REUTERS
"US labor market cooling; unemployment rate rises to two-year high of 3.9%"
By Lucia Mutikani
March 8, 2024
summary
* Nonfarm payrolls increase 275,000 in February
* December, January payrolls revised lower by 167,000
* Unemployment rate rises to 3.9% from 3.7%
* Average hourly earnings gain 0.1%; up 4.3% year-on-year
WASHINGTON, March 8 (Reuters) - U.S. job growth accelerated in February, but that likely masks underlying softening labor market conditions as the unemployment rate increased to a two-year high of 3.9%.
The Labor Department's closely watched employment report on Friday also showed wages rising moderately last month.
The jump in the unemployment rate after holding at 3.7% for three straight months reflected a further decline in household employment.
The mixed report boosted the odds of the Federal Reserve cutting interest rates by June.
The labor market continues to support the economy, which is outperforming its global pears, even as momentum is ebbing.
"Despite the solid nonfarm payroll gain, the details from this jobs report are far weaker," said Scott Anderson, chief U.S. economist at BMO Capital Markets in San Francisco.
"Labor market rebalancing is underway as advertised by the Fed, opening the door for a soft-landing for the economy and an initial rate cut around the middle of the year."
Nonfarm payrolls increased by 275,000 jobs last month, the survey of establishments showed.
The economy created 167,000 fewer jobs in December and January than previously estimated.
Economists polled by Reuters had forecast 200,000 jobs added in February, with estimates ranging from 125,000 to 286,000.
Payrolls are more than double the roughly 100,000 jobs needed per month to keep up with growth in the working age population.
The smaller household survey from which the unemployment rate is derived showed household employment declining by 184,000 jobs last month.
Applying the methodology used for nonfarm payrolls, household employment decreased by 271,000 jobs, marking the third straight monthly decline.
That left some economists anticipating that February payrolls could be revised lower when the Labor Department's Bureau of Labor Statistics publishes March's employment report.
Solid payrolls suggest the labor market remains strong, while the weak household survey implied layoffs were rising.
There has been a rash of high-profile layoffs, though employers are generally holding on to their workers after struggling to find labor during the COVID-19 pandemic.
"Our main concern is the widening divide between what the establishment nonfarm payroll data is telling us and what the household survey of employment is conveying," said Richard de Chazal, macro analyst at William Blair in London.
"The labor market on the whole is still tight, but the household survey is very clearly telling us that momentum is waning."
Financial markets saw an 80% chance of a first rate cut by June, up from 75% before the report was released.
Since March 2022, the U.S. central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
Fed Chair Jerome Powell told lawmakers this week that rate cuts would "likely be appropriate" later this year, but emphasized they "really will depend on the path of the economy."
Stocks on Wall Street were trading higher.
The dollar fell against a basket of currencies.
U.S. Treasury prices were mixed.
BROAD JOB GAINS
Acyclical sectors such as government and healthcare, which are still rebuilding headcount that was reduced during the pandemic, led employment gains last month.
Nonetheless the breadth of job gains continued to broaden, with 62.6% of industries reporting an increase.
Healthcare payrolls rose by 67,000, driven by hiring in ambulatory healthcare services as well as at hospitals, nursing and residential care facilities.
Government employment increased by 52,000, with gains in both local and federal governments.
Restaurants and bars added 42,000 jobs.
Social assistance payrolls increased by 24,000 jobs, while employment in the transportation and warehousing sector rose by 20,000, amid a rebound in hiring for couriers and messengers, after shedding 70,000 jobs over the last three months.
Construction payrolls increased by 23,000 jobs, likely supported by mild temperatures.
There were also gains in retail employment.
Professional and business services payrolls rose modestly as temporary help services hiring, seen as a harbinger for future hiring, declined for the 22nd consecutive month.
Some economists viewed the persistent decline in temporary help jobs and the 4,000 drop in manufacturing payrolls as signs the labor market was slowing.
Average hourly earnings edged up 0.1% last month after gaining 0.5% in January.
That lowered the year-on-year increase in wages to a still-high 4.3% in February from 4.4% in January.
Despite temperatures warming up after January's freeze, the average workweek rose modestly to 34.3 hours from 34.2 hours.
Total aggregate hours worked rebounded 0.4%, reversing January's drop.
Economists expected growth in worker productivity to slow to around a 1.0% annualized rate this quarter following solid gains since the second quarter of 2023.
That would jeopardize expectations of a mid-year rate cut.
"One key risk is that the reduction in productivity gains results in an increase in unit labor costs, which then feeds through to higher price mark-ups," said Brian Bethune, an economics professor at Boston College.
The rise in the unemployment rate to the highest level since January 2022 also reflected 150,000 people joining the labor force.
Other details of the household survey were upbeat.
Fewer people were experiencing long bouts of unemployment in February.
The prime age labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose to 83.5% from 83.3% in January.
The participation rate for women in the 25-54 age group jumped to 77.7% from 77.4% in the prior month.
The prime-age employment-to-population ratio, viewed as a measure of an economy's ability to create employment, climbed to 80.7% from 80.6% in January.
"For those worried about signs of unwelcome heat in the market after the past few months, this report is a welcome cooling breeze," said Nick Bunker, economic research director for North America at Indeed Hiring Lab.
"And if you're concerned about a labor market on unsteady ground, you shouldn't be too frightened."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-j ... 024-03-08/
THE ECONOMY
Re: THE ECONOMY
REUTERS
"TSMC to win more than $5 billion in grants for a US chip plant, Bloomberg reports"
Reuters
March 8, 2024
March 8 (Reuters) - Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, is set to win more than $5 billion in federal grants from the U.S. government for setting up a chipmaking plant in Arizona, Bloomberg News reported on Friday.
The award is yet to be finalized and it is unclear whether TSMC will tap the loans and guarantees also on offer from the 2022 Chips and Science Act, the report said, citing people familiar with the matter.
TSMC and the U.S. Commerce Department did not immediately respond to Reuters requests for comment.
TSMC, which makes chips used in Apple's iPhones, has said it would invest about $40 billion in its Arizona plant, among the largest foreign investments in U.S. history.
The U.S. has been vying to increase domestic semiconductor production through the U.S. CHIPS Act, which was passed in 2022 and provides $52.7 billion in funding, including $39 billion in subsidies for semiconductor production and $11 billion for R&D.
The Biden administration said last month it was awarding $1.5 billion to contract chip manufacturer GlobalFoundries under the Act.
U.S. Commerce Secretary Gina Raimondo had said in February, the department plans to make several funding awards within two months.
TSMC's advanced manufacturing processes are used in the production of Nvidia's industry leading artificial intelligence chips.
The Taiwanese chipmaker had said in January that demand for advanced packaging was very strong and it couldn't offer enough capacity to support customers, which will continue to next year.
Lagging capacity for advanced packaging has been a central bottleneck for the scaling up supply of complex AI chips.
Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber
https://www.reuters.com/technology/tsmc ... 024-03-08/
"TSMC to win more than $5 billion in grants for a US chip plant, Bloomberg reports"
Reuters
March 8, 2024
March 8 (Reuters) - Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, is set to win more than $5 billion in federal grants from the U.S. government for setting up a chipmaking plant in Arizona, Bloomberg News reported on Friday.
The award is yet to be finalized and it is unclear whether TSMC will tap the loans and guarantees also on offer from the 2022 Chips and Science Act, the report said, citing people familiar with the matter.
TSMC and the U.S. Commerce Department did not immediately respond to Reuters requests for comment.
TSMC, which makes chips used in Apple's iPhones, has said it would invest about $40 billion in its Arizona plant, among the largest foreign investments in U.S. history.
