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The US government is shelling out $2 million per minute in interest payments on its debt. The surge in interest rate expenses has coincided with higher for longer interest rates. The US government is on track to pay more than $1 trillion in interest expenses this year. And that in turn means higher interest rates have actually helped fueled inflation rather than tame it. And you're not going to see meaningful downward pressure on shelter costs, until the Fed lowers interest rates," Manley said.
Persons: , Louis Fed, Jack Manley, Manley Organizations: Service, US Treasury, Bloomberg, Federal Reserve, Fed, Treasury
Read previewLooking at the headline numbers, the US labor market is booming. OVOM Research/Bullandbearprofits.comWolfenbarger's views in contextOther market observers have started to warn of a weakening labor market in recent months. Ian Shepherdson, the chief economist at Pantheon Macroeconomics, shared several indicators in a client note earlier this month warning of a job market slowdown ahead. Pantheon MacroeconomicsBut whether the labor market actually weakens materially remains to be seen. AdvertisementIf Wolfenbarger is right and the labor market falls apart in short order, it could catch an exceptionally bullish market off guard.
Persons: , Jon Wolfenbarger, Merrill Lynch, Wolfenbarger, Louis, Ian Shepherdson, Shepherdson, There's Organizations: Service, JPMorgan, Business, Labor Statistics, Fed, Conference, Treasury, OVOM, Pantheon, National Federation of Independent
The median US home price could surpass $500,000 for the first time, one expert says. Housing guru Bill Pulte said prices could jump 20% if the Fed cuts rates before crushing inflation. AdvertisementThe average price of a home could soar to over $500,000 if the Federal Reserve cuts interest rates without crushing inflation first, a housing expert says. "I predict if rates go down, housing prices will go through the roof," Bill Pulte recently told Fox Business. This story is available exclusively to Business Insider subscribers.
Persons: Bill Pulte, , Louis Organizations: Service, Federal Reserve, Fox Business, Louis Fed, Business Locations: St
Read previewFitch Ratings has cut its outlook for China, adding to the gloom surrounding the world's second-largest economy. It cut its outlook from "stable" to "negative," but maintained its overall rating at "A+." The move comes after Moody's Investor Services, another major credit-rating agency, also downgraded its outlook for China to "negative" in December. As a result Fitch expects economic growth to fall to 4.5% for 2024. The ratings agency said policymakers will probably have no choice but to borrow to address its economic woes.
Persons: , Fitch, Fitch's Organizations: Service, Business, Moody's Investor Services, Analysts, St Louis Federal Reserve, CSI Locations: China, Beijing
Loneliness and happiness are often related, and people of all ages have been battling those issues for years. The World Happiness Report, released in March, delved further into how people of all generations are experiencing loneliness and happiness globally. And when it comes to loneliness in the US, the younger generations were hit the hardest. This is despite the fact that actual social connections are much more frequent for Millennials than Boomers, and about as frequent as for Generation X." AdvertisementThe focus on meaningful connections might just be what splits older generations from younger generations when it comes to happiness.
Persons: , Millennials, Preeti Malani, Malani, Zers, it's, Susan Skinner, Louis, That's, Xers, Maria Maki, Maki Organizations: Service, Business, Boomers, University of Michigan, Louis Federal, Equity Locations: North America
Throughout the U.S., workers earn a median annual wage of about $48,080, according to the latest available data from the Bureau of Labor Statistics. But in the three states where workers earn the least, the median annual wage sits below $40,000 a year. Check out the map below to see the median wage in every U.S. state. Mississippi has the lowest-earning population in the U.S. with a median annual wage of just $37,500, according to the BLS. These are the 10 states with the lowest median annual wages.
Persons: Louis, Louis Fed Organizations: Bureau of Labor Statistics, BLS, Louis Fed, Mississippi, CNBC Locations: . Mississippi, U.S, Mississippi, Massachusetts
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFormer St. Louis Fed Pres. Bullard: March jobs report shows 'the economy is running pretty hot'James Bullard, Purdue University's Business School Dean and former St. Louis Fed President, joins 'Squawk Box' to discuss the March jobs report, the impact on the Fed's interest rate path, state of the economy, and more.
