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While this optimistic scenario is plausible, it remains less likely than the economy entering a significant and extended cyclical slowdown or full-blown recession in the course of 2023. Rates are now expected to rise further and remain higher for longer in response to the persistent strength in the job market and service sector inflation. Expectations for the end of 2023 are still trending higher as service sector inflation has continued rising faster than originally anticipated. Service sector activity levels also strengthened significantly in January according to business surveys conducted by the Institute for Supply Management. Similar strength in service sector activity and inflation has been visible across the Eurozone and other major economies.

As a result, research on business cycles moved in other directions, and policymakers increasingly aimed to eliminate cyclical instability altogether. Oil and gas cycles have been closely correlated with each other and with U.S. manufacturing activity. On average, troughs in oil prices occur within ±3 months of a turning point in U.S. manufacturing activity, while troughs in gas prices occur within ±4 months. Some softness in manufacturing activity as well as oil and gas prices should therefore be expected at this point. If the current slowdown proves to be a mid-cycle soft patch, gas and especially oil prices are likely to rise strongly later in 2023.

☆ U.S. manufacturing output surges in January
▼ + stars: | 2023-02-15 | by ( ) www.reuters.com time to read: +2 min

Manufacturing output increased 1.0% last month, the Federal Reserve said on Wednesday. Two additional rate hikes of 25 basis points are expected in March and May. The increases in manufacturing and mining offset the tumble in utilities, leaving overall industrial production unchanged. Industrial output dropped 1.0% in December. Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, rose 0.6 percentage point in January to 77.7% in January.

☆ U.S. weekly jobless claims increase, labor market still tight
▼ + stars: | 2023-02-09 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, Feb 9 (Reuters) - The number of Americans filing new claims for unemployment benefits increased more than expected last week, but remained at levels consistent with a tight labor market. Initial claims for state unemployment benefits rose 13,000 to a seasonally adjusted 196,000 for the week ended Feb. 4, the Labor Department said on Thursday. Economists polled by Reuters had forecast 190,000 claims for the latest week. Claims have remained low despite high-profile layoffs in the technology industry as well as the interest rate-sensitive finance and housing sectors. Economists speculate that severance packages were delaying the filing of unemployment benefits claims while the abundance of job openings made it easier for laid off workers to find new jobs.

☆ U.S. weekly jobless claims increase, labor market remains tight
▼ + stars: | 2023-02-09 | by ( Lucia Mutikani | ) www.reuters.com time to read: +5 min

The jobs market has remained resilient despite growing economic headwinds from the Federal Reserve's interest rate increases. While labor market strength keeps the U.S. central policy on its monetary policy tightening path, it also suggests that a much anticipated recession is nowhere near. The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, fell 2,500 to 189,250, the lowest level since last April. "But even so, the job market remains remarkably strong." "There is no sign of easing of labor market tightness here."

☆ Tech, housing, and manufacturing might already be in a recession. They could bring the US economy down with it.
▼ + stars: | 2023-02-04 | by ( Jacob Zinkula | ) www.businessinsider.com time to read: +6 min

But the tech, housing, and manufacturing industries might be already. "We have a manufacturing recession, a housing recession, a tech recession," she said in a Bloomberg post last week. In this scenario, parts of the economy would "take turns suffering rather than simultaneously" — and the broader economy would never reach recession status. There were over 55,000 reported tech layoffs during the first 20 days of January, more than the entire first half of 2022. It's led some to declare that a "tech recession" is already upon us.

☆ Boom in January jobs shows employers fear worker shortage more than recession
▼ + stars: | 2023-02-03 | by ( Patti Domm | In | ) www.cnbc.com time to read: +5 min

January's super strong jobs report underscores that employers are more worried about not having enough workers than they are about a slowing economy. But Zandi notes that of all the components of the jobs report, the one that matters most to the Fed is average hourly wages, and they have been coming down. It's just really strong," said Tom Simons, money market economist at Jefferies. The strong report means interest rates will continue to rise, and the Federal Reserve will raise benchmark overnight lending rates by another quarter point in March. ISM Services data Friday reinforced some of the strength in the jobs report.