The U.S. has been vying to increase domestic semiconductor production through the U.S. CHIPS Act, which was passed in 2022 and provides $52.7 billion in funding, including $39 billion in subsidies for semiconductor production and $11 billion for R&D.
The Biden administration said last month it was awarding $1.5 billion to contract chip manufacturer GlobalFoundries under the Act.
U.S. Commerce Secretary Gina Raimondo had said in February, the department plans to make several funding awards within two months.
TSMC's advanced manufacturing processes are used in the production of Nvidia's industry leading artificial intelligence chips.
The Taiwanese chipmaker had said in January that demand for advanced packaging was very strong and it couldn't offer enough capacity to support customers, which will continue to next year.
Lagging capacity for advanced packaging has been a central bottleneck for the scaling up supply of complex AI chips.
Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber
https://www.reuters.com/technology/tsmc ... 024-03-08/
Re: THE ECONOMY
REUTERS
"Fed's Williams: Neutral rate is likely still low"
By Michael S. Derby
March 8, 2024
March 8 (Reuters) - Federal Reserve Bank of New York President John Williams said Friday that he suspects the "neutral" state of interest rates hasn't risen much in the wake of the coronavirus pandemic.
It's likely that based on the most recent data “the neutral rate is still quite low," Williams said in an appearance in London, referring to a level where interest rates neither boost nor slow the economy.
Williams did not comment on the monetary policy or economic outlook in his appearance, but he reiterated that achieving price stability is a core responsibility of the central bank.
He also said that politics do not factor into the central bank's decision-making process.
In recent comments Williams has said he expects the Fed to lower its interest rate target this year but he has not signaled when he expects that to happen.
Reporting by Michael S. Derby; Editing by Mark Potter and Toby Chopra
https://www.reuters.com/markets/us/feds ... 024-03-08/
"Fed's Williams: Neutral rate is likely still low"
By Michael S. Derby
March 8, 2024
March 8 (Reuters) - Federal Reserve Bank of New York President John Williams said Friday that he suspects the "neutral" state of interest rates hasn't risen much in the wake of the coronavirus pandemic.
It's likely that based on the most recent data “the neutral rate is still quite low," Williams said in an appearance in London, referring to a level where interest rates neither boost nor slow the economy.
Williams did not comment on the monetary policy or economic outlook in his appearance, but he reiterated that achieving price stability is a core responsibility of the central bank.
He also said that politics do not factor into the central bank's decision-making process.
In recent comments Williams has said he expects the Fed to lower its interest rate target this year but he has not signaled when he expects that to happen.
Reporting by Michael S. Derby; Editing by Mark Potter and Toby Chopra
https://www.reuters.com/markets/us/feds ... 024-03-08/
Re: THE ECONOMY
REUTERS
"Yellen says Biden's proposed housing tax credits could boost supply"
By David Lawder and Susan Heavey
March 8, 2024
WASHINGTON, March 8 (Reuters) - President Joe Biden's proposed tax credits for certain home buyers and sellers could help boost the nation's housing supply and make homes more affordable, U.S. Treasury Secretary Janet Yellen said on Friday, a day after the president unveiled the proposal in his annual State of the Union speech.
Yellen said in an interview on MSNBC that Biden's top economic priority was helping Americans deal with higher prices and major living expenses, including the high cost of housing.
The White House said the proposed credit would provide middle-class first-time homebuyers with an annual tax credit of $5,000 a year for two years -- the equivalent of cutting interest rates by more than 1.5 percentage points on the median-priced home.
To encourage more homeowners to sell their "starter homes" to these buyers, Biden is proposing a one-year, $10,000 tax credit, which would apply to homes below their area's median home price.
Many of these buyers are locked into low mortgage rates, and the credit is aimed at offsetting higher mortgage costs for a "trade-up" or downsized home.
According to a White House fact sheet, the credits will aid some 3.5 million first-time homebuyers and 3 million sellers.
Based on credit rates, that would cost some $65 billion over two years.
Asked on MSNBC whether the credits could overheat the economy, Yellen said Biden wanted to make sure that middle-class families could afford to buy homes.
"He's also proposing steps to expand the supply of housing," Yellen said.
"And I believe they would be very helpful: investing in refurbishment of properties, expanding the low-income housing tax credit that will be helpful to Americans deal(ing) with the shortage of affordable housing."
But these credits would need approval by Congress, which is struggling to approve this year's government funding amid Republican demands for spending cuts.
Passage in an election year is extremely unlikely, but a major revamp of the tax code is expected in 2025, when the Republican-passed individual tax cuts expire.
Biden's inclusion of the housing tax credit proposals in his address, along with a pledge to use other tools to encourage the development or renovation of over 2 million homes to close a housing supply gap, underscores the importance of housing affordability on the minds of voters.
"The lack of affordable housing supply is hurting the middle class and depriving first-generation and first-time homebuyers of the financial security that homeownership and the American Dream provide," National Association of Realtors President Kevin Sears said in a statement.
He added that the group was "grateful" that Biden was willing to explore new tax measures to help deal with a shortfall of 5.5 million affordable housing units in the U.S.
In his fiscal 2025 budget on Monday, Biden will also call for an expansion of the Low Income Housing Tax Credit and a $20 billion competitive grant fund to support development of affordable multifamily rental units, the White House said.
Moody's economist Nick Luettke said in a research note that tax incentives to encourage more renters to jump into home ownership would free up apartment units, easing price pressure on that market.
Reporting by Susan Heavey and David Lawder; editing by Paul Grant and Jonathan Oatis
https://www.reuters.com/markets/us/us-t ... 024-03-08/
"Yellen says Biden's proposed housing tax credits could boost supply"
By David Lawder and Susan Heavey
March 8, 2024
WASHINGTON, March 8 (Reuters) - President Joe Biden's proposed tax credits for certain home buyers and sellers could help boost the nation's housing supply and make homes more affordable, U.S. Treasury Secretary Janet Yellen said on Friday, a day after the president unveiled the proposal in his annual State of the Union speech.
Yellen said in an interview on MSNBC that Biden's top economic priority was helping Americans deal with higher prices and major living expenses, including the high cost of housing.
The White House said the proposed credit would provide middle-class first-time homebuyers with an annual tax credit of $5,000 a year for two years -- the equivalent of cutting interest rates by more than 1.5 percentage points on the median-priced home.
To encourage more homeowners to sell their "starter homes" to these buyers, Biden is proposing a one-year, $10,000 tax credit, which would apply to homes below their area's median home price.
Many of these buyers are locked into low mortgage rates, and the credit is aimed at offsetting higher mortgage costs for a "trade-up" or downsized home.
According to a White House fact sheet, the credits will aid some 3.5 million first-time homebuyers and 3 million sellers.
Based on credit rates, that would cost some $65 billion over two years.
Asked on MSNBC whether the credits could overheat the economy, Yellen said Biden wanted to make sure that middle-class families could afford to buy homes.
"He's also proposing steps to expand the supply of housing," Yellen said.
"And I believe they would be very helpful: investing in refurbishment of properties, expanding the low-income housing tax credit that will be helpful to Americans deal(ing) with the shortage of affordable housing."
But these credits would need approval by Congress, which is struggling to approve this year's government funding amid Republican demands for spending cuts.
Passage in an election year is extremely unlikely, but a major revamp of the tax code is expected in 2025, when the Republican-passed individual tax cuts expire.
Biden's inclusion of the housing tax credit proposals in his address, along with a pledge to use other tools to encourage the development or renovation of over 2 million homes to close a housing supply gap, underscores the importance of housing affordability on the minds of voters.
"The lack of affordable housing supply is hurting the middle class and depriving first-generation and first-time homebuyers of the financial security that homeownership and the American Dream provide," National Association of Realtors President Kevin Sears said in a statement.
He added that the group was "grateful" that Biden was willing to explore new tax measures to help deal with a shortfall of 5.5 million affordable housing units in the U.S.
