon said.
"It does not mean we're okay down the road."
DIVERGENT CONSUMERS
Credit cards were the most notable area of weakness, while defaults on buy-now, pay-later loans were also rising, said Mark Zandi, chief economist at Moody's Analytics.
"It is a tale of two consumers," he said.
"Back in the financial crisis, people were defaulting primarily on their mortgages but now it's credit cards that are unsecured and have the highest rate of interest."
Still, credit card and auto delinquency rates appear to be peaking, Moody's said in a report earlier this month.
U.S. household debt has surged to an all-time high, and Americans have been borrowing more on credit cards, with balances crossing the $1 trillion mark for the first time last year.
Pandemic stimulus programs had burnished finances for many people who got credit cards, said Brendan Coughlin, head of consumer banking at Citizens Financial.
But financial buffers have shrunk as Americans burned through stimulus payments and loan forbearance programs ended, leaving many consumers overextended.
"Credit scores were artificially inflated with increased savings and lower spending," said Coughlin.
Credit card delinquencies are a key indicator to watch because they are "a representation of people living beyond their means," he added.
Americans saved 3.6% of their disposable income in February, down from 4.7% a year earlier, according to U.S. Bureau of Economic Analysis data.
Overall consumer delinquencies stood at 0.98% in February across loan categories including credit cards, auto loans and mortgages, according to data from VantageScore, a credit score modeling company.
It highlighted that the figure has been rising over the last few months.
Consumers on low incomes, which it defines as less than $45,000 a year, had greater financial stresses, and the group of U.S. borrowers with the highest credit scores is shrinking, the data showed.
Younger Americans are also more likely to be delinquent than the over-40s, the data showed.
Reporting by Nupur Anand in New York, editing by Lananh Nguyen and Rosalba O'Brien
https://www.reuters.com/markets/us/us-c ... 024-04-22/
"US consumers on lower incomes face loan stress while banks pull back"
By Nupur Anand
April 22, 2024
NEW YORK, April 22 (Reuters) - U.S. borrowers on lower incomes are increasingly struggling to keep up with their loan payments, according to recent data and bank executives, prompting banks to become more cautious about dishing out credit cards and car loans.
A growing number of Americans have seen their savings dwindle as rising prices squeeze budgets while interest rates stay high, bankers and economists said.
The deterioration in household finances for those earning less than $45,000 contrasts with financial resilience among those on higher incomes.
Austan Goolsbee, Chicago Federal Reserve Bank President, said on Friday that consumer delinquencies were one of the most concerning economic data points at the moment.
"If the delinquency rate of consumer loans starts rising, that is often a leading indicator things are about to get worse," he said.
First-time and low-income borrowers are experiencing higher default rates on their loans than people with larger incomes, said Arijit Roy, who runs the consumer business at U.S. Bancorp.
At Bank of America, net charge-offs, or debts that are unlikely to be recovered, rose to $1.5 billion in the first quarter from $807 million a year earlier, mainly from credit cards, the bank reported on Tuesday.
Rival JPMorgan Chase's said its charge-offs nearly doubled to $2 billion in the same quarter, while they also increased at Citigroup and Wells Fargo.
Bank of America is seeing "cracks" in the finances of borrowers with below-prime credit scores whose household spending is affected by higher interest rates and inflation, Chief Financial Officer Alastair Borthwick told analysts on an earnings call.
But its customers typically have higher credit scores, and their finances are holding up well, he added.
Capital One, Old National Bank, and First Mortgage Direct are among the banks who serve more subprime customers with credit scores in the roughly 300 to 600 range, according to BankRate.
The lenders did not immediately respond to a request seeking comment.
While lenders earn money from interest payments, they seek to avoid situations in which customers fall so far behind on loans that they have to be written off.
"Banks are trying to come up with early-warning signals for customers about their bill payments, offering debt counseling and educating the customers more so that they can stay on track," said Tom Dent, senior vice president at the Consumer Bankers Association, an industry group.
LENDING CAUTION
The burgeoning strains have prompted lenders to become more wary.