Persons: Louis Fed Pres, Bullard, James Bullard, Purdue University's Business School Dean, Louis Organizations: Former, Purdue University's Business School, Louis Fed
In particular, the researchers looked at a group dubbed "disconnected youth," who aren't working and are also not in school. As of 2022, disconnected youth comprised 13% of this age group; that share has been rising overall since 1998, according to calculations from the Federal Reserve Bank of Dallas. AdvertisementYounger Americans are facing stagnant incomesThe Dallas Fed found that, even after a post-pandemic dip, the rate of disconnected youth has increased since the end of the 1990s. AdvertisementAnd the number of young adults with no income has been on the rise; in 1990, around one in five young adults said they had no wage or salary income. Are you or were you a "disconnected youth," or supporting one?
Persons: , Louis, Gen, Zers, Louis Fed's, Louis Fed, William M, Rodgers III, Rodgers Organizations: Service, Louis Federal Reserve's Institute for Economic Equity, Business, Federal Reserve Bank of Dallas, Dallas Fed, Federal Reserve's Survey, Consumer, Louis Fed, National Health, Blacks, Louis, Louis Fed's Institute for Economic Equity
It makes sense then that just 36.5% of adults say they feel they're better off financially than their parents, according to CNBC's International Your Money Financial Security Survey conducted by SurveyMonkey. A greater share — 42.8% — say they're worse off than their parents, while the remaining 20.7% say they're faring about the same. Here are three ways younger generations are financially worse off than their older counterparts. More equality Younger generations have navigated adulthood with more freedoms than a lot of their parents may have had. Gender and racial pay gaps, along with other barriers to wealth-building, certainly still affect Gen X and millennials.
Persons: they're, Gen, Xers, Clever, Gen X, Tara Unverzagt, I'm, millennials, Louis Fed, Unverzagt Organizations: Financial Security, SurveyMonkey, Education Data Initiative, CNBC, Pew Research Locations: U.S
But with the market at an all-time high, now is probably a good time to hedge against potential downside, experts say. That's especially the case because there's an elevated degree of risk facing stocks, and the cost of some insurance measures is historically cheap. Related storiesThe S&P 500 also looks overextended on a technical basis, according to many measures. AdvertisementRosenberg Research"The definition of a stretched market is one when the S&P 500 gaps 14% or more above the 200-day trendline. Beyond extreme, in fact — back to 1928, the S&P 500 has only drifted this far above the moving average 7% of the time," Rosenberg said.
Persons: Jim Smigiel, they've, Louis Fed, Phillip Colmar, Colmar, David Rosenberg, Rosenberg, Steve Sosnick, we're, Smigiel, Sosnick Organizations: Service, Nvidia, Microsoft, Bank of America's, Survey, Bank of America, SEI, Fed, Louis Fed Inflation, MRB Partners, Rebels, Rosenberg Research, Interactive Brokers Locations: Ukraine, Russia, Israel, Palestine, Suez
According to Bank of America, valuation levels explain 80% of the market's return over a 10-year period. Bank of AmericaThere are many ways to measure valuation levels in the overall market. Hussman says it's the most accurate indicator of future market returns that he's found. AdvertisementThe Conference BoardThird, the number of US states with a rising unemployment rate is spiking, meaning that the overall unemployment rate should see further upside. BullAndBearProfits.comThe US unemployment rate is already on a slight uptrend, having climbed from 3.4% in April 2023 to 3.9% as of February.