In his fiscal 2025 budget on Monday, Biden will also call for an expansion of the Low Income Housing Tax Credit and a $20 billion competitive grant fund to support development of affordable multifamily rental units, the White House said.
Moody's economist Nick Luettke said in a research note that tax incentives to encourage more renters to jump into home ownership would free up apartment units, easing price pressure on that market.
Reporting by Susan Heavey and David Lawder; editing by Paul Grant and Jonathan Oatis
https://www.reuters.com/markets/us/us-t ... 024-03-08/
Re: THE ECONOMY
THE CAPE CHARLES MIRROR MARCH 9, 2024 AT 6:39 PM
Paul Plante says:
And while we are on the subject of BIDEN BOBAUNCE (boastful behavior, boasting; a boast) by Joe Biden going into the SILLY SEASON leading up to the November 2024 presidential elections, along with being barraged by PURE POLITICAL BULL**** you have to be an idiot or moron to believe, and OUTRIGHT OUTRAGEOUS LIES from TEAM BIDEN and Joe, himself, let’s drop back in time to February 2, 2024, and the “Statement from President Joe Biden on the January Jobs Report” where we have this excellent example of PURE BIDEN BOBAUNCE right in the first sentence, to wit:
America’s economy is the strongest in the world.
end quotes
Which statement is pure horse****.
We are a beggar nation on the world stage that can’t defend its own borders so deeply mired in ever-increasing debt that we need to depend on money coming in from China as they pick up our debt at interest in order to keep the doors of our worthless government open.
But let’s get back to Joe on February 2, 2024, because we have a GREAT BIG LIE based on a FRAUD ON THE PUBLIC coming from Joe in the very next sentence, to wit:
Today, we saw more proof, with another month of strong wage gains and employment gains of over 350,000 in January, continuing the strong growth from last year.
end quote
And that, people, simply is not true, which to say, it is a falsehood!
Think I’m kidding?
Not a joke, people, as we clearly see from a CNBC article titled “U.S. job growth totaled 275,000 in February but unemployment rate rose to 3.9%” by Jeff Cox on March 8, 2024, where we have Joe’s BIG WHOPPER exposed for all the world to see, to wit:
Job creation topped expectations in February, but the unemployment rate moved higher and employment growth from the previous two months wasn’t nearly as hot as initially reported.
February was a step higher in growth from January, which saw a steep downward revision to 229,000, from the initially reported 353,000.
Job growth in December also was revised down to 290,000 from 333,000, bringing the two-month total to 167,000 fewer jobs than initially reported.
end quotes
A STEEP DOWNWARD REVISION, people, means that on February 2, 2024, Joe was using a GROSSLY EXAGGERATED FIGURE in that self-serving press release, which is a FRAUD on the public by Joe Biden, who we will NOT HEAR apologizing to us in March for outright lying to us in February about the January jobs figure, which takes us back to Joe’s February 2, 2024 press release for more BIDEN BULL**** as follows:
Our economy has created 14.8 million jobs since I took office, unemployment has been under 4% for two full years now, and inflation has been at the pre-pandemic level of 2% over the last half year.
end quotes
And Joe’s statement that the economy has created 14.8 million jobs since Joe took office is obvious BULL**** based on INFLATED JOB NUMBERS as we can see from these revisions alone, which revisions always come after the fact, when nobody is looking.
And that statement by Joe that inflation has been at the pre-pandemic level of 2% over the last half year, is similarly misleading, and in fact, is a contrived number intended to be misleading, as we see in a Reuters article titled “Fed’s Powell still expects rate cuts, but inflation progress ‘not assured'” by Howard Schneider on March 6, 2024, to wit:
Reports bolstering the “soft-landing” narrative, such as encouraging figures on services prices on Tuesday or signs of slowing consumer spending, have been counterbalanced by others showing inflation stuck in significant ways, such as from still-rising shelter costs, or evidence of unexpected economic strength, such as January’s outsized gain of more than 350,000 jobs.
end quote
Going back to Joe running his mouth on February 2, 2024, telling us how great he is, and how we are lucky to have him in the white house instead of somebody truthful and competent, we have more as follows:
It’s great news for working families that wages, wealth, and jobs are higher now than before the pandemic, and I won’t stop fighting to lower costs and build an economy from the middle out and bottom up.
I’ll continue to stand in the way of efforts by Congressional Republicans to enact massive tax giveaways for the wealthy and big corporations; cut Medicare, Medicaid, and Social Security; and raise costs for American families.
end quotes
Joe Biden is going to stand in the way of efforts by Congressional Republicans to enact massive tax giveaways for the wealthy and big corporations?
BULL****, when it is Joe himself who is handing out tax giveaways right and left to big corporations like TSMC in Taiwan, as we see in a Reuters story titled “TSMC to win more than $5 billion in grants for a US chip plant, Bloomberg reports” on March 8, 2024, as follows:
March 8 (Reuters) – Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, is set to win more than $5 billion in federal grants from the U.S. government for setting up a chipmaking plant in Arizona, Bloomberg News reported on Friday.
TSMC and the U.S. Commerce Department did not immediately respond to Reuters requests for comment.
end quotes
And with that said, let’s cut to station identification and a commercial break for twelve full uninterrupted hours of high-class infomercials from TEAM BIDEN touting all that Joe Biden and BIDE-O-NOMICS have done for the American people to make their lives better than any other American president has ever made them, and then, we will be right back.
http://www.capecharlesmirror.com/paul-p ... ent-906084
Paul Plante says:
And while we are on the subject of BIDEN BOBAUNCE (boastful behavior, boasting; a boast) by Joe Biden going into the SILLY SEASON leading up to the November 2024 presidential elections, along with being barraged by PURE POLITICAL BULL**** you have to be an idiot or moron to believe, and OUTRIGHT OUTRAGEOUS LIES from TEAM BIDEN and Joe, himself, let’s drop back in time to February 2, 2024, and the “Statement from President Joe Biden on the January Jobs Report” where we have this excellent example of PURE BIDEN BOBAUNCE right in the first sentence, to wit:
America’s economy is the strongest in the world.
end quotes
Which statement is pure horse****.
We are a beggar nation on the world stage that can’t defend its own borders so deeply mired in ever-increasing debt that we need to depend on money coming in from China as they pick up our debt at interest in order to keep the doors of our worthless government open.
But let’s get back to Joe on February 2, 2024, because we have a GREAT BIG LIE based on a FRAUD ON THE PUBLIC coming from Joe in the very next sentence, to wit:
Today, we saw more proof, with another month of strong wage gains and employment gains of over 350,000 in January, continuing the strong growth from last year.
end quote
And that, people, simply is not true, which to say, it is a falsehood!
Think I’m kidding?
Not a joke, people, as we clearly see from a CNBC article titled “U.S. job growth totaled 275,000 in February but unemployment rate rose to 3.9%” by Jeff Cox on March 8, 2024, where we have Joe’s BIG WHOPPER exposed for all the world to see, to wit:
Job creation topped expectations in February, but the unemployment rate moved higher and employment growth from the previous two months wasn’t nearly as hot as initially reported.
February was a step higher in growth from January, which saw a steep downward revision to 229,000, from the initially reported 353,000.
Job growth in December also was revised down to 290,000 from 333,000, bringing the two-month total to 167,000 fewer jobs than initially reported.
end quotes
A STEEP DOWNWARD REVISION, people, means that on February 2, 2024, Joe was using a GROSSLY EXAGGERATED FIGURE in that self-serving press release, which is a FRAUD on the public by Joe Biden, who we will NOT HEAR apologizing to us in March for outright lying to us in February about the January jobs figure, which takes us back to Joe’s February 2, 2024 press release for more BIDEN BULL**** as follows:
Our economy has created 14.8 million jobs since I took office, unemployment has been under 4% for two full years now, and inflation has been at the pre-pandemic level of 2% over the last half year.
end quotes
And Joe’s statement that the economy has created 14.8 million jobs since Joe took office is obvious BULL**** based on INFLATED JOB NUMBERS as we can see from these revisions alone, which revisions always come after the fact, when nobody is looking.
