When unemployment is high inflation is low

Share to Twitter Share to Linkedin Topline While the Federal Reserve has made progress cooling the economy, there has still been “little convincing progress” in bringing down wage growth and high inflation, according to analysts at Goldman Sachs, who predict that it will remain difficult for the central bank to get surging prices under control without a recession. Key Facts Markets have rebounded in recent weeks thanks to growing optimism that inflation may have peaked and the U.S. economy can avoid a recession, but not all experts agree with that rosy outlook. Analysts at Goldman Sachs led by chief economist Jan Hatzius argue that the Federal Reserve still has a monumental task ahead in bringing down inflation to a normalized level without causing a recession, with a “narrow path to a soft landing.” The firm notes that GDP growth has slowed to a pace where supply can “catch up” to demand thanks to declining fiscal support and a … [Read more...] about Fed Still Has A ‘Long Way To Go’ As It Tries To Tame Inflation Without Causing A Recession, Goldman Predicts

Share to Twitter Share to Linkedin The state of the economy and high inflation rates are hot topics of late. High inflation rates have prices at the grocery store, gas pumps, and everywhere else, eating at your wallets and significantly diminishing your disposable income. First, it is essential to understand how inflation affects you and the risks it poses in your life. The ultimate risk of inflation for you is that your purchasing power declines. Not only are your day-to-day needs affected, but inflation has risks and declining dollar value that seeps its way into your investment portfolios. Inflation impacts every aspect of your finances, which is why HerMoney and the Alliance for Lifetime Income released another chapter of their State of Women 2022 study , which found that 73% of women are worried about inflation and listed it as their top financial fear. The survey stated that almost nine out of ten women are more worried about the risk of … [Read more...] about What You Need To Do To Protect Your Business From The High Cost Of Inflation

Share to Twitter Share to Linkedin Inflation is up 8.5% since this time last year according to this morning’s CPI report . Economists expected the CPI to increase by 8.7% . Continued high inflation is lowering real earnings and undermining consumer confidence . The Federal Reserve has the biggest role to play in combatting high inflation, but better economic policies from President Biden and Congress would help. Inflation is fundamentally a problem of too much money chasing too few goods. The Federal Reserve controls the money supply, so it is ultimately responsible for the long-term path of inflation. Right now the economy is sending the Fed mixed signals: The latest jobs report shows the economy created 528,000 new jobs in July, but real GDP declined the last two quarters, which typically signals a recession. Labor productivity also fell each of the past two quarters, which is another sign of slower economic growth. The declines in real GDP … [Read more...] about Inflation Still High And Biden’s Policies Are Not Helping

Share to Twitter Share to Linkedin Topline The Federal Reserve reaffirmed that it is unlikely to take its foot off the pedal as it continues to raise interest rates until inflation eases in a meaningful way, with officials indicating that it will “take some time” before a reversal in monetary policy, according to the minutes from the central bank’s latest policy meeting. Key Facts Fed officials “emphasized” that a slowdown in demand would “play an important role” in reducing inflationary pressures, with most participants saying that it would likely “take some time” before the “bulk” of monetary policy tightening has a meaningful impact. Though there was little specific guidance for future rate increases, some officials acknowledged that there was a risk that the central bank could raise rates and tighten financial conditions by more than necessary. The Federal Reserve raised interest rates by 75 basis points at its last policy meeting in … [Read more...] about Fed Officials Pledge More Big Rate Hikes Until There Is A ‘Meaningful’ Decline In Inflation

- A + A KUALA LUMPUR (Aug 17): The ringgit ended flat against the US dollar on Wednesday (Aug 17), amid the possibility of the Federal Reserve (Fed) taking a significant interest rate adjustment to bring rising inflation under control. At 6pm, the local currency stood at 4.4660/4685 versus the greenback from Tuesday’s close of 4.4660/4680. The United States Commerce Department data showed construction of new homes hit 18-month lows in July. The data pointed out that new residential construction in the US fell 9.6% last month to 1.45 million, suggesting that the real estate market is struggling more than expected, and this could generate further inflation. A trader said this has further boosted the greenback’s safe-haven appeal, ahead of the release of the Fed’s July meeting minutes and US July retail sales data later on Wednesday that could give further clues about the pace of future interest rate hikes. He said Fed officials have signalled the need for more … [Read more...] about Ringgit settles flat vs US dollar on Aug 17 as inflation fears cloud sentiment

