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☆ U.S. job growth totaled 175,000 in April, much less than expected, while unemployment rose to 3.9%
▼ + stars: | 2024-05-03 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

Signage at a job fair at Brunswick Community College in Bolivia, North Carolina, US, on Thursday, April 11, 2024. The U.S. economy added fewer jobs than expected in April while the unemployment rate rose, reversing a trend of robust job growth that had kept the Federal Reserve cautious as it looks for signals on when it can start cutting interest rates. The unemployment rate ticked higher to 3.9% against expectations it would hold steady at 3.8%. Average hourly earnings rose 0.2% from the previous month and 3.9% from a year ago, both below consensus estimates and an encouraging sign for inflation. The jobless rate tied for the highest level since January 2022.

Persons: Dow Jones Organizations: Brunswick Community College, Reserve, Dow Locations: Bolivia , North Carolina, U.S

☆ Wall Street is confused and divided over how many times the Fed will cut rates this year
▼ + stars: | 2024-05-02 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Wall Street reacted Thursday to this week's Fed meeting, with forecasts scattered across a range of outcomes for where monetary policy heads next. Most economists for the biggest forecasting firms expect the central bank to lower benchmark interest rates sometime later this year. Goldman left in place its call for two rate cuts this year of a quarter percentage point each, with one in July and the other in November. "If inflation comes in stronger than in our baseline, we would expect the first rate cut to be postponed to December," he wrote. For 2025, we continue to expect four rate cuts."

Persons: Goldman Sachs, David Mericle, Powell, Goldman, Andrew Hollenhorst, Morgan Stanley, Ellen Zentner, Marc Giannoni, Michael Gapen, Michael Bloom Organizations: Fed, Futures, Group, Citigroup, Barclays, Bank of America

☆ Here's what to expect from the April jobs report on Friday
▼ + stars: | 2024-05-02 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Allison Joyce | Bloomberg | Getty ImagesHiring likely continued at a brisk pace in April as investors look for any cracks in the labor market that could sway the Federal Reserve. If that top-line number is accurate, it actually would reflect a small step back from the average 276,000 jobs a month created so far in 2024. April's jobs market featured more strength in health care and leisure and hospitality, Glaser added. Beating expectationsIndeed, the labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down. "The Goldilocks scenario is an unemployment rate rise with a participation rate rise," Matus said.

Persons: Allison Joyce, Nonfarm payrolls, Dow Jones, Amy Glaser, resiliency, Glaser, we've, Drew Matus, Matus, Jerome Powell Organizations: Brunswick Community College, Bloomberg, Getty, Federal Reserve, MetLife Investment Management, of Labor Locations: Bolivia , North Carolina

☆ Fed keeps rates steady as it notes 'lack of further progress' on inflation
▼ + stars: | 2024-05-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

With its decision to hold the line on rates, the committee in its post-meeting statement noted a "lack of further progress" in getting inflation back down to its 2% target. The process has resulted in the central bank balance sheet to come down to about $7.4 trillion, or $1.5 trillion less than its peak around mid-2022. Under the new plan, the Fed will reduce the monthly cap on Treasurys to $25 billion from $60 billion. The reduction of the balance sheet roll-off, then, can be seen as a slight easing measure. The Fed uses interest rates to control the flow of money, with the intent that higher rates will dampen demand and thus help reduce prices.

Persons: Jerome Powell, Powell Organizations: WASHINGTON, Federal Reserve, Fed, Market, Dow Jones Industrial, Treasury Locations: U.S

☆ Private payrolls increased by 192,000 in April, more than expected for resilient labor market
▼ + stars: | 2024-05-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Private payrolls increased at a faster than expected pace in April, indicating there are still plenty of tailwinds for the U.S. labor market, according to ADP. Companies with 500 or more workers showed the biggest gain in hiring with 98,000. In recent months, ADP has consistently undershot the Labor Department's count, though the numbers were fairly close in March. The department's Bureau of Labor Statistics reported that private payrolls increased by 232,000 for the month versus ADP's 208,000. Friday's report is expected to show growth of 204,000 in total nonfarm payrolls for April, down from March's 303,000, according to the consensus Dow Jones estimate.