And that statement by Joe that inflation has been at the pre-pandemic level of 2% over the last half year, is similarly misleading, and in fact, is a contrived number intended to be misleading, as we see in a Reuters article titled “Fed’s Powell still expects rate cuts, but inflation progress ‘not assured'” by Howard Schneider on March 6, 2024, to wit:
Reports bolstering the “soft-landing” narrative, such as encouraging figures on services prices on Tuesday or signs of slowing consumer spending, have been counterbalanced by others showing inflation stuck in significant ways, such as from still-rising shelter costs, or evidence of unexpected economic strength, such as January’s outsized gain of more than 350,000 jobs.
end quote
Going back to Joe running his mouth on February 2, 2024, telling us how great he is, and how we are lucky to have him in the white house instead of somebody truthful and competent, we have more as follows:
It’s great news for working families that wages, wealth, and jobs are higher now than before the pandemic, and I won’t stop fighting to lower costs and build an economy from the middle out and bottom up.
I’ll continue to stand in the way of efforts by Congressional Republicans to enact massive tax giveaways for the wealthy and big corporations; cut Medicare, Medicaid, and Social Security; and raise costs for American families.
end quotes
Joe Biden is going to stand in the way of efforts by Congressional Republicans to enact massive tax giveaways for the wealthy and big corporations?
BULL****, when it is Joe himself who is handing out tax giveaways right and left to big corporations like TSMC in Taiwan, as we see in a Reuters story titled “TSMC to win more than $5 billion in grants for a US chip plant, Bloomberg reports” on March 8, 2024, as follows:
March 8 (Reuters) – Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, is set to win more than $5 billion in federal grants from the U.S. government for setting up a chipmaking plant in Arizona, Bloomberg News reported on Friday.
TSMC and the U.S. Commerce Department did not immediately respond to Reuters requests for comment.
end quotes
And with that said, let’s cut to station identification and a commercial break for twelve full uninterrupted hours of high-class infomercials from TEAM BIDEN touting all that Joe Biden and BIDE-O-NOMICS have done for the American people to make their lives better than any other American president has ever made them, and then, we will be right back.
http://www.capecharlesmirror.com/paul-p ... ent-906084
Re: THE ECONOMY
Fox Business
"Government gets fatter while Americans rack up record-high credit-card debt"
Story by E.J. Antoni
11 MARCH 2024
While the White House lectures on the strength of the economy, Americans are drowning in credit-card debt, which hit a record high $1.13 trillion by the end of last year.
Of course Americans are sour on the economy: they’re having to put necessities on credit cards that charge $240 billion in interest annually.
How we got here is a lesson in failed government policy.
Excessive government spending over the last four years has created nothing short of a cost-of-living crisis, which has left families mired in debt.
When the government spent, borrowed and printed trillions of dollars, that devalued the dollar, causing inflation.
Every American’s paycheck and savings lost value and could buy less.
From January 2021 to June 2022, real (inflation-adjusted) average weekly earnings fell 5.1%.
By January 2024, three years after Biden took office, real earnings were still down 4.4%.
The real value of the typical American family’s weekly paycheck fell $85 over that time, despite growing $270.
With 60% of families living paycheck to paycheck, many people had to get second or even third jobs to make ends meet.
While that increases payrolls and makes the monthly jobs numbers look great, it’s actually a sign of impoverishment, not wealth.
Many families also fell into debt, relying on credit cards to pay for necessities like rent, groceries and utilities.
That has caused credit-card balances to soar to a record $1.1 trillion as almost half of Americans are unable to pay off their purchases at the end of each month.
And it’s not just a one-time surge of borrowing from Christmas shopping a couple months ago.
In fact, a quarter of card-holders still have debt from their 2022 holiday shopping.
It gets worse.
Many Americans racked up credit-card debt when they had interest rates at or near 0%.
With the expiration of those introductory offers and the rapid rise in interest rates over the last few years, financing costs on credit cards have shattered previous records.
The combination of record-high credit-card balances and interest rates means Americans are now paying $240 billion annually just in interest, before they pay a single dime on their outstanding balances.
That’s an additional cost on top of the existing stratospheric increases in their cost of living.
Sadly, many families are falling into debt traps where they cannot afford to pay their existing expenses, let alone additional finance charges.
They must take on more debt not only to pay today’s bills but also to pay the interest on yesterday’s borrowing.
That’s a downward spiral ending in disaster.
Since today’s higher interest rates are a response to the 40-year-high inflation, runaway government spending has delivered a one-two punch to family’s finances: It causes inflation that necessitates borrowing, and it makes that borrowing more expensive.
But the damage caused by the government has been internal as well as external.
The federal debt has exploded about $6.5 trillion since January 2021 to an eye-watering $34.2 trillion.
Interest on the debt now costs taxpayers over $1 trillion annually – over 40% of all personal income taxes.
That’s not fixing roads and bridges, funding schools, maintaining airports, or funding the military; it’s just servicing the debt.
Last year, I projected that interest would consume a record percentage of our economy by 2025 and the nonpartisan Congression Budget Office has just agreed with that forecast.
Politicians have racked up so much debt on the nation’s credit card that interest will soon be the federal government’s biggest expense.
But the politicians can lean on the Federal Reserve to create more money for them.
American families don’t have that luxury.
Instead, that money creation causes more inflation, putting families right back on the hamster wheel where they work harder, but fall further behind.
That’s a key to understanding why Americans view the economy so unfavorably in polls.
The last three years have taken them backwards financially, even as their salaries increased.
This will continue if Washington maintains its prodigality.
Every time the federal budget increases, the family budget decreases.
https://www.msn.com/en-us/money/persona ... 9dec&ei=47
"Government gets fatter while Americans rack up record-high credit-card debt"
Story by E.J. Antoni
11 MARCH 2024
While the White House lectures on the strength of the economy, Americans are drowning in credit-card debt, which hit a record high $1.13 trillion by the end of last year.
Of course Americans are sour on the economy: they’re having to put necessities on credit cards that charge $240 billion in interest annually.
How we got here is a lesson in failed government policy.
Excessive government spending over the last four years has created nothing short of a cost-of-living crisis, which has left families mired in debt.
When the government spent, borrowed and printed trillions of dollars, that devalued the dollar, causing inflation.
Every American’s paycheck and savings lost value and could buy less.
From January 2021 to June 2022, real (inflation-adjusted) average weekly earnings fell 5.1%.
By January 2024, three years after Biden took office, real earnings were still down 4.4%.
The real value of the typical American family’s weekly paycheck fell $85 over that time, despite growing $270.
With 60% of families living paycheck to paycheck, many people had to get second or even third jobs to make ends meet.
While that increases payrolls and makes the monthly jobs numbers look great, it’s actually a sign of impoverishment, not wealth.
Many families also fell into debt, relying on credit cards to pay for necessities like rent, groceries and utilities.
That has caused credit-card balances to soar to a record $1.1 trillion as almost half of Americans are unable to pay off their purchases at the end of each month.
And it’s not just a one-time surge of borrowing from Christmas shopping a couple months ago.
In fact, a quarter of card-holders still have debt from their 2022 holiday shopping.
It gets worse.
Many Americans racked up credit-card debt when they had interest rates at or near 0%.
With the expiration of those introductory offers and the rapid rise in interest rates over the last few years, financing costs on credit cards have shattered previous records.