Persons: , Jon Wolfenbarger, Merrill Lynch, John Hussman's, he's, Warren Buffett, Wolfenbarger, Stocks, Woflenbarger, Cam Harvey, Claudia Sahm, Louis Fed, Jeremy Grantham, John Hussman, David Rosenberg, Goldman Sachs, David Kostin, America's Savita Subramanian, Ian Shepherdson, Shepherdson Organizations: Service, Bank of America, Business, JPMorgan, National Federation of Independent Business, Board, Treasury, Bank, America's
Adam Craig built up his real-estate portfolio over the last decade-plus using the famous BRRRR strategy — an acronym for buy, rehab, rent, refinance, and repeat. But he has stopped using the strategy for residential properties and said it isn't something he'd recommend for new investors. ATTOMAnother risk to using the BRRRR strategy is that home prices are not rising as fast as they were over the last few years. 3 approaches to use insteadInstead of the BRRRR, Craig recommended that new investors start off with one of a few easier options. This way, risk is reduced in terms of the time it will take and money it will cost.
Persons: Adam Craig, Craig, Craig doesn't, that's, doesn't, Louis Fed Organizations: Business Locations: St
But critics say it showed a telling disregard for the struggles of the many millions of Indians living in poverty. Spanning three days, the pre-nuptial event included a private performance by Rihanna, which estimates suggest cost up to $9 million. AdvertisementTripathi pointed out that 800 million of India's 1.4 billion population receive monthly food rations of wheat or rice. Sohini Kar, an associate professor at the London School of Economics, whose work focuses on urban India, told BI she agrees. Anant Ambani and Radhika Merchant serve traditional Gujarati food to villagers ahead of their pre-wedding celebrations on the outskirts of Jamnagar, India.
Persons: , Anant Ambani, Asia's, Radhika Merchant, Rihanna, Nita Ambani, Shyam Bihari, WaterAid, Haldia, Rakhi Tripathi, Tripathi, Sohini Kar, Kar, St Louis Fed, Mukesh Ambani, Ratan Tata, Nita, Stringer Organizations: Service, Business, Bank, New, of Management, London School of Economics, BI, Oxfam International, St, Bloomberg, Architectural Digest, Reliance Foundation, Reuters Locations: India, Delhi, Asia, Mumbai, Jamnagar, Gujarat
Who are these overemployed workers? AdvertisementOveremployed workers tend to be male millennials in tech or IT jobsNearly all of the overemployed workers Business Insider has spoken with have been men. "In the IT world, we never really work a full 40 hours a week," a former overemployed worker previously told BI. The typical overemployed worker is making between $100,000 and $500,000 across up to four jobsFor most overemployed workers, job juggling isn't worth the stress unless they're very well compensated. One millennial earned over $500,000 across four non-simultaneous jobs, while another worker earned over $820,000 across three roles.
Persons: , Louis Fed, Zers, Xers, Zer, Xer, overemployment Organizations: Service, Business, of Labor Statistics, WomenTech Network Locations: St
AdvertisementThat means the strong job numbers of recent months have largely been due to immigrants , specifically foreign-born workers, entering the workforce in large numbers. “Foreign-born labor force participants have accounted for all of the job growth over the last year,” Bill Adams, an economist at Comerica Bank, told The New York Times. AdvertisementAdditionally, he said these job gains haven’t come at the expense of US-born workers either. As of 2022, foreign-born workers were more likely than US-born workers to be in service, natural resources, construction, and maintenance jobs, according to the Bureau of Labor Statistics. As of January, 65.7% of foreign-born workers were working or looking for work, compared to 61.4% of US-born workers.
Persons: , ” Bill Adams, Paul Krugman, “ They're, , Louis, Miguel Faria, Castro, Donald Trump Organizations: Service, Business, Comerica Bank, New York Times, Bureau of Labor Statistics, Immigrants, Congressional, Office, St, Louis Fed
Read previewInterest rates could drop by summer, according to Federal Reserve forecasts, but buyers shouldn't expect homes to become more affordable. For prospective homebuyers, the cuts could be a path toward relief from skyrocketing mortgage rates. 30-year fixed mortgage rates are now sitting just above 6.6%, which translates to around $2,800 in average monthly payments nationwide. "Mortgage rates have come down a bit in anticipation of lower rates." Steep interest rates in recent years have made homeowners less likely to sell, contributing to a housing shortage in many cities.