☆ U.S. weekly jobless claims fall; layoffs surge in January
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +3 min

The claims report showed the number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 11,000 to 1.655 million during the week ending Jan. 21. The raft of layoffs in the technology sector pushed up job cuts in January. A separate report on Thursday from global outplacement firm Challenger, Gray & Christmas showed job cuts announced by U.S.-based employers surged 136% to 102,943. The technology sector accounted for 41% of the job cuts, with 41,829 layoffs. Retailers announced 13,000 job cuts, while financial firms planned to lay off 10,603 workers.

Distillate inventories amounted to 118 million barrels on Jan. 27, which was 24 million barrels (-17% or -1.43 standard deviations) below the prior ten-year seasonal average. The inventory deficit has narrowed from 31 million barrels (-22% or -2.05 standard deviations) on Oct. 7 (“Weekly petroleum status report”, U.S. Energy Information Administration, Feb. 1). Chartbook: U.S. distillate fuel oil inventoriesBy contrast, distillate consumption has been restrained by high prices and the marked slowdown in the industrial economy. Growth in distillate consumption peaked in late 2021 and has been weakening steadily since then, with consumption down year-on-year in most months since April 2022. Related columns:- U.S. manufacturing is in recession (Reuters, February 1, 2023)- Recession now or later?

☆ U.S. job openings increase to five-month high as labor market stays tight
▼ + stars: | 2023-02-01 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

There were 1.9 job openings for every unemployed person in December, the Labor Department's monthly Job Openings and Labor Turnover Survey, or JOLTS report, showed on Wednesday. Job openings, a measure of labor demand, increased by 572,000 to a five-month high of 11.0 million on the last day of December. Others speculated that job openings had been overstated because of difficulties adjusting the data for seasonal fluctuations. "A jump in job openings in the retail sector is also at odds with a lower pace of seasonal hiring around the holidays." The job openings rate up shot to 6.7% from 6.4% in November.

☆ Stocks dip, dollar falls as Fed decision looms
▼ + stars: | 2023-02-01 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +4 min

Markets have been pricing in the possibility of a rate cut by the Fed in the back half of the year. Reuters Graphics Reuters GraphicsOn Wall Street, U.S. stocks fell in early trading ahead of the Fed announcement, with each of the 11 major S&P sectors lower, led by a 1.53% decline in energy shares. The pan-European STOXX 600 index (.STOXX) lost 0.17% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.08%. The dollar started February on a lower note, continuing its weakening trajectory of the previous four months. The dollar index fell 0.421%, while the euro was up 0.52% against the U.S. currency at $1.0918.

In France, the bloc's second-biggest economy, factory activity returned to growth albeit not as strongly as initially forecast. In Asia, factory activity contracted in January as the boost from China's COVID reopening had yet to take full effect. China's factory activity shrank more slowly in January after Beijing lifted tough COVID curbs late last year, a private sector survey showed. China's Caixin/S&P Global manufacturing (PMI) nudged up to 49.2 in January from 49.0 in December, staying below the 50 mark for a sixth straight month. Factory activity expanded in January in Indonesia and the Philippines but shrank in Malaysia and Taiwan, PMI surveys showed.

LONDON, Jan 31 (Reuters) - China’s manufacturing activity has started to increase as the coronavirus epidemic wanes, after the country abandoned its suppression strategy that severely disrupted the economy with a series of city lockdowns. The NBS manufacturing index appears low, barely above the theoretical 50-point threshold dividing expanding activity from a contraction, but that may understate the increase in activity. But China’s manufacturing index has been generally lower and less variable than the comparable indices published for the United States and the euro zone by the Institute for Supply Management and S&P Global respectively. China's index has a standard deviation of 1.59 points compared with 3.99 points for the United States and 4.88 for the euro zone. If that timeline holds, manufacturing and freight transportation activity is likely to increase over the next two months.