"During situations like these, many banks adopt a cautious outlook and begin to optimize their balance sheets by utilizing pricing strategies," Roy said.
Loan volumes declined, and credit standards tightened further as banks raised borrowing costs in March, according to a survey from Federal Reserve Bank of Dallas.
The poll focused on lenders headquartered in Dallas, Texas, but typically follows national trends.
Loan officers polled separately by the Federal Reserve also said they were tightening lending standards, including for credit cards and auto loans, according to a quarterly survey in January.
A significant number of banks expected standards for credit cards to become even tougher.
The pullback signals loan growth - a key source of income - will be muted for conservative lenders, executives said.
Meanwhile, recent economic data have bolstered expectations that the Fed will not cut interest rates until September.
The elevated borrowing costs could further exacerbate strains for stretched borrowers.
But banking giants said most consumers were in good shape.
JPMorgan CEO Jamie Dimon told analysts this month that Americans were still spending, although he noted those on lower incomes had largely used up their excess money.
"We are okay right now," Dimon said.
"It does not mean we're okay down the road."
DIVERGENT CONSUMERS
Credit cards were the most notable area of weakness, while defaults on buy-now, pay-later loans were also rising, said Mark Zandi, chief economist at Moody's Analytics.
"It is a tale of two consumers," he said.
"Back in the financial crisis, people were defaulting primarily on their mortgages but now it's credit cards that are unsecured and have the highest rate of interest."
Still, credit card and auto delinquency rates appear to be peaking, Moody's said in a report earlier this month.
U.S. household debt has surged to an all-time high, and Americans have been borrowing more on credit cards, with balances crossing the $1 trillion mark for the first time last year.
Pandemic stimulus programs had burnished finances for many people who got credit cards, said Brendan Coughlin, head of consumer banking at Citizens Financial.
But financial buffers have shrunk as Americans burned through stimulus payments and loan forbearance programs ended, leaving many consumers overextended.
"Credit scores were artificially inflated with increased savings and lower spending," said Coughlin.
Credit card delinquencies are a key indicator to watch because they are "a representation of people living beyond their means," he added.
Americans saved 3.6% of their disposable income in February, down from 4.7% a year earlier, according to U.S. Bureau of Economic Analysis data.
Overall consumer delinquencies stood at 0.98% in February across loan categories including credit cards, auto loans and mortgages, according to data from VantageScore, a credit score modeling company.
It highlighted that the figure has been rising over the last few months.
Consumers on low incomes, which it defines as less than $45,000 a year, had greater financial stresses, and the group of U.S. borrowers with the highest credit scores is shrinking, the data showed.
Younger Americans are also more likely to be delinquent than the over-40s, the data showed.
Reporting by Nupur Anand in New York, editing by Lananh Nguyen and Rosalba O'Brien
https://www.reuters.com/markets/us/us-c ... 024-04-22/
Re: THE ECONOMY
REUTERS
"US business activity cools in April; inflation measures mixed"
By Reuters
April 23, 2024
April 23 (Reuters) - U.S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply, suggesting some possible relief ahead as the Federal Reserve looks for signs that the economy is ebbing enough to bring inflation down further.
S&P Global said on Tuesday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March.
A reading above 50 indicates expansion in the private sector.
The slowdown reflected weaker rates of growth in both the manufacturing and services sectors, with activity easing to three- and five-month lows, respectively.
That in turn meant employment, which the Fed is watching closely for indications of a drop off, fell for the first time since June 2020, with the reduction focused on services.
The survey suggested that the economy lost momentum at the beginning of the second quarter compared to the January-March quarter.
According to a Reuters survey of economists, GDP likely increased at a 2.4% annualized rate last quarter.
The United States continues to outperform its global peers, despite 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to tame inflation.
The Fed has recently been spooked by a string of stronger-than-expected inflation and employment readings, which suggested its fight to bring inflation back down to the central bank's 2% target rate has stalled or even reversed.
The Fed meets next week and is expected to leave its policy rate unchanged in the current 5.25%-5.50% range.
