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☆ Every month, economists expect the labor market to slow. Will it ever?
▼ + stars: | 2024-04-09 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

New York CNN —Almost every month, economists expect the hot US labor market to start showing signs of exhaustion. The booming labor market has to run out of gas eventually, right? Enjoy it while it lastsHistorically speaking, there’s only so long a really good labor market can last until, for instance, a recession or tighter financial conditions disrupt it. Taken together, that could mean the life expectancy of the current labor market isn’t very long. One big reason why the labor market continues to defy expectations is the result of a surge in immigration over the past year.

Persons: February’s, Jefferies, Thomas Simons “, ” “, Simons, Will Baltrus, That’s, ” Dante DeAntonio Organizations: New, New York CNN, Conference, Labor, Bureau of Labor Statistics, Brookings, Moody’s Locations: New York

☆ U.S. Treasury yields have peaked, say strategists for fourth straight month
▼ + stars: | 2023-11-14 | by ( Sarupya Ganguly | ) www.reuters.com time to read: +4 min

REUTERS/Dado Ruvic/Illustration Acquire Licensing RightsBENGALURU, Nov 14 (Reuters) - U.S. Treasury yields will fall in coming months, though not as sharply as forecast previously, according to bond strategists polled by Reuters, who said for a fourth month running in even greater numbers that the 10-year note yield had peaked. The benchmark 10-year Treasury note yield breached the 5% mark last month for the first time since July 2007, more than a full percentage point above its August low of 3.96%. Yet, when asked whether the 10-year note yield had peaked in the current cycle, an overwhelming 94% majority of respondents, 30 of 32, said it had. The interest-rate sensitive 2-year Treasury note yield , currently at 5.04%, was expected to decline about 20 basis points by end-January, before falling to 4.00% in a year, according to the survey. If realized, this would mean a complete reversal of the inverted spread between yields of U.S. 2-year and 10-year Treasury notes - historically a reliable indicator of impending recession - by end-October 2024.

Persons: Dado Ruvic, Thomas Simons, Mike Sanders, Sarupya Ganguly, Prerana Bhat, Purujit Arun, Anitta Sunil, Sujith Pai, Christina Fincher Organizations: REUTERS, Rights, Treasury, Reuters, Federal Reserve, Hamas, Jefferies, Madison Investments, Thomson Locations: U.S, Israel

☆ Before the Fed decision, all eyes will be on this big Treasury debt announcement Wednesday
▼ + stars: | 2023-10-31 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Olivier Douliery | Afp | Getty ImagesAuctions of government debt, normally routine events for the Treasury Department, have suddenly become very important to financial markets. That's why an announcement Wednesday on refunding, entailing the size of auctions as well as the duration mix of the debt that will be issued, is expected to draw even more market interest. Indeed, the two entities are both pivotal in determining how the U.S. is going to manage its mammoth debt load. That symbiotic relationship will be on full display this week when the Treasury Department makes its refunding announcement Wednesday at 8:30 a.m. ET, and the Fed follows with its decision on interest rates that same day at 2 p.m.

Persons: Janet Yellen, Olivier Douliery, Josh Emanuel, Emanuel, Morgan Stanley, Stanley Druckenmiller, Druckenmiller, Alexander Hamilton, Paul Tudor Jones, she's, Dhingra, Thomas Simons Organizations: Treasury, Foreign Investment, United States, Treasury Department, Afp, Getty, Federal Reserve, Duquesne Capital, Robin Hood Foundation, Jefferies Locations: Washington ,, refunding, Wilshire, U.S

The projections prompted U.S. Treasury debt yields to fall slightly, with the benchmark 10-year yield last at 4.88%. "Interest in today's borrowing projections have been higher than normal," said Thomas Simons, money market economist at Jeffries in New York. Investors awaited the Treasury's quarterly refunding statement on Wednesday for details on which maturities will be increased as the department pursues record borrowing levels. QUARTERLY RECORDSThe reduced $776 billion borrowing estimate would still be a record for any October-December period, exceeding the $689 billion in the 2021 quarter boosted by high COVID-19 relief outlays. In the third calendar quarter of 2023, the Treasury said it borrowed $1.01 trillion and ended that period with a cash balance of $657 billion.