☆ Covid broke supply chains. Now on the mend, can they withstand another shock?
▼ + stars: | 2023-01-16 | by ( Alicia Wallace | ) edition.cnn.com time to read: +8 min

“Because of that, supply chains are not as brittle as they were three years ago,” he said. “There could be another huge black swan event in a month that throws everything upside down; but for right now, it seems like respondents are predicting steadiness in the supply chain.”If anything, the pandemic’s shock to the supply chain should be a wake-up call, said Jack Buffington, director of supply chain and sustainability at First Key Consulting and assistant professor of supply chain management at the University of Denver. “I would categorize it as ‘efficiently broken,’” said Buffington, whose own book about supply chains, “Reinventing the Supply Chain: A 21st Century Covenant with America,” had its release delayed due to supply chain issues. “All supply chains really are is supply and demand, and there’s been so much disruption in materials and consumer demand related to labor and inflation and geopolitics,” he said. The complexities related to a globalized supply chain, human systems aren’t capable of handling it.”He added: “Covid wasn’t the cause of the problems with the supply chain, it was a trigger to show how bad it was,” he said.

The moves continued the trend lower for the dollar, which in the final three months of 2022 posted its biggest quarterly loss in 12 years. The dollar index was at a 7-month low, last down 0.2% at 103.54. FOCUS ON INFLATIONBut, with consumer inflation data due later this week, it is the outlook for price pressures that is still front and centre for investors. Fed fund futures now show investors believe the most likely outcome for the Fed's February meeting is for a 25-basis- point increase. Optimism about a swift economic recovery sent China's offshore yuan to five-month highs against the dollar on Monday.

☆ Dollar slips near seven-month lows after jobs data
▼ + stars: | 2023-01-09 | by ( Amanda Cooper | ) www.reuters.com time to read: +4 min

But, with consumer inflation data due later this week, it's the outlook for price pressures that is still front and centre for investors. The dollar index , which measures the U.S. dollar against six major currencies, was last down 0.1% at 103.62, having fallen 1.15% on Friday as investors shifted into riskier assets. However, the labour market is still tight and likely to deter the Fed from slowing down any time soon, analysts said. The Japanese yen was the outlier among the major currencies, easing 0.2% to 132.33 per dollar. Optimism over a swift economic recovery sent China's offshore yuan towards five-month highs against the dollar on Monday.

☆ The S&P 500 could fall another 22% and investors' view of more downside for stocks is too mild, Morgan Stanley says
▼ + stars: | 2023-01-09 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The S&P 500 could sink by more than investors anticipate, Morgan Stanley warned on Monday. Investors see the S&P 500 sitting at 3,500-3,600. The S&P 500 tumbled 19% in 2022 but has been pushing higher as 2023 trade gets underway. The S&P 500 was pushing its rally into a second consecutive session on Monday, up by more than 1% to around 3,945. "The bottom line, we don't think a 3,500-3,600 S&P 500 is consistent with the consensus view for a mild recession.

☆ Stock sentiment is positive despite lousy headlines
▼ + stars: | 2023-01-09 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +4 min

New York CNN —It’s only early January, but so far in 2023 the pendulum on Wall Street has swung (to paraphrase Billy Joel) from sadness to euphoria. But why is there such optimism on Wall Street all of a sudden? But it also showed the pace of job growth is slowing — and that could be a precursor to an eventual recession. But Wall Street is a funny place: Good news is often viewed as a bad sign, and vice versa. As long as the Fed can get inflation under control, investors might not be too concerned by a recession anyway.

☆ Cramer: This market is split in two and only one part is worth owning right now
▼ + stars: | 2023-01-08 | by ( Jim Cramer | ) www.cnbc.com time to read: +10 min

Why didn't those who think Powell is a doofus speak up and say maybe he's gotten it right? Its market cap looks too big, but it might actually be right because of its service revenue. The rest of the market, including stocks like Micron, will trade as it has in any recession. But the bottoming process for high-growth tech is pretty unfathomable because it was never valued right in the first place. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.

