Inflation rose at the fastest pace in nearly four decades in December, as rapid price gains fueled consumer fears about the economy and sent President Biden’s approval rating tumbling.

The consumer price index rose 7% in December from a year ago, according to a new Labor Department report released Wednesday, marking the fastest increase since June 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.5% in the one-month period from November.

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https://www.foxbusiness.com/economy/federal-reserve-taper-bond-purchases-december-2021

Economists expected the index to show that prices surged 7% in December from the year-ago period and 0.4% from the previous month.

So-called core prices, which exclude more volatile measurements of food and energy, soared 5.5% in December from the previous year – a sharp increase from November, when it rose 4.9%. It was the steepest 12-month increase since 1991.

Despite the red-hot reading, stock market futures rose following the data release.

Price increases were widespread: Although energy prices fell 1.1% in December from the previous month, they’re still up 29.3% from last year. Gasoline, on average, costs 49.6% than it did last year. Food prices have also climbed 6.3% higher over the year, while used car and truck prices – a major component of the inflation increase – are up 37.3%. Shelter costs, which make up nearly one-third of the total increase, jumped 0.4% for the month and 4.1% year-over-year, the fastest pace since February 2007.

“Inflation at 7% is no joke,” said Seema Shah, chief strategist at Principal Global Investors. “It’s the highest annual CPI number since 1982 and driven not by energy prices, but by just about everything else.” While Shah said December’s number could mark the peak for annual inflation readings amid signs that supply strains are easing, other experts suggested the rampant spread of the omicron variant could bring about new difficulties for the global supply chain.

Rising inflation is eating away at strong gains and wages and salaries that American workers have seen in recent months: Real average hourly earnings rose just 0.1% in December, as the 0.5% inflation increase eroded the 0.6% total wage gain, according to the Labor Department. On an annual basis, real earnings actually declined 2.4%.

The inflation spike has been bad news for President Biden, who has seen his approval rating plunge as consumer prices rose. The White House has blamed the price spike on supply-chain bottlenecks and other pandemic-induced disruptions in the economy, while Republicans have pinned it on the president’s massive spending agenda.

The eye-popping reading – which marked the seventh consecutive month the gauge has been above 5% – will likely amp up pressure on the Federal Reserve to begin hiking interest rates as soon as March in order to combat the recent price surge. Hiking interest rates tends to create higher rates on consumers and business loans, which slows the economy by forcing them to cut back on spending.

“The Federal Reserve will most likely raise interest rates earlier than anticipated to control inflation,” said Dawit Kebede, senior economist at the Credit Union National Association. “This is in addition to ending its support for the economy in the form of large asset purchases. This will raise the cost of borrowing for consumers and will reduce excess demand for goods.”

Chairman Jerome Powell has already signaled the U.S. central bank plans to speed up its withdrawal of support for the U.S. economy in order to combat inflation, which has been higher and longer lasting than policymakers initially expected.

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“As we move through this year, if things develop as expected, we’ll be normalizing policy, meaning we’re going to end our asset purchases in March, meaning we’ll be raising rates over the course of the year,” Powell told the Senate Banking Committee during his confirmation hearing on Tuesday. “At some point perhaps later this year we will start to allow the balance sheet to run off, and that’s just the road to normalizing policy.”

Source: https://www.foxbusiness.com/economy/december-inflation-consumer-price-index

The post Inflation surges 7% in December, highest rate in 40 years first appeared on Garner Ted Armstrong Evangelistic Association.

U.S. job growth significantly undershot expectations in November, suggesting that difficulty in attracting new workers is weighing on the labor market’s recovery from the pandemic, even as COVID-19 cases dissipated nationwide.

The Labor Department said in its monthly payroll report released Friday that payrolls in November rose by just 210,000, well below the 550,000 jobs forecast by Refinitiv economists. It marked the worst month for job creation so far this year. The unemployment rate (which is calculated based on a separate survey) dropped more than expected to 4.2% from 4.6% — the lowest level since the pandemic began.

The labor market had been gaining momentum after a delta-induced slowdown over the summer, but the latest figure represents a significant drop from October’s upwardly revised number of 546,000 and September’s upwardly revised 379,000. There are still about 3.9 million fewer jobs than there were last February, before the crisis began.