The combination of record-high credit-card balances and interest rates means Americans are now paying $240 billion annually just in interest, before they pay a single dime on their outstanding balances.
That’s an additional cost on top of the existing stratospheric increases in their cost of living.
Sadly, many families are falling into debt traps where they cannot afford to pay their existing expenses, let alone additional finance charges.
They must take on more debt not only to pay today’s bills but also to pay the interest on yesterday’s borrowing.
That’s a downward spiral ending in disaster.
Since today’s higher interest rates are a response to the 40-year-high inflation, runaway government spending has delivered a one-two punch to family’s finances: It causes inflation that necessitates borrowing, and it makes that borrowing more expensive.
But the damage caused by the government has been internal as well as external.
The federal debt has exploded about $6.5 trillion since January 2021 to an eye-watering $34.2 trillion.
Interest on the debt now costs taxpayers over $1 trillion annually – over 40% of all personal income taxes.
That’s not fixing roads and bridges, funding schools, maintaining airports, or funding the military; it’s just servicing the debt.
Last year, I projected that interest would consume a record percentage of our economy by 2025 and the nonpartisan Congression Budget Office has just agreed with that forecast.
Politicians have racked up so much debt on the nation’s credit card that interest will soon be the federal government’s biggest expense.
But the politicians can lean on the Federal Reserve to create more money for them.
American families don’t have that luxury.
Instead, that money creation causes more inflation, putting families right back on the hamster wheel where they work harder, but fall further behind.
That’s a key to understanding why Americans view the economy so unfavorably in polls.
The last three years have taken them backwards financially, even as their salaries increased.
This will continue if Washington maintains its prodigality.
Every time the federal budget increases, the family budget decreases.
https://www.msn.com/en-us/money/persona ... 9dec&ei=47
Re: THE ECONOMY
REUTERS
"US State Department requests $4 billion to outcompete China"
By Simon Lewis and Humeyra Pamuk
March 11, 2024
WASHINGTON, March 11 (Reuters) - The United States must employ "all the tools at our disposal" to outcompete China, a top U.S. State Department official said on Monday, as the Biden administration unveiled its budget request for the 2025 fiscal year.
The request includes $4 billion over five years in mandatory funding for this purpose, including $2 billion to create a new international infrastructure fund to provide a credible, reliable alternative to Chinese infrastructure funding, Deputy Secretary of State for Management and Resources Rich Verma told a news briefing.
The other $2 billion was earmarked for "game-changing investments" to help Indo-Pacific countries push back against "predatory efforts," he said, adding that those would include efforts to improve governance and the rule of law.
The State Department requested a separate $4 billion in discretionary funding to cover foreign assistance and diplomatic engagement in the region.
U.S. efforts to fund infrastructure in developing countries have long been dwarfed by China's massive Belt and Road Initiative, a 10-year-old project to build infrastructure and energy networks connecting Asia with Africa and Europe through overland and maritime routes.
According to a report by U.S. researchers last November, Chinese financial institutions lent $1.34 trillion to developing countries from 2000 to 2021.
"We must employ all the tools at our disposal to outcompete China, wherever possible," Verma said, also referring to China by the initials of its official name, the People's Republic of China (PRC).
He said the request for fiscal 2025 would allow the U.S. "to continue to invest in the foundations of our strength at home, align with like-minded partners to strengthen our shared interests and address the challenges posed by the PRC, and harness those assets to compete with the PRC and defend our interests."
Verma said the infrastructure fund would support "transformative, quality and sustainable hard infrastructure projects."
At the 2023 G20 Summit in India, U.S. officials said President Joe Biden and Indian Prime Minister Narendra Modi co-hosted a group of G20 leaders to accelerate investments in high-quality infrastructure projects and development of economic corridors through a Partnership for Global Infrastructure and Investment (PGI).
This came after the Group of Seven rich Western countries leaders pledged in 2022 to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter the Belt and Road project.
Overseas finance has won Beijing friends across the developing world, while drawing criticism from the West and in some recipient countries, including Sri Lanka and Zambia, that infrastructure projects it funded saddled them with debt they were unable to repay.
Reporting by Humeyra Pamuk, Simon Lewis and David Brunnstrom; Editing by Chris Reese, Don Durfee and Jonathan Oatis
https://www.reuters.com/world/us/us-sta ... 024-03-11/
"US State Department requests $4 billion to outcompete China"
By Simon Lewis and Humeyra Pamuk
March 11, 2024
WASHINGTON, March 11 (Reuters) - The United States must employ "all the tools at our disposal" to outcompete China, a top U.S. State Department official said on Monday, as the Biden administration unveiled its budget request for the 2025 fiscal year.
The request includes $4 billion over five years in mandatory funding for this purpose, including $2 billion to create a new international infrastructure fund to provide a credible, reliable alternative to Chinese infrastructure funding, Deputy Secretary of State for Management and Resources Rich Verma told a news briefing.
The other $2 billion was earmarked for "game-changing investments" to help Indo-Pacific countries push back against "predatory efforts," he said, adding that those would include efforts to improve governance and the rule of law.
The State Department requested a separate $4 billion in discretionary funding to cover foreign assistance and diplomatic engagement in the region.
U.S. efforts to fund infrastructure in developing countries have long been dwarfed by China's massive Belt and Road Initiative, a 10-year-old project to build infrastructure and energy networks connecting Asia with Africa and Europe through overland and maritime routes.
According to a report by U.S. researchers last November, Chinese financial institutions lent $1.34 trillion to developing countries from 2000 to 2021.
"We must employ all the tools at our disposal to outcompete China, wherever possible," Verma said, also referring to China by the initials of its official name, the People's Republic of China (PRC).
He said the request for fiscal 2025 would allow the U.S. "to continue to invest in the foundations of our strength at home, align with like-minded partners to strengthen our shared interests and address the challenges posed by the PRC, and harness those assets to compete with the PRC and defend our interests."
Verma said the infrastructure fund would support "transformative, quality and sustainable hard infrastructure projects."
At the 2023 G20 Summit in India, U.S. officials said President Joe Biden and Indian Prime Minister Narendra Modi co-hosted a group of G20 leaders to accelerate investments in high-quality infrastructure projects and development of economic corridors through a Partnership for Global Infrastructure and Investment (PGI).
This came after the Group of Seven rich Western countries leaders pledged in 2022 to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter the Belt and Road project.
Overseas finance has won Beijing friends across the developing world, while drawing criticism from the West and in some recipient countries, including Sri Lanka and Zambia, that infrastructure projects it funded saddled them with debt they were unable to repay.
Reporting by Humeyra Pamuk, Simon Lewis and David Brunnstrom; Editing by Chris Reese, Don Durfee and Jonathan Oatis
https://www.reuters.com/world/us/us-sta ... 024-03-11/
Re: THE ECONOMY
REUTERS
"NY Fed: Consumer outlook on longer-term inflation hit snag in February"
By Michael S. Derby
March 11, 2024
NEW YORK, March 11 (Reuters) - The public’s expectations around the longer-run trajectory of inflation deteriorated in February, a report from the Federal Reserve Bank of New York said Monday.
While inflation a year from now was seen holding steady at 3%, respondents to the bank’s latest Survey of Consumer Expectations said that they see inflation three years from now moving to 2.7% from January’s 2.4%, with inflation in five years at 2.9%, from the prior month’s 2.5%.
The rise in the three-year expected rate of inflation was the first month-over-month gain since last September, while the month-over-month rise in the five year was the first since last August.
The deterioration in longer-run inflation expectations is likely to unsettle Federal Reserve officials, who are now in the preparation phase for their March 19-20 Federal Open Market Committee meeting.
While Fed officials are almost certain to hold rates steady at the gathering, many policy makers have said they expect to cut rates at some point later this year as inflation pressures have been moderating back toward the 2% target.