Persons: , Jerome Powell, Gen Zers, Louis Fed Organizations: Service, Reserve, Business, Economics Locations: New York, Chicago, Seattle, San Francisco, San Jose, Boston
Read previewThe S&P 500's 22% tear over the last few months may just be getting started, according to Sevens Report Research, a market research firm with clients that include top Wall Street banks like JPMorgan, Morgan Stanley, UBS, and more. On the valuations front, the S&P 500's multiple would only have to rise fairly slightly to lift the index to 6,000. "The S&P 500 is already trading with an elevated forward P/E multiple of over 20X expected 2024 EPS," he said. "If sentiment gets frothy, however, and stocks trade with a multiple pushing 22X, which is far from unheard of as the forward multiple of the S&P 500 hit 21.4 on 1/2/2022, then the S&P 500 could surpass 6,000 in H2'24." Essaye also said small-cap stocks cyclical sectors like big banks, and materials and transportation firms would do well in a soft-landing scenario.
Persons: , Morgan Stanley, Tyler Richey, Richey, aren't, Louis Fed, Tom Essaye, Essaye, it's Organizations: Service, JPMorgan, UBS, Business, Investor, CNN, Federal Reserve, Nvidia, Amazon Locations: H2'24
Read previewThe labor market smashed expectations in January, adding 353,000 new jobs, far above economist forecasts of 187,000. Despite the strong headline number, however, there are signs that the job market is deteriorating beneath the surface. For one, the Bureau of Labor Statistics' household survey is showing some divergence from its payroll survey. "High labor and credit costs are beginning to materially impact corporate profits, which impacts both the labor market and (eventually) the default rate." Still, while there are signs of weakening, there are also signs of improvement in the labor market.
Persons: , Jeff Schulze, today's, Shulze, Louis Fed, Lance Roberts, Ian Shepherdson, Lauren Goodwin Organizations: Service, Federal Reserve, Business, of Labor Statistics, BLS, of Labor, ClearBridge Investments, RIA Advisors, National Federation of Independent Business, Pantheon, Bank of America's Global, New York Life Investments, ClearBridge
At its December meeting, Fed Chair Jerome Powell said the central bank could institute up to three 25-basis-point cuts this year. The first thing Sahm said to look out for is whether or not Powell makes clear that they will not cut rates at the March meeting. If he seems upbeat, it could indicate that the Fed is going to take a more dovish stance and cut rates on the earlier side. This would likely manifest via trouble in financial markets that then affects the real economy. They're taking some big risks in that they're talking about the real economy being resilient, and yet I don't think that's where — if the Fed causes a problem they're doing it in the real economy first," she said.
Persons: Jerome Powell, Claudia Sahm, Sahm, Powell, Stocks, Organizations: Louis, Business, National Bureau of Economic, Fed Locations: St, Sahm
Read previewSky-high house prices and mortgage rates have dashed many Americans' dreams of owning their own home, the chief economist of Moody's Analytics says. Meanwhile, 30-year mortgage rates have surged from historic lows of 2.5% during the pandemic to nearly 7%, Zandi noted. The so-called affordability crisis has been fueled by the lock-in effect, where homeowners on cheap mortgage rates don't want to lose it by selling. Indeed, sales volumes of existing homes slumped by 17% between February and December last year, from 4.6 million units to below 3.8 million, per the St. Louis Fed. Zandi has previously warned that several things need to happen for sales volumes to return to normal levels.
Persons: , Mark Zandi, Louis, Zandi, They've, Louis Fed Organizations: Service, Business, Louis Fed, Federal Reserve, Yahoo Finance
"For those of you younger than us who did not live through the Tech Bubble of the late 1990s, you are now living through Tech Bubble 2.0. As a reminder, the NASDAQ fell about 80% when that bubble burst in the mild recession of the early 2000s," Wolfenbarger said. AdvertisementThere is evidence that backs up Wolfenbarger's bubble claims, starting with fairly standard valuation measures like the Shiller cyclically-adjusted price-to-earnings ratio. While it's not as high as it was during the dot-com bubble, it's higher than it was in 1929 — and is at one of its most elevated levels in history. Bank of AmericaAs for what will finally deflate the bubble, Wolfenbarger is expecting a recession to hit the US economy.