“Today’s employment report is doubly disappointing, because the reference week occurred just as it looked like Covid was on the retreat,” said Justin Wolfers, a University of Michigan economist. “This was a moment for people to return to malls and to return to work. The COVID-related news has only gotten worse since then.”

The report wasn’t all bad news, however: The labor force participation rate rose to 61.8%, wages rose 4.8% from a year ago and the survey of households offered a brighter outlook, pointing to an employment gain of 1.13 million for the month. (The jobs report consists of two surveys – one based on employers and the other on households).

RSM chief economist Joe Brusuelas described the report as a “tale of two surveys.”

“Rarely has the estimate produced by the good folks at the Bureau of Labor Statistics resulted in such divergent results as that illustrated by the twin establishment and household surveys that are the foundation of the monthly tally,” Brusuelas said.

The job growth stumble comes before the emergence of the newly identified omicron variant of COVID-19, which could jeopardize the global economy’s recovery. There is still a lack of clarity over how dangerous the new variant is, including whether it is more transmissible or capable of causing more severe illness. Early evidence suggests an increased risk of reinfection.

Public health officials have urged caution against panic.

But the economic impacts of the new strain – which has been found in at least 38 countries including the U.S. – have already been felt, with the U.S. and at least 10 European nations suspending air travel from southern Africa. The 27-nation European Union also recommended an “emergency brake” on travel from southern Africa, citing the “very concerning” new variant.

Surveys for the November jobs report were conducted about three weeks ago, before the new variant was detected.

Leisure and hospitality, one of the hardest-hit sectors that has become a bellwether of sorts for the economy’s recovery, saw a gain of just 23,000 new jobs last month. By comparison, it added 170,000 new jobs in October. The sector, which includes bars, restaurants and hotels, has recovered about 7 million of the jobs it lost during the pandemic, but remains about 1.3 million below its February 2020 level.

A mixed bag of industries accounted for growth last month. Substantial gains took place in professional and business services (90,000), transportation and warehousing (50,000), and construction (31,000). But retail employment fell by 20,000 last month on a seasonally adjusted basis, despite the upcoming holiday season.

Markets remained relatively calm, despite the disappointing report.

Federal Reserve policymakers have been closely watching the labor market for signs that employment is reaching pre-crisis levels after the pandemic triggered one of the steepest – but shortest – recessions in nearly a century.

Although the jobs figure came in well below economists’ expectations, the U.S. central bank may plow ahead with tentative plans to begin more aggressively unwinding the economic support put in place in March 2020 in order to curtail surging inflation.

“If you think this report will push back the accelerated taper mentioned by Fed Chairman Jerome Powell this week, you would be mistaken,” said Jamie Cox, managing partner for Harris Financial Group.

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The central bank has been purchasing $120 billion in bonds each month throughout most of the pandemic in order to keep credit cheap and stabilize the financial markets. In November, Fed officials announced plans to scale back the program by $15 billion a month, a timeline that would end the program by late June.

Chairman Jerome Powell suggested this week that Fed officials may accelerate their plan to reduce their monthly purchases of bonds and mortgage-backed securities later this month.

“At this point, the economy is very strong, and inflationary pressures are high,” Powell said on Tuesday. “It is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner.”

Source: https://www.foxbusiness.com/economy/november-jobs-report-coronavirus-pandemic?test=38861ea43380e1402f1c90f21546ad4b

The post US hiring stumbles in November as economy adds just 210,000 new jobs first appeared on Garner Ted Armstrong Evangelistic Association.

At a time when millions of Americans are unemployed, businessman Bill Martin has a head-scratching problem: He’s got plenty of jobs but few people willing to take them.

“I keep hearing about all the unemployed people,” Martin says. “I certainly can’t find any of those folks.”

Martin helps run M.A. Industries, a plastics manufacturing company in Peachtree City, Ga. The company makes products used in the medical industry — specifically, in things like coronavirus tests and vaccine manufacturing and development.

But as he struggles to keep up with demand, Martin is finding it almost impossible to find new workers.

His difficulties are putting a spotlight on a peculiar problem in the midst of an unprecedented pandemic.

Some industries are thriving and eager to hire, which should be welcome in an economy that has recovered only a little over half of the 22 million jobs lost during the coronavirus pandemic.

Data from the Labor Department this month, for example, showed job openings at a five-month high. Meanwhile, job search site Indeed said recently that job postings are back to pre-pandemic levels.

