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☆ The Profit Squeeze Is On
▼ + stars: | 2023-06-13 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

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Persons: Dow Jones

☆ The Case for an Inflation Cool-Down
▼ + stars: | 2023-06-13 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

With the Fed determined to bring down inflation, the latest CPI release plays a major role in just how much more the central bank will want to tighten the screws on businesses and individuals looking to borrow money. Photo: Mike Blake/ ReutersThe Federal Reserve is poised to move to the sidelines—at least temporarily. Even though the latest reading on U.S. consumer prices is still too hot for the Fed’s comfort, Tuesday’s consumer price data adds to the case for it cooling rapidly enough that policy makers might opt to raise rates just one more time, or perhaps not raise them at all.

Persons: Mike Blake Organizations: Federal

☆ For Corporate Spending, Something’s Gotta Give
▼ + stars: | 2023-06-12 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Persons: Dow Jones

☆ Is This ‘Recession’ in the Room With Us Now?
▼ + stars: | 2023-06-07 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Despite a rise in the so-called Anxious Index, a recession hasn’t been forthcoming. Photo: iStockIt is OK to say a recession is about to hit the U.S., and it is OK to predict one won’t. What probably isn’t OK is to put too much confidence in either forecast these days.

☆ Super-Powered Labor Market Fights the Fed
▼ + stars: | 2023-06-02 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Persons: Dow Jones

☆ Surprising Strength in Job Openings Isn’t Good News for Stocks
▼ + stars: | 2023-06-01 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Persons: Dow Jones

☆ America’s Travel Resurgence Is Finally Here
▼ + stars: | 2023-05-27 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

☆ Online Shopping Is Getting Old
▼ + stars: | 2023-05-19 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

☆ Don’t Swing at the Yield Curve
▼ + stars: | 2023-05-17 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

The inverted Treasury yield curve is hitting extreme new levels. But paradoxically, it may be suggesting that investors are both more worried about a recession and less worried. WSJ’s Dion Rabouin explains. Illustration: David FangWhen the Federal Reserve pushes shorter-term interest rates above long-term Treasury yields, it has typically been a sign that the central bank has tightened to the point that a downturn beckons. Confidence in the predictive power of such yield curve inversions is a big part of why many investors believe the economy is now destined for a recession.

☆ How Car Sales Could Keep the Economy Humming
▼ + stars: | 2023-05-16 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Sales gains at motor vehicle dealers seem likely to continue, and strengthen, in the months ahead. The Commerce Department on Tuesday reported that retail sales rose a seasonally adjusted 0.4% in April from a month earlier after slipping 0.7% in March. That was less than the 0.8% economists polled by The Wall Street Journal had expected. But sales excluding gasoline stations, car dealers, building-materials stores and food services—the so-called control group that economists use to track the underlying pace of consumer spending— rose 0.7%. That put control spending above its first-quarter average, setting the stage for another quarter of spending gains.

☆ A Debt-Ceiling Catch-22 for Investors
▼ + stars: | 2023-05-15 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

As Democrats and Republicans debate raising the debt ceiling, they both agree that a default would be disastrous for the economy. Photo Illustration: Madeline MarshallNothing focuses politicians’ minds on cutting deals like cratering financial markets. And nothing stays investors’ hands from hitting the sell button like a belief that an 11th hour deal will be struck. This paradox is part of what makes the debt-ceiling negotiations so precarious.

☆ Can Inflation Fall Fast Enough for the Fed?
▼ + stars: | 2023-05-10 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

WSJ’s Nick Timiraos explains how 2% became the central bank’s sweet spot, and what happens when the U.S. economy strays from it. Photo Illustration: Preston JesseeInflation is still too high. That probably won’t lead Federal Reserve policy makers to raise rates when they meet next month, but unless inflation comes down significantly in the months ahead, Fed policy makers will lace up their boots and start hiking all over again. Maybe it will.

☆ No Recession Doesn’t Mean No Worries for Stocks
▼ + stars: | 2023-05-08 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

☆ Slowing Jobs Juggernaut Gives Fed Breathing Room
▼ + stars: | 2023-05-05 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

WSJ’s Nick Timiraos explains how 2% became the central bank’s sweet spot, and what happens when the U.S. economy strays too far from it. Photo Illustration: Preston JesseeReally, the job market is cooling. Or, rather, getting a little less hot. The Labor Department on Friday reported that the U.S. economy added 253,000 jobs last month—more than the 180,000 economists polled by The Wall Street Journal were looking for—and that the unemployment slid to 3.4% from 3.5%, matching the multidecade low it ticked in January. Average hourly earnings rose more than expected, and were up 4.4% from a year earlier.

☆ Help Still Wanted: Fewer Job Openings Won’t Faze the Fed
▼ + stars: | 2023-05-02 | by ( Justin Lahart | ) www.wsj.com time to read: +1 min

Fed policy makers have been arguing that a drop in the number of job vacancies could effectively cool off the job market. Photo: Jeff Chiu/Associated PressThere was a big debate among economists and U.S. policy makers last year over whether job openings could come down without tanking the job market. Well, job openings are down and the job market is still strong, but the debate is hardly resolved. Newsletter Sign-up Markets P.M. Agenda-setting analysis and commentary on the biggest corporate and market stories from our Heard on the Street team. Data on job openings from the Labor Department and, before December 2000, from a series constructed by Federal Reserve Bank of San Francisco economist Regis Barnichon that goes back to 1951, shows that there has never been a decline of 20% or more in job openings without a substantial increase in the unemployment rate.