Persons: payrolls, Dow Jones, Nela Richardson Organizations: ADP, Labor, department's Bureau of Labor Statistics Locations: March's

☆ Worker pay rose more than expected in Q1 in another sign of persistent inflation
▼ + stars: | 2024-04-30 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Employee compensation costs jumped more than expected to start the year, providing another danger sign about persistent inflation, while consumer confidence hit its lowest level in nearly two years. The employment cost index, which measures worker salaries and benefits, gained 1.2% in the first quarter, the Labor Department reported Tuesday. The Fed watches the ECI as a significant measure of underlying inflation pressures. State and local government workers saw their compensation costs rise 4.8%, down just narrowly from the same period in 2023. The Consumer Confidence Index slipped to 97, a decline of 6.1 points that was below the Wall Street estimate for 103.5.

Persons: Dow Jones, Dana Peterson, Peterson Organizations: Labor Department, Dow, Fed, Committee, Conference Locations: State

☆ Here's everything to expect when the Fed wraps up its meeting Wednesday
▼ + stars: | 2024-04-30 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Recent commentary from policymakers and on Wall Street indicates there's not much else the committee can do at this point. But they're still hopeful that they will be in a position to cut rates later." Markets actually have held up pretty well since Powell made those comments on April 16, though stocks sold off Tuesday ahead of the meeting. Some on Wall Street, though, are still hopeful that inflation data will show progress and allow the central bank to cut. The Wall Street bank's economists are preparing for the possibility that the Fed could be on hold for longer, particularly if inflation continues to surprise to the upside.

Persons: Jerome Powell, Kent Nishimura, Guy LeBas, Janney Montgomery Scott, they're, Powell, We've, there's, specter, LeBas, There's, Goldman Sachs, David Mericle, —, Donald Trump, Goldman, Mericle Organizations: Banking, Housing, Urban Affairs Committee, Getty, Federal Reserve, Federal, Market Committee, Fed, Dow Jones, Department, Labor Department, Republican

☆ Key Fed inflation measure rose 2.8% in March from a year ago, more than expected
▼ + stars: | 2024-04-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated. The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. The Fed targets 2% inflation, a level that core PCE has been above for the past three years. Services prices increased 0.4% on the month while goods were up 0.1%, reflecting a swing back in consumer prices as goods inflation dominated since the early days of the Covid pandemic.

Persons: Dow Jones, George Mateyo Organizations: Reserve, Commerce Department, Dow, Treasury, Key Wealth, Fed, Labor Department

☆ Trump advisors are considering plans to dramatically revamp the Fed, WSJ report says
▼ + stars: | 2024-04-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

Former US President Donald Trump speaks to members of the media at Manhattan criminal court in New York, US, on Thursday, April 25, 2024. The plans, which the Journal report described as highly secretive, are part of a 10-page document that suggests Trump — if elected — would be consulted on interest rate decisions. Along with those proposals, the draft contends that Trump could remove current Fed Chair Jerome Powell from office and require that Fed policy be aligned with the administration's goals. While in office, Trump harshly criticized Powell and his fellow central bankers as they were raising interest rates and reportedly considered ousting him. Trump campaign officials told the Journal that the draft proposals shouldn't be considered "official."

Persons: Donald Trump, Donald Trump's, Trump, Jerome Powell, Powell Organizations: Federal, Wall, Treasury Department Locations: Manhattan, New York

☆ All the data so far is showing inflation isn't going away, and is making things tough on the Fed
▼ + stars: | 2024-04-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Finally, consumers are dipping into savings to fund those purchases, creating a precarious scenario, if not now then down the road. With unemployment under 4%, it shouldn't be that surprising that prices aren't" going down, said Joseph LaVorgna, chief economist at SMBC Nikko Securities. So you might have a sticky inflation scenario." "If inflation remains higher, the Fed will be faced with the difficult choice of pushing the economy into a recession, abandoning its soft-landing scenario, or tolerating inflation higher than 2%," Sanders said. "To us, accepting higher inflation is the more prudent option."

Persons: Justin Sullivan, Joseph LaVorgna, LaVorgna, Donald Trump, Biden, Mike Sanders, Sanders Organizations: Getty, Federal Reserve, Commerce Department, Nikko Securities, National Economic Council, Madison Investments Locations: San Rafael , California, U.S

☆ GDP growth slowed to a 1.6% rate in the first quarter, well below expectations
▼ + stars: | 2024-04-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate. Net exports subtracted 0.86 percentage point from the growth rate while consumer spending contributed 1.68 percentage points. Excluding food and energy, core PCE prices rose at a 3.7% rate, both well above the Fed's 2% target. Income adjusted for taxes and inflation rose 1.1% for the period, down from 2%. Services spending increased 4%, its highest quarterly level since Q3 of 2021.