The problem is that a lot of those openings are in industries that require in-person work, like construction, delivery services or warehousing — exactly the types of jobs now being shunned by many Americans in the midst of a fearful pandemic.

Martin says he has tried it all to hire workers. His company has offered higher wages and even posted good old-fashioned “We’re Hiring” signs.

Julia Pollak, a labor economist at employment recruitment site ZipRecruiter, says Martin is not alone in struggling to find workers.

Most job seekers, she says, are looking for remote work. The problem is that those are not the jobs available right now.

In fact, only 1 in 10 job postings in the ZipRecruiter marketplace offers remote work as an option, she says.

“There’s this huge gap between the kinds of conditions under which people are prepared to work and the kinds of conditions that they actually find in the jobs that are available,” Pollak says.

That is leading to a mismatch in filling jobs, and it’s contributing to the painful, slow recovery in jobs.

“We are 10 million jobs in the hole,” she points out. “So ideally what you’d want to see is the number of job openings to be much higher to compensate.”

For many workers, there’s an understandable fear of getting sick and then infecting kids or other family members at home.

“A pandemic is a shock both to labor demand and to labor supply, and it’s a really significant shock to labor supply,” Pollak says. “There are many, many people who have pulled back and are deciding to sort of wait out this year and come back to work when the conditions are right.”

That could continue to leave Martin from M.A. Industries in a bind, especially because his company’s products could make a difference in the fight against the pandemic.

“We talk about job growth,” he says. “But if no one wants to do it, it gets to be a problem.”

Correction –Feb. 15, 2021

An earlier version of this story incorrectly said that Bill Martin is the owner of M.A. Industries.

Source: https://www.npr.org/2021/02/15/966376492/millions-are-out-of-a-job-yet-some-employers-wonder-why-cant-i-find-workers

The post Millions Are Out Of A Job. Yet Some Employers Wonder: Why Can’t I Find Workers? first appeared on Garner Ted Armstrong Evangelistic Association.

The Labor Department said Thursday that the consumer price index in May rose 5% year over year, hotter than the 4.7% increase that was anticipated. The reading was above last month’s 4.2% print.

Prices jumped 0.6% month over month, quicker than the 0.4% increase that was expected by analysts surveyed by Refinitiv.

The annual data has a “base effects” skew due to the decline in prices that occurred at the start of the pandemic.

USED CAR PRICES HIT RECORD HIGH ON MANHEIM WHOLESALE INDEX

Used car and truck prices surged 7.3%, accounting for about one-third of the index’s gain. Food prices, meanwhile, rose 0.4% matching April’s increase. Energy prices were unchanged from April as a decline in gasoline prices was offset by an increase in natural gas and electricity costs.

Core CPI, which excludes food and energy, in May rose 3.8% annually, the most since June 1992. Core prices increased 0.7% month over month, outpacing the 0.4% increase that was expected. The index rose 0.9% in April.

Upward pressure on prices has appeared in wide swaths of the economy as businesses struggle to find materials due to supply chain bottlenecks that occurred as a result of the pandemic. Some businesses are also struggling to fill jobs because supplemental unemployment benefits have encouraged workers to stay home.

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The hot inflation reading comes with the Federal Reserve next week set to hold its June policy meeting. Investors will be paying close attention to the central bank’s comments on when it may start tapering its asset purchase program and begin raising rates.

Federal Reserve Chairman Jerome Powell has said he expects upward pressure on prices to be temporary.

Source: https://www.foxbusiness.com/economy/inflation-consumer-price-index-may-2021

The post Consumer prices surge 5% annually, most since August 2008 first appeared on Garner Ted Armstrong Evangelistic Association.

The U.S. economy created 379,000 jobs last month as the nation slowly reopens following coronavirus shutdowns.

Economists had predicted job creation of between 150,000 and 200,000. In January, the economy generated 166,000 new jobs.

Most of the jobs came in the leisure and hospitality sector, which includes restaurants, bars, hotels and other entertainment businesses.

The new jobs pushed the unemployment rate down from 6.3% to 6.2%, but some economists say those numbers likely don’t reflect actual unemployment because 4.2 million people have stopped looking for work.

The unemployment rate measures people actively looking for jobs who can’t find one.

While the jobs news is good, 9.5 million jobs don’t exist now that existed last February, and on Thursday, the Labor Department said 18 million Americans were receiving some kind of unemployment benefits in the middle of February.