Persons: Rick Wilking, Thomas Simons, Jeffries, Steven Zeng, Wednesday's, Zeng, Karen Brettell, David Lawder, Daniel Burns, Davide Barbuscia, Andrea Ricci, Richard Chang Organizations: REUTERS, U.S . Treasury, Treasury, Investors, Deutsche Bank, Thomson Locations: Westminster , Colorado, U.S, California, New York

A slew of recent hotter-than-expected economic data has eased recession concerns without raising fears of a September rate hike. "Further rate hikes would risk sending the economy into a hard landing," said Thomas Simons, U.S. economist at Jefferies. "Instead, the Fed can look to a strategy of maintaining current policy rates for a long time as the best way to administer restrictive monetary policy to the economy." ET, Dow e-minis were up 31 points, or 0.09%, S&P 500 e-minis were up 5.25 points, or 0.12%, and Nasdaq 100 e-minis were up 23 points, or 0.15%. Asset management firm Blackstone Inc (BX.N) and vacation rentals platform Airbnb (ABNB.O), which are set to join the S&P 500 before the bell on Monday, were down 0.5% and 0.1%, respectively.

Persons: Brendan McDermid, Blackstone, Thomas Simons, Goldman Sachs, Janus Henderson, Wells, Ankika Biswas, Shristi, Savio D'Souza, Vinay Dwivedi Organizations: New York Stock Exchange, REUTERS, Micron, Deutsche Bank, Airbnb, Dow, Nasdaq, Federal Reserve, Traders, Jefferies, Morgan Asset Management, Janus Henderson Investors, Bank of England, Bank of, Dow e, Micron Technology, Blackstone Inc, L3Harris Technologies, Thomson Locations: New York City, U.S, Bank of Japan, Bengaluru

In the past, he would have swiftly chopped 10% of the workers that run his bag-making machines, or about 15 people. Faced with the tightest job market in decades, many have become less trigger-happy with layoffs, even in the face of a cooling economy. But, so far, the economy has continued to grow, albeit more slowly, and the job market has powered onward. Reuters Graphics'HOLD ONTO YOUR LABOR FORCE'At least one major company has adopted a formal strategy of hoarding workers. "I don't think it's the case that many businesses are holding onto workers who are idle," she said.

Persons: Kevin Kelly, Nathan Frandino, Kelly, Alan H, Shaw, they're, Dana Peterson, Peterson, Arnold Kamler, Julia Pollak, Thomas Simons, We're, Timothy Aeppel, Dan Burns, Paul Simao Organizations: Emerald Packaging, REUTERS, Packaging, Employers, Federal Reserve, Labor, Reuters Graphics, Norfolk, Reuters, U.S, Survey, Labor Department, Conference Board, Business Council, Kent International, Jefferies, Thomson Locations: California, Union City , California, U.S, San Francisco, Norfolk Southern, downturns, Atlanta, New York, South Carolina, rehire, Los Angeles

The Fed last week raised its policy rate to the 5.25%-5.50% range, the 11th increase in the last 12 meetings. Core inflation is still pretty elevated," Powell said in a press conference after the end of the Fed's two-day policy meeting. We think we're going to need to hold policy at restrictive levels for some time. The Fed's policy rate influences the economy by changing what lenders charge consumers for credit card, auto, and home loans or what businesses pay on bonds or for credit lines. "Given that inflation is still sticky, they're going to end up with rates either too high or as high as they are for too long.

Persons: Antulio Bomfim, Bomfim, what's, Jerome Powell, Powell, Lindsay Owens, Thomas Simons, Howard Schneider, Dan Burns, Paul Simao Organizations: Trust Asset Management, Fed, Reuters Graphics Reuters, STAR, North Star, Open, Jefferies, Thomson Locations: U.S

CNN —Wall Street bankers, investors and economists have for months waffled over whether a US recession is coming. But for some Americans, the unforgiving economic pain typical during recession has already set in. Consumer spending accounts for about two-thirds of economic output, so if more Americans are forced to cut back because they were laid off, that might throw the US economy into a recession. Bank of America Chief Executive Brian Moynihan told CNN last week that he expects a mild recession early next year, rather than the late 2022 recession many have predicted. That means that laid-off Americans were often able to find a new job quickly due to a hot job market.