Oil prices rose on Wednesday, recovering from six-month lows hit the previous day, as a larger-than-expected drop in U.S. oil and gasoline stocks reminded investors that demand remains firm, if overshadowed by the prospect of a global recession. Brent crude futures rose 13 cents, or 0.1%, to $92.47 a barrel by 0035 GMT. West Texas Intermediate (WTI) crude futures climbed 27 cents, or 0.3%, to $86.80 a barrel. The contracts slumped about 3% on Tuesday as weak U.S. housing starts data spurred concerns about a potential global recession. "A drawdown of U.S. gasoline stockpiles for a second straight week has reassured investors that demand is resilient, prompting buys," said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd. "Still, the oil market is expected to stay under pressure, with fairly high volatility, due to worries over a potential global recession," he said. Close U.S. crude and fuel stocks fell in the latest week, according to market sources … [Read more...] about Oil prices recover from 6-month lows after drop in US stockpiles

Despite a looming delay in the Philippines’ rise to high income status, the Marcos administration’s goal to slash poverty to a record low of 9 percent is attainable, the country’s chief economist said on Wednesday. During the 2022 economic forum of the Economic Journalists’ Association of the Philippines and San Miguel Corp., Socioeconomic Planning Secretary Arsenio Balisacan noted that during his first stint at the National Economic and Development Authority (Neda), he shepherded the “AmBisyon Natin 2040” vision to make the Philippines a high income country where no one would be classified as poor 18 years from now. “Considering the impact of the COVID-19 pandemic, achieving that target will likely be delayed by a few years, even under the most optimistic projections for growth. In all likelihood, new disruptions and unforeseen events will emerge—circumstances, like the pandemic, that we cannot even imagine at this point,” the head of the state planning agency said. The Marcos … [Read more...] about PH trek to high income status to be delayed

Organization of Petroleum Exporting Countries secretary-general Haitham Al-Ghais - A + A VIENNA (Aug 17): Global oil markets face a high risk of a supply squeeze this year as demand remains resilient and spare production capacity dwindles, the new head of the Organization of Petroleum Exporting Countries (OPEC) said. Fears over slowing consumption in China and the wider world — which have pushed crude prices 16% lower this month — have been exaggerated, OPEC secretary-general Haitham Al-Ghais said in an interview with Bloomberg Television. At the same time, producers in OPEC and beyond are running out of extra supplies they can bring to market, Al-Ghais said at OPEC's Vienna headquarters. The Kuwaiti oil executive was appointed as the group's top diplomat this month. "We are running on thin ice, if I may use that term, because spare capacity is becoming scarce," Al-Ghais said. "The likelihood of a squeeze is there." International oil prices have retreated to … [Read more...] about OPEC chief sees high risk of oil squeeze amid bullish demand

Share to Twitter Share to Linkedin Topline Shares of the nation’s largest retailer, Walmart, surged over 5% on Tuesday after the company reported revenue and profits that came in above Wall Street expectations, while management also cited progress in reducing excess inventory levels—though consumers are turning to lower-margin items amid higher prices due to inflation. Key Facts Walmart reported quarterly revenue of $152.8 billion—compared to $150.8 billion expected by analysts, while net income for the period was $5.15 billion (up from $4.28 billion a year earlier). The stock jumped 5% to nearly $140 per share on Tuesday, as the retail giant said it benefited from higher prices and increased shopping visits from consumers, with U.S. same-store sales rising 6.5% in the quarter. Walmart is gaining market share in categories like groceries, but as customers grapple with higher prices due to inflation, they have prioritized lower-margin food … [Read more...] about Walmart Jumps 5% After Solid Earnings And Further ‘Progress’ Reducing Inventory Levels

Pedestrians walk near the main entrance to the Reserve Bank of New Zealand located in central Wellington, New Zealand. REUTERS/David Gray/File photo WELLINGTON -New Zealand’s central bank on Wednesday delivered its seventh straight interest rate hike and signaled a more hawkish tightening path over coming months to rein in stubbornly high inflation. The aggressive tone of the Reserve Bank of New Zealand’s (RBNZ) statement warning of future hikes being brought forward caught some traders by surprise, lifting the local dollar and sending swap rates higher. The RBNZ raised the official cash rate (OCR) by 50 basis points to 3 percent as expected, a level not seen since September 2015, and crucially, it now sees rates at 4 percent by early next year, compared to a previous projection of 3.7 percent. Wednesday fourth straight 50-bps hike, along with earlier smaller increases that lifted the cash rate from a record low of 0.25 percent in October, marked the most aggressive tightening … [Read more...] about NZ central bank signals aggressive tightening pace after 50-bps hike