Last week, a chorus of Fed officials backed away from signaling at least one rate cut this year, instead saying only that recent data meant monetary policy needs to be restrictive for longer.
The S&P Global survey's measure of new orders received by private businesses dropped to 48.4 from 51.7 in March, the first decline in six months, while its measure of prices paid for inputs declined to 56.5, off the six-month high of 58.7 reached in March but still a solid rate.
The output prices gauge fell to 54.1, off the ten-month high of 56.4 recorded in March, but also still elevated.
In a reversal of trends seen last year when wage-related services sector price pressures intensified while manufacturing input costs cooled, higher raw material and fuel prices resulted in the fastest rise in manufacturing input costs in a year in April, with manufacturing now recording steeper inflation increases in three of the past four months.
Service providers, by contrast, reported the second-lowest overall cost increase in three and half years.
"The deterioration of demand and cooling of the labor market fed through to lower price pressures, as April saw a welcome easing in rates of increase for selling prices for both goods and services," said Chris Williamson, chief business economist at S&P Global Market Intelligence.
"Firms' future output expectations slipped to a five-month low amid heightened concern about the outlook."
Manufacturing entered contraction territory, with the survey's flash manufacturing PMI slipping to 49.9 this month from 51.9 in March.
New orders shrank slightly while growth in employment slowed, albeit modestly, and supply chains showed signs of spare capacity.
The survey's flash services sector PMI dipped to 50.9 in April from 51.7 in the prior month.
Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-b ... 024-04-23/
"US business activity cools in April; inflation measures mixed"
By Reuters
April 23, 2024
April 23 (Reuters) - U.S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply, suggesting some possible relief ahead as the Federal Reserve looks for signs that the economy is ebbing enough to bring inflation down further.
S&P Global said on Tuesday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March.
A reading above 50 indicates expansion in the private sector.
The slowdown reflected weaker rates of growth in both the manufacturing and services sectors, with activity easing to three- and five-month lows, respectively.
That in turn meant employment, which the Fed is watching closely for indications of a drop off, fell for the first time since June 2020, with the reduction focused on services.
The survey suggested that the economy lost momentum at the beginning of the second quarter compared to the January-March quarter.
According to a Reuters survey of economists, GDP likely increased at a 2.4% annualized rate last quarter.
The United States continues to outperform its global peers, despite 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to tame inflation.
The Fed has recently been spooked by a string of stronger-than-expected inflation and employment readings, which suggested its fight to bring inflation back down to the central bank's 2% target rate has stalled or even reversed.
The Fed meets next week and is expected to leave its policy rate unchanged in the current 5.25%-5.50% range.
Last week, a chorus of Fed officials backed away from signaling at least one rate cut this year, instead saying only that recent data meant monetary policy needs to be restrictive for longer.
The S&P Global survey's measure of new orders received by private businesses dropped to 48.4 from 51.7 in March, the first decline in six months, while its measure of prices paid for inputs declined to 56.5, off the six-month high of 58.7 reached in March but still a solid rate.
The output prices gauge fell to 54.1, off the ten-month high of 56.4 recorded in March, but also still elevated.
In a reversal of trends seen last year when wage-related services sector price pressures intensified while manufacturing input costs cooled, higher raw material and fuel prices resulted in the fastest rise in manufacturing input costs in a year in April, with manufacturing now recording steeper inflation increases in three of the past four months.
Service providers, by contrast, reported the second-lowest overall cost increase in three and half years.
"The deterioration of demand and cooling of the labor market fed through to lower price pressures, as April saw a welcome easing in rates of increase for selling prices for both goods and services," said Chris Williamson, chief business economist at S&P Global Market Intelligence.
"Firms' future output expectations slipped to a five-month low amid heightened concern about the outlook."
Manufacturing entered contraction territory, with the survey's flash manufacturing PMI slipping to 49.9 this month from 51.9 in March.
New orders shrank slightly while growth in employment slowed, albeit modestly, and supply chains showed signs of spare capacity.
The survey's flash services sector PMI dipped to 50.9 in April from 51.7 in the prior month.
Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-b ... 024-04-23/