Persons: Dow Jones, Jeffrey Roach Organizations: Gross, department's, Analysis, Commerce Department, Federal, Dow Jones, Treasury, Federal Reserve, LPL, Labor Department

☆ Slowing growth plus stubborn inflation add up to a headache for Fed officials
▼ + stars: | 2024-04-25 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The slowing growth and stubborn inflation picture emerging in the U.S. economy may not be quite a nightmare scenario for the Federal Reserve, but it at least could make for some restless sleep. Markets had been looking for the string of good readings dating back to mid-2022 to continue, with economists estimating real GDP growth of 2.4% and inflation readings around 3%. What it got was essentially what some on Wall Street called the worst of both worlds, with weakening growth and stubborn price pressures. The Fed will get a more granular look at PCE data on Friday when the Commerce Department releases the monthly figures for March. "We still think Fed cuts are coming this summer, before inflation has sustainably slowed."

Persons: Matthew Ryan, —, Ryan, Steven Blitz, Veronica Clark Organizations: Federal Reserve, Commerce, Treasury, Commerce Department, TS Lombard, Citigroup, Citi Locations: U.S

☆ Here's why Thursday's post-GDP sell-off may be overdone
▼ + stars: | 2024-04-25 | by ( Sarah Min | ) www.cnbc.com time to read: +4 min

Stocks sold off Thursday aHoweverfter the latest economic data came in weaker than expected, but some observers say that the reaction was overdone. While the headline GDP number missed expectations, it nevertheless showed economic growth the Fed could take in stride, they say. He noted that the core parts of GDP, such as consumption growth and residential growth, were "quite good." "Stagflation is a combination of stagnant growth and high inflation," Nick continued. "I think the earnings backdrop has been very supportive," Lee told CNBC's " Closing Bell " on Thursday.

Persons: Stocks, Dow Jones, Chris Zaccarelli, Brian Nick, Nick, we're, Rob Ginsberg, Ginsberg, Fundstrat's Tom Lee, Lee, CNBC's, Jeff Cox Organizations: Federal Reserve, Independent, Alliance, Dow Jones, Treasury, Macro, Wolfe Research Locations: U.S

☆ GDP report Thursday expected to show economy still growing at a solid pace
▼ + stars: | 2024-04-24 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Gross domestic product, the sum of all goods and services produced across the sprawling U.S. economy, is expected to post a 2.4% annualized growth rate for the first quarter, according to the Dow Jones consensus forecast. If that estimate is accurate, it would mark a step down from the 3.4% growth rate in the fourth quarter of 2023 and just a touch less than last year's 2.5% full-year growth rate. "The U.S. economy is still very resilient, supported by a solid labor market that continues to support robust income growth and in turn, consumer spending activity," EY-Parthenon chief economist Gregory Daco said. "We are seeing a little bit of cooling in terms of the consumer spending momentum. But there isn't any form of retrenchment that would be alarming in terms of future income trends and in terms of future consumer spending trends."

Persons: Dow, Gregory Daco, Daco, Goldman Sachs, Goldman, Spencer Hill Organizations: Wall, Gross, Atlanta Federal, Commerce, Commerce Department Locations: U.S, Atlanta

☆ Why the Fed keeping rates higher for longer may not be such a bad thing
▼ + stars: | 2024-04-24 | by ( Jeff Cox | ) www.cnbc.com time to read: +7 min

So the question is, are we going to have issues if rates remain higher for longer?" But financial markets, despite a recent 5.5% selloff for the S&P 500, have largely held up amid the higher-rate landscape. Higher rates can be a good signHistory tells differing stories about the consequences of a hawkish Fed, both for markets and the economy. Higher rates are generally a good thing so long as they're associated with growth. Futures market pricing implies a fed funds rate of 4.32% by December 2025, indicating a higher rate trajectory.

Persons: Jerome Powell, Mandel Ngan, Quincy Krosby, Krosby, Paul Volcker, David Kelly, Kelly, —, Goldman Sachs, Loretta Mester Organizations: Federal Reserve, Financial, Afp, Getty, LPL, Fed, Asset Management, Market, Cleveland Fed, European Union Locations: Washington , DC

☆ Would the Fed really hike rates here? This is what would have to happen
▼ + stars: | 2024-04-20 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Though it was unthinkable just a short time ago, the question of what it would take the Federal Reserve to raise interest rates further is gaining increasing attention. New York Fed President John Williams faced questioning Thursday about hiking and said he doesn't expect that to happen, but noted that it's always an option. "Basically, if the data were telling us that we would need higher interest rates to achieve our goal, then we would obviously want to do that." Making the same mistake as the 1970s central bank — hiking rates to fight inflation, then cutting prematurely and allowing inflation to return — is a sensitive issue for the Powell Fed. Chances are low, for now So far, only Fed Governor Michelle Bowman has given any credence to the notion of raising rates.