☆ Dow soars 700 points after December jobs and services activity reports boost hopes for Fed rate cuts
▼ + stars: | 2023-01-06 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

US stocks jumped Friday after December payrolls and services-sector data. The economic data showed signs of easing inflation, bolstering hopes the Fed will cut interest rates this year. The S&P 500 avoided a fifth consecutive weekly decline. Meanwhile, the Institute for Supply Management's services-sector report showed prices paid decelerated while services activity shrank for the first time since May 2020. Billionaire investor Leon Cooperman sees just a 5% chance the S&P 500 pares back the losses it's logged since March 2022.

☆ U.S. service sector contracts in December, price increases slow - ISM survey
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: +3 min

The Institute for Supply Management (ISM) said on Friday its non-manufacturing PMI dropped to 49.6 last month from 56.5 in November. It was the first time since May 2020 that the services PMI fell below the 50 threshold, which indicates contraction in the sector that accounts for more than two-thirds of U.S. economic activity. Outside the COVID-19 pandemic slump, this was the weakest services PMI reading since late 2009. The weakness in the services sector came in the wake of another ISM survey this week showing manufacturing slumping for a second straight month in December. The ISM survey's gauge of new orders received by services businesses fell to 45.2 from 56.0 in November.

For the week, both Brent and WTI were down over 8%, their biggest weekly dives to start the year since 2016. "The oil market might be regaining some composure following the bloodbath earlier this week, but the upside potential remains limited, at least in the near term. That U.S. jobs report caused the U.S. dollar to rally as investors bet that inflation is easing and the U.S. Federal Reserve (Fed) need not be as aggressive as some feared. A weaker dollar can boost demand for oil, as dollar-denominated commodities become cheaper for holders of other currencies. Stock markets in China, the world's largest crude oil importer, logged a five-day winning streak on Friday on investors' expectations that the Chinese economy would soon emerge from its COVID woes and stage a robust recovery in 2023.

☆ U.S. factory orders tumble in November on aircraft
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: +2 min

The Commerce Department said on Friday that factory orders dropped 1.8% after gaining 0.4% in October. The plunge in factory orders was driven by a 6.3% drop in bookings for transportation equipment, which followed a 1.9% increase in October. Transportation equipment orders were weighed down by a 36.4% tumble in orders for civilian aircraft. Orders for defense aircraft fell 8.6%. Motor vehicle orders rose 0.6%.

Summary Oil prices edge higher after steep lossesU.S. manufacturing contracts, prices decline in Dec -ISMChina COVID data shows under-reported deaths, WHO saysJan 5 (Reuters) - Oil prices rebounded on Thursday after opening the year down more than 9%, the worst yearly start in over three decades, as investors took advantage of the decline to buy futures on expectations long-term fuel demand will remain steady. Brent crude futures gained 59 cents to $78.43 a barrel at 0136 GMT, while U.S. West Texas Intermediate crude futures rose 69 cents to $73.53 a barrel. U.S. crude oil inventories rose by 3.3 million barrels last week along with gasoline stocks jumping 1.2 million barrels, while distillate stocks fell, according to market sources citing American Petroleum Institute figures. Concerns about the economic disruptions as COVID-19 works its way through China, the world's biggest oil importer, have added to the pessimism around crude prices. The Chinese government increased export quotas for refined oil products in the first batch for 2023, signaling expectations of poor domestic demand.

The slowdown in manufacturing and freight has already dampened consumption of diesel and other distillate fuel oils, and consumption is likely to fall if the manufacturing downturn deepens. The Institute for Supply Management’s manufacturing activity index fell to 48.4 in December (19th percentile for all months since 1980) compared with 49.0 in November (22nd percentile). As a result, consumption is closely correlated with the acceleration and deceleration of the manufacturing and freight cycle. In line with manufacturing activity, the growth in distillate supplied has been decelerating progressively since the second quarter of 2021 and has now stalled. If the manufacturing slowdown deepens over the next six months, as seems likely, distillate consumption is likely to fall.

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