☆ Too Hot for the Fed to Stop
▼ + stars: | 2023-04-28 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Wage growth stayed elevated to start the year. Photo: Bebeto Matthews/Associated PressInvestors have been hoping the Federal Reserve’s message following next week’s policy-setting meeting will be “hike in May and go away.” But recent economic data suggests the central bank won’t be able to do that. The Labor Department on Friday reported that its employment cost index rose a seasonally adjusted 1.2% last quarter from the fourth quarter, stronger than the 1% economists polled by The Wall Street Journal expected. That put it 4.8% above its year-earlier level—not far below the 5.1% it clocked in the fourth quarter, and much higher than Fed policy makers think is consistent with their 2% inflation goal.

☆ Recession Can Wait—the GDP Report’s Bright Side
▼ + stars: | 2023-04-27 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

The GDP report showed that consumer spending grew at a 3.7% annual rate last quarter. Photo: Angus Mordant/Bloomberg NewsThe recession so many investors are expecting didn’t come in the first quarter. The Commerce Department on Thursday reported that real, or inflation-adjusted, gross domestic product grew at a 1.1% annual rate in the first quarter. That was lower than the fourth quarter’s 2.6% and below the 2% economists polled by The Wall Street Journal had forecast. Still, it counted as a solid report.

☆ Yes, You Can Still Sell Your House—Maybe Even Buy One
▼ + stars: | 2023-04-24 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

PHOTO: Joe Raedle/Getty ImagesThe spring home-selling season is under way, and America’s housing market is a mess. Just not quite the mess it was at the end of last year. Last week, the National Association of Realtors reported that a seasonally adjusted 4.44 million existing (previously owned) homes were sold in March at an annual rate. That was down from February’s 4.55 million and far below the 5.69 million registered in March of 2022. Also last week, the National Association of Home Builders said that its housing-market index—a measure of builders’ views on the market—rose to 45 this month from March’s 44.

☆ The Labor Market Might Be Bending; It Isn’t Breaking
▼ + stars: | 2023-04-20 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

The latest U.S. jobs report gives important context on what comes next for how American companies are managing growing fears of a recession. WSJ’s Dion Rabouin explains. PHOTO: Jordan Vonderhaar/Bloomberg NewsThe U.S. job market isn’t at a rolling boil anymore. It is hardly tepid. That is good news for the economy, but less good for any investors hoping the Federal Reserve won’t raise rates at its meeting next month, much less embark on an easing campaign anytime soon.

☆ Lower Job Openings Could Be a Welcome Sign for U.S. Economy
▼ + stars: | 2023-04-04 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

All those tech layoffs are starting to show up in employment statistics. Yet they still show little sign of spreading to other sectors. In its monthly report on job openings and labor turnover, the Labor Department on Tuesday said that a seasonally adjusted 1.5 million people were laid off or discharged from their jobs in February, down from 1.72 million in January. That is a very low figure: In 2017 through 2019 monthly layoffs averaged 1.81 million.

☆ Bank Stress, Softer Inflation Just Made Fed’s Life Easier
▼ + stars: | 2023-03-31 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

There’s no telling how much recent trouble in the banking sector will weigh on the U.S. economy. Inflation data from the Commerce Department on Friday made it a tad easier for the Federal Reserve to wait and see, though, rather than to keep raising rates and finding out later that it had made a mistake. In its February report on personal income and spending, the Commerce Department reported that its measure of consumer prices—the Fed’s favored inflation gauge—rose 0.3% in February from January, putting it 5% above its year earlier level.

☆ Higher Rates Are Coming for U.S. Companies
▼ + stars: | 2023-03-28 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

For the banking sector, the impact from higher rates is happening right now. For corporate borrowers, it largely has yet to come. But it will come.

☆ Fed Hiked and So Did Silicon Valley Bank
▼ + stars: | 2023-03-22 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

Federal Reserve policy makers raised rates on Wednesday, but they tried to do so in a kind way. Maybe that is the most important takeaway. The quarter-point increase in the Fed’s target range was largely, but not entirely, expected. With all the recent trouble in the banking sector, some economists had forecast the central bank would hit the pause button. Similarly, although interest-rate futures put higher chances on a rate increase than not, they didn’t rule out a pause.

☆ The Fed Flies in the Dark
▼ + stars: | 2023-03-22 | by ( Justin Lahart | ) www.wsj.com time to read: 1 min

When the Federal Reserve’s rate-setting committee gathers for one of its two-day meetings, it is usually pretty clear ahead of time what it is going to do. In an era of greater central-bank transparency, Fed policy makers have usually telegraphed their intentions. Investors have also generally been able to take a look at what is going on with the economy to make an educated guess. But the meeting that will conclude Wednesday isn’t like that. Worries about the banking system have upended the central bank’s plans, and heading into their meeting on Tuesday policy makers themselves might not have known what they would decide.

☆ Local Banks Could Leave Gaps That Are Hard to Fill
▼ + stars: | 2023-03-18 | by ( Justin Lahart | Telis Demos | ) www.wsj.com time to read: 1 min

Tighter belts for smaller banks could count as a big problem for some parts of the U.S. The failures of Silicon Valley Bank and Signature Bank as well as questions about First Republic Bank ’s future have cast a sudden pall on the banking sector. An emerging concern is that customers at community and regional banks, worrying that their deposits aren’t safe, might pull their money, putting it into money-market funds or accounts at bigger banks.

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