Persons: John Williams, it's, Williams, Jerome Powell, Philip Jefferson, Powell, Nicholas Colas, Colas, Michelle Bowman, Bowman, Esther George Organizations: Federal Reserve, Fed, New York Fed, Summit, DataTrek, CME, Kansas City, CNBC Locations: Washington, Kansas

☆ Something strange has been happening with jobless claims numbers lately
▼ + stars: | 2024-04-19 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

That's because most of the past several weeks have shown that first-time claims for unemployment benefits haven't fluctuated at all — as in zero. "Initial claims for unemployment insurance are state programs, with 50 state rules, hundreds of offices, and 50 websites to file. Weather, seasonality, holidays, and economic vibrations drive the number of people filing claims from week to week," he added. Indeed, a Labor Department spokesperson noted that while the string of 212,000 prints on the jobless claims data is "uncommon," it would not be considered anomalous. The Labor Department official also pointed out that new seasonal factors to the claims data were announced a month ago.

Persons: Jim Bianco, Tracey Ryniec, Jim Organizations: Labor Department, Bianco Research, Zacks Investment Research, Labor, Federal Reserve Locations: New York City

☆ Wall Street pushes out rate-cut expectations, sees risk they don't start until March 2025
▼ + stars: | 2024-04-17 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

If there was any doubt before, Federal Reserve Chair Jerome Powell has pretty much cemented the likelihood that there won't be interest rate reductions anytime soon. Now, Wall Street is wondering if the central bank will cut at all this year. "My sense is they need two, probably three consecutive months of inflation numbers that are consistent with that 2% target. Market pricing for rate cuts has been highly volatile in recent weeks as Wall Street has chased fluctuating Fed rhetoric. As for a second rate cut, there was a tilt toward one in December, but that remains an open question.

Persons: Jerome Powell, Powell, there's, They've, Mark Zandi, Zandi Organizations: Financial, Moody's, Fed Locations: Washington , U.S

☆ Fed Chair Powell says there has been a 'lack of further progress' this year on inflation
▼ + stars: | 2024-04-16 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Federal Reserve Chair Jerome Powell speaks during a press conference following a closed two-day meeting of the Federal Open Market Committee on interest rate policy at the Federal Reserve in Washington, D.C., on Dec. 13, 2023. Since July 2023, the Fed has kept its benchmark interest rate in a target range between 5.25%-5.5%, the highest in 23 years. Powell added that until inflation shows more progress, "We can maintain the current level of restriction for as long as needed." The comments follow inflation data through the first three months of 2024 that has been higher than expected. The benchmark 2-year note , which is especially sensitive to Fed rate moves, briefly topped 5%, while the benchmark 10-year yield rose 3 basis points.

Persons: Jerome Powell, Powell, hasn't Organizations: Federal, Committee, Federal Reserve, Washington , D.C, Fed, Treasury Locations: Washington ,, U.S, Canada

☆ Watch Fed Chair Powell speak live during a policy forum in Washington
▼ + stars: | 2024-04-16 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

[The stream is slated to start at 1:15 p.m. Please refresh the page if you do not see a player above at that time.] Federal Reserve Chair Jerome Powell speaks Wednesday to the Wilson Center's Washington Forum on the Canadian Economy, in what will likely be his last policy speech before the next central bank meeting. The appearance comes with markets expecting the Fed to keep its benchmark borrowing rate steady until at least September. Recent higher than expected inflation readings have forced investors to recalibrate expectations that the Fed would lower interest rates steadily this year.