On Thursday, Federal Reserve Chairman Jerome Powell said a return to “full employment” was “highly unlikely” this year.

Some 6.4% of Americans are not participating in the labor force, rates not seen since the 1970s.

Stocks were mixed on the jobs news.

Source: https://www.voanews.com/usa/us-job-creation-beats-expectations-while-unemployment-remains-above-6

The post US Job Creation Beats Expectations While Unemployment Remains Above 6% first appeared on Garner Ted Armstrong Evangelistic Association.

The U.S. economy added 1.4 million jobs in August as the unemployment rate unexpectedly tumbled, indicating the nation’s labor market is continuing a slow but steady recovery from the coronavirus pandemic.

The Labor Department’s payroll report released Friday showed the jobless rate fell sharply to 8.4%, down from 10.2% in June and a peak of 14.7% in April. It marks the first time since March that unemployment has been below 10%.

Economists surveyed by Refinitiv expected the report to show that unemployment dropped to 9.8% and the economy added 1.4 million jobs. It’s well below the combined 7.5 million jobs added in May and June before hiring cooled in July, with growth of just 1.9 million positions.

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“We are still moving in the right direction and the pace of the jobs recovery seems to have picked up, but it still looks like it will take a while – and likely a vaccine – before we get back close to where we were at the beginning of this year,” said Tony Bedikian, head of global markets at Citizens Bank. “We continue to be optimistic that the economy has turned a corner and that we’ll continue to see steady progress.”

Still, joblessness remains historically high. The unemployment rate sat at 3.5% in February, a half-century low, before the crisis began.

Government hiring helped boost the figure, with employment increasing by 344,000 in August — accounting for one-fourth of the total gains. The increase stemmed largely from the federal government’s addition of 238,000 temporary Census workers. Despite fears about budget shortfalls, local governments hired 95,000 employees last month.

Other notable gains came from retail, which added 249,000 new jobs, and professional and business services, which brought on 197,000 workers. Leisure and hospitality, the hardest-hit sector during the pandemic, filled 174,000 positions, a majority of which stemmed from bars and restaurants.

JOB GROWTH OVER NEXT DECADE EXPECTED TO BE SLOWER THAN AFTER 2008 CRISIS

Education and health services jobs jumped by 147,000, and transportation rose by 78,000. Financial activities increased by 36,000, manufacturing rose by 29,000 and wholesale trade was up by 14,000.

The number of Americans on furlough also plunged: 24.2 million people who said they not working because their employer either closed or lost business as a result of COVID-19, down from 31.3 million in July.

Over the past four months, the economy has added back about half of the 22 million jobs it lost during the pandemic, data show. There are still 11.5 million more out-of-work Americans than in February.

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The report comes amid a month-long deadlock between White House officials and Democratic leaders over another round of emergency relief for workers and businesses. Economists said the better-than-expected report should not reduce the urgency in Congress to approve more aid.

“With the national unemployment rate still elevated, and with New York and Los Angeles recently suffering through jobless rates above 16%, the urgency of passing another round of federal relief legislation hasn’t lifted in Washington,” said Mark Hamrick, a Bankrate.com senior economic analyst. “While some elected officials may be focused on the election now 60 days away, their responsibility to serve the broader part of the American people hasn’t been excused.”

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Source: https://www.foxbusiness.com/economy/august-jobs-report-coronavirus-pandemic-2020

The post US employers hire 1.4M in August as unemployment rate falls sharply first appeared on Garner Ted Armstrong Evangelistic Association.

An assembly line worker packages items from an online order to be shipped out of a Target store in Edison, N.J., Nov. 16, 2018. PHOTO: JULIO CORTEZ/ASSOCIATED PRESS

Political discourse nowadays is enough to depress anyone, and the media don’t help by ignoring good economic news. But buck up, Americans: Worker wages are growing much faster than previously reported.

The Bureau of Economic Analysis (BEA) on Tuesday published its annual revisions to personal income data, and the surprise was the huge jump in disposable income and employee compensation.

Appeared in the July 31, 2019, print edition.

Source: https://www.wsj.com/articles/the-99-get-a-bigger-raise-11564529382

The post The 99% Get a Bigger Raise first appeared on Garner Ted Armstrong Evangelistic Association.