Fed officials believe that where the public expects inflation to go strongly influences where it stands today.
They’ve repeatedly flagged the relative stability of longer-term expectations as a reason they are confident inflation will return to the target.
Officials have also warned the road to lower inflation will likely be uneven and bumpy.
Some recent inflation data has proven stronger-than-expected, which may have influenced the recent round of expectations data.
Despite the shift in longer-run expectations some of the details of what the public projects for price pressures was more benign.
Survey respondents said they see price rises for medical care and college ebbing, while future food price gains were seen holding steady.
Respondents saw last month a decline in year-ahead rent price gains to 6.1% from January’s 6.4%, the lowest reading since December 2020.
Home price increases were seen flat at 3% and gasoline prices were seen rising only modestly compared to January at 4.3%.
The report also found that those who most strongly projected rises in longer run inflation expectations had at best high school degrees, while noting a declining overall disagreement about the future path of inflation.
Survey respondents in February held steady on their expectations for future income and earnings growth, while boosting their spending expectations.
Respondents were a little more downbeat on job market prospects and said last month that their views on credit access had also sagged.
Reporting by Michael S. Derby; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/ny-f ... 024-03-11/
"NY Fed: Consumer outlook on longer-term inflation hit snag in February"
By Michael S. Derby
March 11, 2024
NEW YORK, March 11 (Reuters) - The public’s expectations around the longer-run trajectory of inflation deteriorated in February, a report from the Federal Reserve Bank of New York said Monday.
While inflation a year from now was seen holding steady at 3%, respondents to the bank’s latest Survey of Consumer Expectations said that they see inflation three years from now moving to 2.7% from January’s 2.4%, with inflation in five years at 2.9%, from the prior month’s 2.5%.
The rise in the three-year expected rate of inflation was the first month-over-month gain since last September, while the month-over-month rise in the five year was the first since last August.
The deterioration in longer-run inflation expectations is likely to unsettle Federal Reserve officials, who are now in the preparation phase for their March 19-20 Federal Open Market Committee meeting.
While Fed officials are almost certain to hold rates steady at the gathering, many policy makers have said they expect to cut rates at some point later this year as inflation pressures have been moderating back toward the 2% target.
Fed officials believe that where the public expects inflation to go strongly influences where it stands today.
They’ve repeatedly flagged the relative stability of longer-term expectations as a reason they are confident inflation will return to the target.
Officials have also warned the road to lower inflation will likely be uneven and bumpy.
Some recent inflation data has proven stronger-than-expected, which may have influenced the recent round of expectations data.
Despite the shift in longer-run expectations some of the details of what the public projects for price pressures was more benign.
Survey respondents said they see price rises for medical care and college ebbing, while future food price gains were seen holding steady.
Respondents saw last month a decline in year-ahead rent price gains to 6.1% from January’s 6.4%, the lowest reading since December 2020.
Home price increases were seen flat at 3% and gasoline prices were seen rising only modestly compared to January at 4.3%.
The report also found that those who most strongly projected rises in longer run inflation expectations had at best high school degrees, while noting a declining overall disagreement about the future path of inflation.
Survey respondents in February held steady on their expectations for future income and earnings growth, while boosting their spending expectations.
Respondents were a little more downbeat on job market prospects and said last month that their views on credit access had also sagged.
Reporting by Michael S. Derby; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/ny-f ... 024-03-11/
Re: THE ECONOMY
CNBC
"Consumer prices rose 0.4% in February and 3.2% from a year ago"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED TUE, MAR 12 2024
KEY POINTS
* The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago. The monthly measure was in line with expectations while the 12-month reading was slightly higher.
* The core CPI rose 0.4% on the month and was up 3.8% on the year. Both were one-tenth of a percentage point higher than forecast.
* A 2.3% increase in energy costs helped boost the headline inflation number. Food costs were flat on the month, while shelter climbed another 0.4%.
Inflation rose again in February, keeping the Federal Reserve on course to wait at least until the summer before starting to lower interest rates.
The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago, the Labor Department’s Bureau of Labor Statistics reported Tuesday.
The monthly gain was in line with expectations, but the annual rate was slightly ahead of the 3.1% forecast from the Dow Jones consensus.
Excluding volatile food and energy prices, the core CPI rose 0.4% on the month and was up 3.8% on the year.
Both were one-tenth of a percentage point higher than forecast.
While the 12-month pace is off the inflation peak in mid-2022, it remains well above the Fed’s 2% goal as the central bank approaches its two-day policy meeting in a week.
A 2.3% increase in energy costs helped boost the headline inflation number.
Food costs were flat on the month, while shelter rose another 0.4%.
The BLS reported that the increases in energy and shelter amounted to more than 60% of the total gain.
Gasoline jumped 3.8% on the month while owners’ equivalent rent, a hypothetical gauge of what homeowners could get renting their properties, rose 0.4%.
“Inflation continues to churn above 3%, and once again shelter costs were the main villain."
"With home prices expected to rise this year and rents falling only slowly, the long-awaited fall in shelter prices isn’t coming to the rescue any time soon,” said Robert Frick, corporate economist at Navy Federal Credit Union.
“Reports like January’s and February’s aren’t going to prompt the Fed to lower rates quickly.”
Airline fares posted a 3.6% increase, apparel prices rose 0.6% and used vehicles were up 0.5%.
Medical care services, which helped feed a higher-than-expected CPI increase in January, decreased 0.1% last month.
The year-over-year increase for headline CPI was 0.1 percentage point higher than January, while core was one-tenth of a point lower.
Wall Street opened higher following the report, major stock averages as well as Treasury yields positive in early trading.
While the 12-month pace is off the inflation peak in mid-2022, it remains well above the Fed’s 2% goal as the central bank approaches its two-day policy meeting in a week.
Fed officials in recent weeks both have signaled that rate cuts are likely at some point this year and expressed caution about letting up too soon in the battle against high prices.
The statement after the January meeting indicated that policymakers need “greater confidence” that inflation is moving back to target.
Chair Jerome Powell, in congressional testimony last week, echoed those concerns, though he did mention that the Fed is probably “not far” from the point where it can start easing up on monetary policy.
Tuesday’s report “leaves Fed officials some way from attaining the ‘greater confidence’ needed to begin cutting interest rates,” said Paul Ashworth, chief North America economist at Capital Economics.
For financial markets, the shift in the Fed stance from its apparent policy pivot in late 2023 has meant a repricing on the pace of rate cuts.
Where futures traders entered the year expecting cuts to start coming in March, with six or seven total on the year, they have pushed out the first reduction to June, with two or three to follow, assuming cuts in quarter percentage point increments.
A bustling economy has helped the Fed focus on incoming data and allowed policymakers to avoid having to rush to lower rates.
Gross domestic product expanded at a 2.5% annualized pace in 2023 and is on pace to increase at a 2.5% pace in the first quarter of 2024, according to the Atlanta Fed’s GDPNow tracker.
One key ingredient in that growth has been a resilient consumer boosted by a strong labor market.
The economy added another 275,000 nonfarm jobs in February, though the increase skewed heavily to part-time positions and the unemployment rate rose to 3.9%.
Such strength can be a double-edged sword: While the growth in the face of aggressive rate hikes has bought the Fed time on policy, it also raises concerns that inflation could be more durable than expected.
Housing costs in particular have caused concern.
Shelter comprises about one-third of the CPI weighting and has been slow to decelerate, at least according to the BLS measure.
Fed officials see rental prices coming down through the year, and other measures outside the CPI computation of owners-equivalent rent have shown easing price pressures.
https://www.cnbc.com/2024/03/12/cpi-inf ... 2024-.html
"Consumer prices rose 0.4% in February and 3.2% from a year ago"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED TUE, MAR 12 2024
KEY POINTS
* The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago. The monthly measure was in line with expectations while the 12-month reading was slightly higher.