Persons: Al Brown, Brown, it’s, ” Brown, That’s, Allison Joyce, haven’t, Nina McCollum, hasn’t, She’s, ” McCollum, ”, Thomas Simons, ” Simons, Eva Marie Uzcategui, —, Timothy A, Clary, Brian Moynihan, frustrates McCollum, Regina Walton, Walton, she’s, “ It’s, I’ve, ” Walton, “, I’m, Richard Murray, Murray, he’s, you’re Organizations: CNN, Wall, Flyers, New, New Hanover NCWorks, Workforce, Bloomberg, Getty, Investors, Jefferies, National Bureau of Economic Research, Traders, New York Stock Exchange, Bank of America, San Francisco Bay Area, Companies, Consolidated Omnibus Budget, Cascade Locations: Concord , North Carolina, America, New Hanover, Wilmington , North Carolina, Cleveland , Ohio, Miami , Florida, AFP, San Francisco Bay, “, Boston

The Education Department last week said loan payments would resume in October. Reuters GraphicsA White House source said Biden plans to announce new actions on Friday to protect student loan borrowers in the wake of the ruling. Another challenge to at least some of those who face student loan repayment: Managing new debt taken on when student loan payments were off the table. The New York Fed found the debt payment holiday boosted credit scores of student loan borrowers, opening the door to take on other debt. Delinquency rates on student loans plummeted from roughly 10% before the payment holiday to below 1% at the end of the first quarter of this year.

Persons: Joe Biden's, Biden, Thomas Simons, Simons, Morgan Stanley, forbearance, Michael S, Dan Burns, Andrea Ricci Organizations: U.S, Biden, White, Republicans, Department, New York Fed, Reuters, Federal Reserve, Jefferies, York Fed, New, University of Chicago, Derby, Thomson Locations: U.S, New York

☆ US jobless claims hold at 20-month high, existing home sales tick up in May
▼ + stars: | 2023-06-22 | by ( Dan Burns | ) www.reuters.com time to read: +6 min

The median expectation among economists polled by Reuters was for 260,000 new claims. The latest reading compared with a median economists' estimate of 1.782 million so-called continued claims. Existing home sales rose 0.2% to a seasonally adjusted annual rate of 4.3 million units last month, the National Association of Realtors said. Economists polled by Reuters had forecast home sales would fall to a rate of 4.25 million units. Home resales, which account for the largest share of U.S. housing sales, tumbled 20.4% on a year-on-year basis in May.

Persons: Thomas Simons, Simons, Jerome Powell, Lawrence Yun, Dan Burns, Chizu Organizations: Bureau of Labor Statistics, Reuters, Jefferies, Investors, National Association of Realtors, Economists, Mortgage, Association, Thomson Locations: Massachusetts, South, West, Northeast, Midwest

☆ US retail sales rose in May
▼ + stars: | 2023-06-15 | by ( Bryan Mena | ) edition.cnn.com time to read: +4 min

Retail sales at stores, online and in restaurants grew 0.3% in May from April, the Commerce Department reported on Thursday. Retail sales data is adjusted for seasonality but not for inflation. Excluding sales at gasoline stations, retail spending increased by a faster clip of 0.6%. From a year ago, overall retail sales rose 1.6% in May. Impact of the labor marketWhile retail sales held up in May, spending has erred on the weaker side after a big jump in January.

Persons: Brian Field, ”, Joshua Shapiro, Maria Fiorini Ramirez, Jerome Powell, Thomas Simons, Deborah Weinswig Organizations: DC CNN, Commerce Department, Sensormatic Solutions, CNN, Federal Reserve, Jefferies, “, Coresight Locations: Washington

☆ The Federal Reserve paused its interest-rate hikes after 10 consecutive increases
▼ + stars: | 2023-06-14 | by ( Noah Sheidlower | ) www.businessinsider.com time to read: +7 min

The Federal Reserve announced it's pausing interest-rate hikes at its Wednesday meeting. This comes after 10 consecutive interest-rate increases in 15 months. The Federal Open Market Committee (FOMC) announced it's holding interest rates steady at its Wednesday meeting, putting a pause on the central bank's 10 consecutive increases in 15 months. "Without a meaningful downside surprise in both jobs and inflation, a final interest-rate hike remains in the cards for July." Following the failures of Silicon Valley Bank and First Republic Bank, credit conditions tightened, in part pushing the Fed to skip this month's rate hike amid a lending pullback.

Persons: —, Jerome Powell, Powell, Seema Shah, Shah, Thomas Simons, Simons, Marta Norton, Kathy Gramling, Gramling, Norton, there's, Price Organizations: Federal Reserve, Service, Market, Fed, Asset Management, Jefferies, Valley Bank, First Republic Bank, Morningstar Wealth's America, EY, Consumer, Morningstar Wealth, Norton

☆ US services sector softens, factory orders boosted by defense
▼ + stars: | 2023-06-05 | by ( ) www.reuters.com time to read: +5 min

"Momentum had been very strong in the services sector since the reopening process began, but the sector is clearly cooling down now," Thomas Simons, U.S. economist at Jefferies, wrote in a note. The services sector is at the center of the battle against inflation, as services prices tend to be stickier and less responsive to rate hikes. ISM services PMISome economists view the ISM services prices paid gauge as a good predictor of personal consumption expenditures (PCE) inflation. Excluding the defense sector, orders were down 0.4%, and excluding transportation orders - where military orders again had the largest footprint - bookings were down 0.2%. With consumer spending shifting more toward services, consumer goods orders slid for a third straight month to their lowest level since February 2022.

