WEEKLY NEWSLETTER JANUARY 02 TO JANUARY 06
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JANUARY 02, 2023
JANUARY 03, 2023
Uncertainty Prevails for the U.S. Economy in 2023 After a tumultuous 2022, most economists are in agreement on the one word to describe their outlook of what 2023 holds in store for the U.S. economy: uncertainty. It’s not that they lack opinions, it’s just that the divergence of views on what will happen is as large as it has been in many a year – or decades.
Photo: Michele Tantussi/Reuters
Third of world economy to hit recession in 2023, IMF head warns For much of the global economy, 2023 is going to be a tough year as the main engines of global growth – the US, Europe and China – all experience weakening activity, the head of the International Monetary Fund has warned.
There’s the pessimistic view that the economy will slow under the weight of the most aggressive tightening of monetary policy in four decades and a severe recession will follow before the Federal Reserve stops raising interest rates. By then, unemployment will have risen from its current 3.7% annual rate to a high of 5% or more and the nation’s gross domestic product will suffer two or more quarters of negative growth. The optimists believe that a resilient consumer, sitting on a pile of cash gathered from the rounds of stimulus during the coronavirus pandemic and higher wages, along with a corporate sector that has strong balance sheets will allow the economy to muddle through maybe with flat or low growth.
The new year is going to be “tougher than the year we leave behind,” IMF managing director Kristalina Georgieva said. “Why? Because the three big economies – the US, EU and China – are all slowing down simultaneously,” she said. Georgieva said that China, the world’s secondlargest economy, is likely to grow at or below global growth for the first time in 40 years as Covid-19 cases surge following the dismantling of its ultra-strict zero-Covid policy. The “US is most resilient,” she said, and it “may avoid recession. We see the labour market remaining quite strong but the Fed may have to keep interest rates tighter for longer to bring inflation down.” Photo: Página web Souce: https://www.theguardian.com/business/2023/jan/02/third-of-world-economy-to-hitrecession-in-2023-imf-head-warns
Souce: AP Photo/Patrick Semansky, File https://www.usnews.com/news/national-news/articles/2023-01-03/uncertaintyprevails-for-the-economy-in-2023
JANUARY 04, 2023
JANUARY 05, 2023
U.S. Moves to Bar Noncompete Agreements in Labor Contracts A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees’ ability to work for a rival. In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees’ ability to work for a rival.
Most Americans feeling economic anxiety
The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hairstylists, doctors and software engineers.
According to a poll released by Gallup this week, nearly eight out of 10 Americans believe the coming year will be one of economic difficulty compared to just two out of 10 who think 2023 will bring prosperity.
Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of U.S. workers in the private sector, hold down pay because job switching is one of the more reliable ways of securing a raise.
Photo: Vadym Drobot / Storyblocks
The economic anxiety comes as wages were unable to keep up with the rising cost of goods in 2022, although final figures for the year have not been released by the Bureau of Labor Statistics (BLS). According to the BLS, average wages increased by 5.1% from December 2021 through November 2022. During that same time, the Consumer Price Index increased by 7.1%, indicating that Americans lost buying power during the year. The Federal Reserve has increased interest rates throughout 2022 to lower inflation to around 2%. Whether the Federal Reserve continues to be aggressive with interest rate increases will largely determine whether there is a decline in the U.S. economy, according to Jerry Nicklesburg, an adjunct professor of economics at the UCLA Anderson School of Management and senior economist with the UCLA Anderson Forecast. Souce: https://www.denver7.com/news/national/most-americans-feeling-economicanxiety-but-there-are-ways-to-decrease-worry
Photo: Stefani Reynolds for The New York Times Souce: https://www.nytimes.com/2023/01/05/business/economy/ftc-noncompete.html
JANUARY 06, 2023
Photo: Brendan McDermid | Reuters
Dow futures gain more than 350 points after jobs report shows lighter wage gains than expected U.S. stock futures jumped Friday when the December jobs report showed that employment was only slightly stronger and wage gains were less than expected, showing some signs of progress amid the Federal Reserve’s interest rate hikes to tame inflation. Dow Jones Industrial Average futures rose 370 points, or 1.12%. S&P 500 futures gained 1.10%, while Nasdaq100 futures jumped 1.13%. The December nonfarm payrolls report showed that the U.S. economy added 223,000 jobs last month, slightly higher than the expected 200,000 jobs economists polled by the Dow Jones expected. In addition, wages grew slower than anticipated, increasing 0.3% on the month where economists expected 0.4%. Investors are so far cheering the December jobs report, which showed wage gains may have moderated, signaling progress in the fight against high inflation. Still, it’s likely to lead to choppy markets.
Souce: https://www.cnbc.com/2023/01/05/stock-market-futures-open-to-close-news.html