* The core CPI rose 0.4% on the month and was up 3.8% on the year. Both were one-tenth of a percentage point higher than forecast.
* A 2.3% increase in energy costs helped boost the headline inflation number. Food costs were flat on the month, while shelter climbed another 0.4%.
Inflation rose again in February, keeping the Federal Reserve on course to wait at least until the summer before starting to lower interest rates.
The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago, the Labor Department’s Bureau of Labor Statistics reported Tuesday.
The monthly gain was in line with expectations, but the annual rate was slightly ahead of the 3.1% forecast from the Dow Jones consensus.
Excluding volatile food and energy prices, the core CPI rose 0.4% on the month and was up 3.8% on the year.
Both were one-tenth of a percentage point higher than forecast.
While the 12-month pace is off the inflation peak in mid-2022, it remains well above the Fed’s 2% goal as the central bank approaches its two-day policy meeting in a week.
A 2.3% increase in energy costs helped boost the headline inflation number.
Food costs were flat on the month, while shelter rose another 0.4%.
The BLS reported that the increases in energy and shelter amounted to more than 60% of the total gain.
Gasoline jumped 3.8% on the month while owners’ equivalent rent, a hypothetical gauge of what homeowners could get renting their properties, rose 0.4%.
“Inflation continues to churn above 3%, and once again shelter costs were the main villain."
"With home prices expected to rise this year and rents falling only slowly, the long-awaited fall in shelter prices isn’t coming to the rescue any time soon,” said Robert Frick, corporate economist at Navy Federal Credit Union.
“Reports like January’s and February’s aren’t going to prompt the Fed to lower rates quickly.”
Airline fares posted a 3.6% increase, apparel prices rose 0.6% and used vehicles were up 0.5%.
Medical care services, which helped feed a higher-than-expected CPI increase in January, decreased 0.1% last month.
The year-over-year increase for headline CPI was 0.1 percentage point higher than January, while core was one-tenth of a point lower.
Wall Street opened higher following the report, major stock averages as well as Treasury yields positive in early trading.
While the 12-month pace is off the inflation peak in mid-2022, it remains well above the Fed’s 2% goal as the central bank approaches its two-day policy meeting in a week.
Fed officials in recent weeks both have signaled that rate cuts are likely at some point this year and expressed caution about letting up too soon in the battle against high prices.
The statement after the January meeting indicated that policymakers need “greater confidence” that inflation is moving back to target.
Chair Jerome Powell, in congressional testimony last week, echoed those concerns, though he did mention that the Fed is probably “not far” from the point where it can start easing up on monetary policy.
Tuesday’s report “leaves Fed officials some way from attaining the ‘greater confidence’ needed to begin cutting interest rates,” said Paul Ashworth, chief North America economist at Capital Economics.
For financial markets, the shift in the Fed stance from its apparent policy pivot in late 2023 has meant a repricing on the pace of rate cuts.
Where futures traders entered the year expecting cuts to start coming in March, with six or seven total on the year, they have pushed out the first reduction to June, with two or three to follow, assuming cuts in quarter percentage point increments.
A bustling economy has helped the Fed focus on incoming data and allowed policymakers to avoid having to rush to lower rates.
Gross domestic product expanded at a 2.5% annualized pace in 2023 and is on pace to increase at a 2.5% pace in the first quarter of 2024, according to the Atlanta Fed’s GDPNow tracker.
One key ingredient in that growth has been a resilient consumer boosted by a strong labor market.
The economy added another 275,000 nonfarm jobs in February, though the increase skewed heavily to part-time positions and the unemployment rate rose to 3.9%.
Such strength can be a double-edged sword: While the growth in the face of aggressive rate hikes has bought the Fed time on policy, it also raises concerns that inflation could be more durable than expected.
Housing costs in particular have caused concern.
Shelter comprises about one-third of the CPI weighting and has been slow to decelerate, at least according to the BLS measure.
Fed officials see rental prices coming down through the year, and other measures outside the CPI computation of owners-equivalent rent have shown easing price pressures.
https://www.cnbc.com/2024/03/12/cpi-inf ... 2024-.html
Re: THE ECONOMY
REUTERS
"Gasoline, shelter costs boost US prices; inflation still slowing"
By Lucia Mutikani
March 12, 2024
Summary
* Consumer prices increase 0.4% in February
* Gasoline, shelter account for over 60% of rise in CPI
* Core CPI gains 0.4%; up 3.8% on year-on-year basis
WASHINGTON, March 12 (Reuters) - U.S. consumer prices increased solidly in February amid higher costs for gasoline and shelter, suggesting some stickiness in inflation that further diminishes the chances of a Federal Reserve interest rate cut before June.
Despite the second straight month of firmer inflation readings reported by the Labor Department on Tuesday, the composition of the report remained consistent with a disinflationary trend.
Inflation-weary Americans got some relief from their supermarket and medical bills.
Though shelter costs helped to lift prices last month, housing inflation slowed after surging in January.
Some economists said difficulties adjusting the data for price increases at the start of the year had injected a bit of "noise" into the CPI report.
U.S. central bank officials, including Fed Chair Jerome Powell, have indicated they are in no rush to start lowering borrowing costs.
The stubbornly higher cost of living is one of the key issues in the Nov. 5 U.S. presidential election.
"We still believe the disinflation case is intact and that seasonal patterns at the start of the year have pushed inflation higher, but the Fed was looking for greater confidence that inflation was sustainably headed to 2%, and that confidence cannot be found in this report," said Conrad DeQuadros, senior economic advisor at Brean Capital.
The consumer price index rose 0.4% last month after climbing 0.3% in January, the Labor Department's Bureau of Labor Statistics (BLS) said.
Gasoline prices rebounded 3.8% after declining 3.3% in January.
Shelter, which includes rents, rose 0.4% after advancing 0.6% in the prior month.
These two categories contributed more than 60% to the monthly increase in the CPI.
Food prices were unchanged after rising 0.4% in January amid decreases in the costs of dairy products, fruits and vegetables as well as nonalcoholic beverages.
But prices for cereals and bakery products rose while meat, fish and eggs were slightly more expensive.
In the 12 months through February, the CPI increased 3.2%, after advancing 3.1% in January.
Economists polled by Reuters had forecast the CPI would gain 0.4% on the month and increase 3.1% on a year-on-year basis.
The annual increase in consumer prices has slowed from a peak of 9.1% in June 2022, but progress has stalled in recent months.
President Joe Biden used the report to drum up support for a $7.3 trillion budget unveiled on Monday.
"We have more to do to lower costs and give the middle class a fair shot," Biden said in a statement.
"The budget I put forward yesterday would take on Big Pharma to lower prescription drug costs."
Financial markets continue to expect the Fed will cut rates in June.
Since March 2022, the U.S central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
Stocks on Wall Street were trading higher on Tuesday.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
RESIDUAL SEASONALITY
Inflation picked up in January, and was largely blamed on the price hikes by service providers at the beginning of the year, which economists said were not fully addressed by the model used by the government to strip out seasonal fluctuations from the data.
There was also a jump in owners' equivalent rent (OER), a measure of the amount homeowners would pay to rent or would earn from renting their property, which diverged from rents.
That was partly the result of some methodology changes by the government.
The BLS last week held a webinar to discuss the underlying methodology related to the January OER and rent data.
Excluding the volatile food and energy components, the CPI increased 0.4% in February after rising by the same margin in January.
Shelter was also the main driver of the so-called core CPI.
Rents increased 0.5% after gaining 0.4% in January.
But OER climbed 0.4% after surging 0.6% in the prior month.