Persons: Jerome Powell, Wilson, Powell, Read Organizations: Bank of Canada, Tiff, Wilson, Fed, CNBC, YouTube Locations: Canadian, Canada

☆ Retail sales jumped 0.7% in March, much higher than expected
▼ + stars: | 2024-04-15 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Excluding auto-related receipts, retail sales jumped 1.1%, also well ahead of the estimate for a 0.5% increase. An increase in gas prices helped push the headline retail sales number higher, with sales up 2.1% on the month at service stations. Resilient consumer spending has helped keep the economy afloat despite higher interest rates and concerns over stubborn inflation. Consumer spending accounts for nearly 70% of U.S. economic output so it is critical to continued growth in gross domestic product. Stronger consumer spending could cause the Fed to hold off longer on cuts, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

Persons: Dow, Andrew Hunter, Hunter Organizations: Commerce Department, Labor Department, Sporting, Federal Reserve, Capital Economics Locations: Iran, Israel

☆ Surging inflation fears sent markets tumbling and Fed officials scrambling
▼ + stars: | 2024-04-13 | by ( Jeff Cox | ) www.cnbc.com time to read: +8 min

Energy prices, which have been a major factor in the past two months' inflation readings, pushed higher on signs of further geopolitical turmoil. Minutes released Wednesday from the March Fed meeting showed officials were concerned about higher inflation and looking for more convincing evidence it is on a steady path lower. Sticky price CPI entails items such as housing, motor vehicle insurance and medical care services, while flexible price is concentrated in food, energy and vehicle prices. "If that's the case, you would require a decent amount of unemployment to get inflation all the way to 2.0%." That's why Furman and others have pushed for the Fed to rethink it's determined commitment to 2% inflation.

Persons: Spencer Platt, —, Stocks, Jason Furman, We've, Israel, Jim Paulsen, Wells, Substack, Paulsen, Furman, Barack Obama, Jamie Dimon, John Williams, Susan Collins, it's, Larry Fink Organizations: Getty, Investors, Dow Jones, CNBC, of Economic Advisers, New York Fed, National Federation of Independent Business, Labor Department, JPMorgan, University of Michigan's, Boston, Commerce, CPI, Citigroup, Fed, Atlanta Fed, Dallas Fed, Harvard, BlackRock Locations: Manhattan, New York City, Iran, Israel

☆ Jamie Dimon warns that inflation, wars and Fed policy pose major threats ahead
▼ + stars: | 2024-04-12 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

JPMorgan Chase CEO and Chairman Jamie Dimon gestures as he speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, U.S., December 6, 2023. JPMorgan Chase CEO Jamie Dimon warned Friday that multiple challenges, primarily inflation and war, threaten an otherwise positive economic backdrop. "Many economic indicators continue to be favorable," the head of the the largest U.S. bank by assets said in announcing first-quarter earnings results. An "unsettling" global landscape including "terrible wars and violence" is one such factor introducing uncertainty both into JPMorgan's business and the broader economy, Dimon said. However, the bank warned net interest income for this year could be slightly below what Wall Street is expecting and shares were off nearly 2% in premarket trading.

Persons: Jamie, JPMorgan Chase, Jamie Dimon, Dimon Organizations: JPMorgan Chase, U.S . Senate Banking, Housing, Urban Affairs, Wall, Capitol, JPMorgan Locations: Washington , U.S, U.S

☆ BlackRock's Larry Fink sees Fed cutting rates twice this year but missing 2% inflation goal
▼ + stars: | 2024-04-12 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

(Photo by Sean Gallup/Getty Images)BlackRock CEO Larry Fink predicted Friday that the Federal Reserve likely will still cut interest rates this year but won't meet its inflation target. A report earlier this week showed inflation running at a 3.5% annual rate. Still, Fink expects the Fed to do some reductions this year while it may have to concede that inflation will remain elevated. "Inflation has moderated and we've always said inflation is going to moderate. Fink spoke the same day BlackRock reported quarterly earnings that topped Wall Street expectations both for profit and revenue.

Persons: Larry Fink, Sean Gallup, it's, Fink, we're, " Fink, we've Organizations: UNITED, Expo City, United Arab Emirates, Getty, Federal Reserve, Fed, Federal, BlackRock Locations: DUBAI, EMIRATES, Expo City Dubai, Dubai, United Arab

☆ Wholesale prices rose 0.2% in March, less than expected
▼ + stars: | 2024-04-11 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

A measure of wholesale prices increased less than expected in March, providing some potential relief from worries that inflation will hold higher for longer than many economists had expected. Excluding food and energy, the core PPI also rose 0.2%, meeting expectations. The release comes a day after the BLS reported that consumer prices again rose more than expected in March, raising concerns that the Federal Reserve will be unable to lower interest rates anytime soon. However, wholesale prices for final demand food and goods less food and energy climbed 0.8% and 0.1%, respectively. That contrasted with the consumer price index, which showed gasoline up 1.7% on the month.

Persons: Dow Jones Organizations: Dow, Labor Department's Bureau of Labor Statistics, PPI, BLS, Federal Reserve, Labor Department, Group

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