Persons: Thomas Simons, Simons, Lucia Mutikani, Dan Burns, Chizu Nomiyama, Paul Simao Organizations: Federal, Institute for Supply Management, Reuters, PMI, ISM, Fed, Jefferies, U.S, Services, Commerce Department, Factory, Thomson Locations: U.S

☆ US job growth expected to moderate but remain at brisk pace in March
▼ + stars: | 2023-04-07 | by ( Lucia Mutikani | ) www.reuters.com time to read: +5 min

Economists said the revisions brought the claims series closer to other data that have suggested the labor market was losing speed. Surveys from the Institute for Supply Management this week offered a downbeat assessment of the labor market. The labor market is expected to significantly loosen up starting in the second quarter as companies respond more to a slowdown in demand caused by the higher borrowing costs. Small businesses, like restaurants and bars, have been the main drivers of job growth since the recovery from the pandemic. "This presents a lot of downside risks for the labor market," said Thomas Simons, an economist at Jefferies in Bloomfield, New Jersey.

A round of financing on Sunday raised through JPMorgan had given First Republic access to $70 billion in funds. First Republic Bank's stock closed up 10% on news of the rescue but its shares fell 18% in after-market trading, after the bank said it would suspend its dividend. [1/2] A person walks past a First Republic Bank branch in Midtown Manhattan in New York City, New York, U.S., March 13, 2023. It said it would exercise an option to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank, which confirmed it would provide liquidity to the bank against sufficient collateral. Since March 8, before last week's collapse of SVB, European banks have lost around $165 billion in market value, Refinitiv data shows.

☆ Banks sought record Fed liquidity in wake of SVB collapse
▼ + stars: | 2023-03-16 | by ( Michael S. Derby | ) www.reuters.com time to read: +5 min

That reverses a substantial portion of the balance sheet reduction accomplished since last summer. The bank lending facility is backstopped by $25 billion from the Treasury Department’s Exchange Stabilization Fund. Record discount window borrowing was somewhat unexpected as many analysts had thought banks would instead gravitate to the new lending facility. That said, some saw the discount window borrowing surge as a positive by itself. Reuters GraphicsBALANCE SHEET UPSWINGThe surge in emergency lending caused the Fed’s balance sheet to stop shrinking and grow notably larger.

☆ SVB fallout: Is my money safe?
▼ + stars: | 2023-03-13 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +6 min

New York CNN —The question on so many bank customers’ minds in the aftermath of Silicon Valley Bank’s stunning collapse: Is my money safe? US customers held at least $151.5 billion in uninsured deposits by the end of 2022, SVB’s latest annual report said. But before markets opened this week, the Biden administration took an extraordinary step, guaranteeing that SVB customers will have access to all their money starting Monday, even uninsured deposits. Many SVB customers had much more than $250,000 deposited and now that they can’t get their money, some companies are struggling to make payroll. “I don’t think people should panic, but it’s just prudent to have insured deposits versus uninsured deposits,” Hatfield said.

☆ U.S. inflation roller coaster prompts fresh look at long-ignored money supply
▼ + stars: | 2023-01-26 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

The recent decline in the money supply comes as the Fed has been aggressively raising rates to push inflation back to its 2% target. That dynamic changed in the last two years, though, with money supply trends moving in roughly the same direction as inflation pressures: As money supply rose rapidly into early 2022, so did inflation; since M2 started a persistent decline last summer, inflation pressures have also receded. To be sure, measuring money supply is complicated, with no one way to do it. Bullard, acknowledging the cooling off of money supply, said this downshift in money "bodes well for disinflation," which means the Fed is likely to face an enduring trend of lower price pressures. Economists, meanwhile, are still taking on board whether money supply is something they need to pay greater mind to as they contemplate monetary policy and inflation.