The latest data suggested that the divergence between the rents and OER measures, which had raised concerns about the outlook for shelter inflation, was a one-off event.
The cost of healthcare was unchanged after rising 0.5% in the prior month.
Hospital services prices decreased 0.6%, but the cost of dental services increased 0.4%.
Airline fares accelerated 3.6% while motor vehicle insurance cost 0.9% more.
Services excluding energy increased 0.5% after shooting up 0.7% in January.
The rise in the so-called super core services excluding shelter slowed to 0.5% from 0.8% in the prior month.
Goods prices rebounded by 0.4% after falling 0.3% in January.
They were boosted by increases in the prices of apparel.
Used cars and trucks prices jumped 0.5%.
Core goods prices rose 0.1%, the first increase since last May, after falling 0.3% in January.
Economists were split on whether the goods disinflation trend that helped to lower inflation last year had run its course.
"The Fed has said they need services inflation to moderate further in case goods deflation has ended."
"The February CPI report has this flavor," said Stephen Juneau, an economist at Bank of America Securities.
"We read developments on February inflation as continuing to support our outlook for a rate cut cycle that starts in June."
In the 12 months through February, the core CPI advanced 3.8%.
That was the smallest year-on-year increase since May 2021 and followed a 3.9% rise in January.
A separate report from the Atlanta Fed showed its sticky-price CPI, a weighted basket of items that change price relatively slowly, increased 4.0% on an annualized basis in February after rising 6.7% in January.
The U.S. central bank tracks the personal consumption expenditures price indexes for its 2% inflation target.
These measures are running at tamer rates than the CPI.
Though job growth accelerated in February, the unemployment rate increased to a two-year high of 3.9% and annual wage inflation moderated a bit.
Fewer workers are job-hopping, which over time could help to slow wage gains, the main driver of services inflation.
Based on the CPI data, economists estimated that the core PCE price index rose 0.2% in February after increasing 0.4% in January.
That would lower the increase in core inflation to 2.7% from 2.8% in January.
"Good news is likely coming," said Ryan Sweet, chief U.S. economist at Oxford Economics.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao
https://www.reuters.com/markets/us/gaso ... 024-03-12/
"Gasoline, shelter costs boost US prices; inflation still slowing"
By Lucia Mutikani
March 12, 2024
Summary
* Consumer prices increase 0.4% in February
* Gasoline, shelter account for over 60% of rise in CPI
* Core CPI gains 0.4%; up 3.8% on year-on-year basis
WASHINGTON, March 12 (Reuters) - U.S. consumer prices increased solidly in February amid higher costs for gasoline and shelter, suggesting some stickiness in inflation that further diminishes the chances of a Federal Reserve interest rate cut before June.
Despite the second straight month of firmer inflation readings reported by the Labor Department on Tuesday, the composition of the report remained consistent with a disinflationary trend.
Inflation-weary Americans got some relief from their supermarket and medical bills.
Though shelter costs helped to lift prices last month, housing inflation slowed after surging in January.
Some economists said difficulties adjusting the data for price increases at the start of the year had injected a bit of "noise" into the CPI report.
U.S. central bank officials, including Fed Chair Jerome Powell, have indicated they are in no rush to start lowering borrowing costs.
The stubbornly higher cost of living is one of the key issues in the Nov. 5 U.S. presidential election.
"We still believe the disinflation case is intact and that seasonal patterns at the start of the year have pushed inflation higher, but the Fed was looking for greater confidence that inflation was sustainably headed to 2%, and that confidence cannot be found in this report," said Conrad DeQuadros, senior economic advisor at Brean Capital.
The consumer price index rose 0.4% last month after climbing 0.3% in January, the Labor Department's Bureau of Labor Statistics (BLS) said.
Gasoline prices rebounded 3.8% after declining 3.3% in January.
Shelter, which includes rents, rose 0.4% after advancing 0.6% in the prior month.
These two categories contributed more than 60% to the monthly increase in the CPI.
Food prices were unchanged after rising 0.4% in January amid decreases in the costs of dairy products, fruits and vegetables as well as nonalcoholic beverages.
But prices for cereals and bakery products rose while meat, fish and eggs were slightly more expensive.
In the 12 months through February, the CPI increased 3.2%, after advancing 3.1% in January.
Economists polled by Reuters had forecast the CPI would gain 0.4% on the month and increase 3.1% on a year-on-year basis.
The annual increase in consumer prices has slowed from a peak of 9.1% in June 2022, but progress has stalled in recent months.
President Joe Biden used the report to drum up support for a $7.3 trillion budget unveiled on Monday.
"We have more to do to lower costs and give the middle class a fair shot," Biden said in a statement.
"The budget I put forward yesterday would take on Big Pharma to lower prescription drug costs."
Financial markets continue to expect the Fed will cut rates in June.
Since March 2022, the U.S central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
Stocks on Wall Street were trading higher on Tuesday.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
RESIDUAL SEASONALITY
Inflation picked up in January, and was largely blamed on the price hikes by service providers at the beginning of the year, which economists said were not fully addressed by the model used by the government to strip out seasonal fluctuations from the data.
There was also a jump in owners' equivalent rent (OER), a measure of the amount homeowners would pay to rent or would earn from renting their property, which diverged from rents.
That was partly the result of some methodology changes by the government.
The BLS last week held a webinar to discuss the underlying methodology related to the January OER and rent data.
Excluding the volatile food and energy components, the CPI increased 0.4% in February after rising by the same margin in January.
Shelter was also the main driver of the so-called core CPI.
Rents increased 0.5% after gaining 0.4% in January.
But OER climbed 0.4% after surging 0.6% in the prior month.
The latest data suggested that the divergence between the rents and OER measures, which had raised concerns about the outlook for shelter inflation, was a one-off event.
The cost of healthcare was unchanged after rising 0.5% in the prior month.
Hospital services prices decreased 0.6%, but the cost of dental services increased 0.4%.
Airline fares accelerated 3.6% while motor vehicle insurance cost 0.9% more.
Services excluding energy increased 0.5% after shooting up 0.7% in January.
The rise in the so-called super core services excluding shelter slowed to 0.5% from 0.8% in the prior month.
Goods prices rebounded by 0.4% after falling 0.3% in January.
They were boosted by increases in the prices of apparel.
Used cars and trucks prices jumped 0.5%.
Core goods prices rose 0.1%, the first increase since last May, after falling 0.3% in January.
Economists were split on whether the goods disinflation trend that helped to lower inflation last year had run its course.
"The Fed has said they need services inflation to moderate further in case goods deflation has ended."
"The February CPI report has this flavor," said Stephen Juneau, an economist at Bank of America Securities.
"We read developments on February inflation as continuing to support our outlook for a rate cut cycle that starts in June."
In the 12 months through February, the core CPI advanced 3.8%.
That was the smallest year-on-year increase since May 2021 and followed a 3.9% rise in January.
A separate report from the Atlanta Fed showed its sticky-price CPI, a weighted basket of items that change price relatively slowly, increased 4.0% on an annualized basis in February after rising 6.7% in January.
The U.S. central bank tracks the personal consumption expenditures price indexes for its 2% inflation target.
These measures are running at tamer rates than the CPI.
Though job growth accelerated in February, the unemployment rate increased to a two-year high of 3.9% and annual wage inflation moderated a bit.
Fewer workers are job-hopping, which over time could help to slow wage gains, the main driver of services inflation.
Based on the CPI data, economists estimated that the core PCE price index rose 0.2% in February after increasing 0.4% in January.
That would lower the increase in core inflation to 2.7% from 2.8% in January.
"Good news is likely coming," said Ryan Sweet, chief U.S. economist at Oxford Economics.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao
https://www.reuters.com/markets/us/gaso ... 024-03-12/