Persons: , Microsoft —, Jon Wolfenbarger, Merrill Lynch, Wolfenbarger, it's, America's Michael Hartnett, Louis Fed Wolfenbarger, Jeremy Grantham, Adam Karr, Orbis Investment Management Karr, It's Organizations: Service, Apple, Nvidia, Microsoft, Business, JPMorgan, ClearBridge, Tech, NASDAQ, ClearBridge Investments Bank, America's, Bank of America, Bank of America's Global, Institute for Supply Management's Manufacturing, Orbis Investment Management, Global Fund, Federal Reserve Locations: Japan
Combine that with a steady pace of monthly job gains, a historically-low unemployment rate of 3.7%, and inflation under 4%, and it looks like a soft landing is in view. But according to a list of recession indicators from ClearBridge Investments, a downturn is still likely in the months ahead. The Conference BoardThen there's wage growth, which is also declining at a pace typically seen in recessionary environments. On a three-month moving average basis, median wage growth has fallen to 5.2% in December 2023 from 6.7% in August 2022. With the economy holding strong in recent months, consensus has swung heavily back in favor of a soft landing.
Persons: Jeff Schulze, Schulze, Louis Fed, Louis, That's Organizations: Business, ClearBridge Investments, Fourth, Institute for Supply Management, Federal Reserve, Treasury, Louis Fed
ET, the yield on the benchmark 10-year Treasury note was down by around 3.7 basis points at 4.1050% and the yield on the 30-year Treasury bond slipped 3.7 basis points to 4.3418%. U.S. Treasury yields were lower on Wednesday morning as investors brace themselves for two key pieces of economic data in the second half of the week. Two significant pieces of economic data are on the slate this week: a preliminary fourth-quarter gross domestic product growth figure is due on Thursday, followed by the Commerce Department's closely watched personal consumption expenditures price index for December on Friday. Both data points will inform the Federal Reserve as it maps out when and by how much to begin cutting interest rates, which will be a key factor in determining the path of markets and the economy this year. Auctions will be held for $60 billion of 17-week Treasury bills, $61 billion of 5-year notes and $28 billion of 2-year FRNs (floating-rate notes).
Persons: Jim Reid, Bullard, Reid, that's Organizations: Treasury, U.S, Commerce, Federal Reserve, Deutsche Bank's, Global, Bank of Canada, European Central Bank, St Louis Fed, PMI
"However, the decline in full-time employment suggests recession risks are higher than thought." Here's the drop in wage growth Roberts mentions. At the moment, CEO confidence isn't great, Roberts pointed out, which could mean further trouble ahead for employment growth. AdvertisementA warning sign for stocksWhile it will take time for the labor market outlook to become clear, Roberts said stocks are already flashing signs of trouble. But that view became less popular in the second half of 2023 as the labor market proved resilient month after month amid Federal Reserve rate hikes, and inflation dropped to under 4%.
Persons: , Lance Roberts, Roberts, St, Louis Fed, it's Organizations: Service, RIA, Business, Bureau of Labor Statistics, Conference, Federal Reserve
The last one was during the Great Recession, brought about by the global financial crisis of 2008-2009. The extended slump in bank lending comes as many Wall Street experts continue to project a pessimistic outlook for the economy, despite the surprisingly upbeat trend seen in 2023. Recession warningsThe US economy defied forecasters' gloomy predictions by dodging a recession last year, with strong consumer spending helping to prop up growth. AdvertisementBut not everyone on Wall Street is so cheerful. It might be a mild recession or a heavy recession," he added, noting it's possible that the downturn bites in 2024.
Persons: , Jeffrey Gundlach, Henry Kravis, David Rosenberg, Steve Hanke, Gary Shilling, Continentale, Janet Yellen, haven't, JPMorgan Chase, Jamie Dimon, Hanke, Rosenberg, it'd Organizations: Service, Business, Governors, Federal, Wall, Louis Federal Reserve, Bank, Federal Reserve, Philadelphia Fed, JPMorgan, Fox Business Locations: Bank, Ukraine, Gaza
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