☆ Markets think the Fed is about to deliver a smaller rate hike, but here's one big reason the central bank could stay aggressive on its next move
▼ + stars: | 2023-01-14 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

Investors are locking in expectations that the Fed will downshift its interest rate hike in February. The December core rate was 0.3% on a monthly basis, up from 0.2% in November. Shelter inflation that monitors costs for renters and homeowners climbed 0.8%. "Bond yields moving lower, the VIX moving lower and the dollar moving lower suggests that the iceberg of fear that we've seen for the last year almost is easing," Russell said. "The market looks out and they see a scenario of lower inflation … they see that we're getting to the end of this aggressive rate hiking."

☆ Expectations for the Fed to downsize future rate hikes soar after CPI shows inflation cooled in December
▼ + stars: | 2023-01-12 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Investors on Thursday were pricing in a more than 90% chance the Fed will reduce the size of its interest rate hike in February. The more bullish view on a potential downshift was sparked by cooler prices in the December inflation report. But there are 'lingering pressures' within core inflation for the Fed to consider. Investors also chopped down expectations for a March 22 rate hike of 50 basis points, to 5.4% from 18.6%. Core CPI that excludes energy and food prices rose 0.3%, meeting expectations but it was slightly higher than 0.2% in November.

☆ Jobless benefits rolls grow but U.S. labor market remains resilient
▼ + stars: | 2022-12-29 | by ( Dan Burns | ) www.reuters.com time to read: +6 min

Meanwhile, the number of people receiving benefits after an initial week of aid rose 41,000 to 1.710 million in the week ending Dec. 17. The latest report is the first since February to show them breaching the lower end of the 1.7-1.8 million trend that prevailed in the years leading up to the coronavirus pandemic, a level seen then as emblematic of a tight labor market. Reuters GraphicsAnd, while the figures for new benefits claims have been choppy in recent weeks, they have held well below the 270,000 threshold that economists see as a red flag for the labor market. The unemployment rate is estimated to have remained unchanged at 3.7%. "This dichotomy of demand cannot persist indefinitely, but it will help the labor market achieve a softer landing than it would otherwise."

☆ Dow and stock market tumbles. So much for an end-of-year rally
▼ + stars: | 2022-12-15 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +2 min

New York CNN —Christmas is just ten days away, and investors are still hoping for a Santa Claus rally. The Dow tumbled more than 700 points, or 2.1%, Thursday, and it is down about 4% in December following solid gains the previous two months. The S&P 500 is now off more than 4% for the month while the Nasdaq has sank 5%. The Fed raised rates by “just” a half of a percentage point Wednesday, as expected. It didn’t help that the government also reported a much bigger drop in retail sales for November than expected on Thursday.

☆ Fed discount window borrowing is edging up, but is it a problem?
▼ + stars: | 2022-12-09 | by ( Michael S. Derby | ) www.reuters.com time to read: +5 min

In March 2020 at the onset of the coronavirus pandemic discount window borrowing surged to a peak of around $50 billion. Reuters GraphicsA JUMP IN BORROWINGDiscount window borrowing is opaque by design, and firm conclusions are difficult to reach, analysts say. “There really shouldn't be a reason discount window borrowing is increasing at all,” said Thomas Simons, an economist with investment bank Jefferies. “The increase in discount window borrowing may be a sign that funding pressures are building at the fringes of the market,” Abate wrote. Rising discount window borrowing might also have implications for the Fed's ongoing efforts to shrink the size of its balance sheet.

☆ Investors look for clues on consumer health as holiday shopping kicks off
▼ + stars: | 2022-11-25 | by ( David Randall | ) www.reuters.com time to read: +4 min

NEW YORK, Nov 25 (Reuters) - Investors are closely watching U.S. retail stocks as a barometer of consumer confidence as inflation bites, as the most important shopping season of the year begins on Friday. That would come in below both the 13.5% jump reported last year, and the 9.3% gain in 2020. Expectations for purchasing long-lasting manufactured goods fell 21% due to high interest rates and high prices, the survey found. Shares of Walmart are up 7.5% for the month to date, while shares of Target are down 1.2%. Kohl's, meanwhile, withdrew its forecast as it faces weakening demand due to rising prices.

☆ Dollar drops as U.S. nonfarm payrolls show mixed results
▼ + stars: | 2022-11-04 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +4 min

U.S. nonfarm payrolls increased 261,000 last month, data showed on Friday. However, the unemployment rate rose to 3.7% from September's 3.5%. The odds of a 75-basis-point rise went as high as 64% immediately after the payrolls data. Despite the strong jobs data, Fed officials on Friday said a smaller rate increase is still on the table for the December policy meeting. read moreThe dollar fell 1.1% against the yen to 146.65 yen , posting losses for a third straight week.

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