Weekly newsletter August 29 to September 02
August 29, 2022
August 30, 2022
The US economy had more job openings than expected in July US employers aren't ditching their "help wanted" signs just yet, according to new data released Tuesday by the Bureau of Labor Statistics. The number of open positions ticked up unexpectedly in July, with around 11.2 million jobs available, slightly higher than June's revised total of 11 million openings, according to the latest Job Openings and Labor Turnover Survey (JOLTS). Economists had expected there to be about 10.5 million jobs added, according to estimates from Refinitiv.
Photo: CBS News
Honda, LG to build $4.4 billion electric vehicle battery plant in U.S. Major South Korean battery maker LG and Japanese automaker Honda are investing $4.4 billion in a joint venture in the United States to produce batteries for Honda electric vehicles in the North American market, the two companies said Monday.
There were close to two jobs available per job seeker in July, up from 1.8 in June, according to the data. That's not what the Federal Reserve was hoping for: The Fed views the near-record job openings as helping to drive wage increases, which in turn could potentially keep inflation elevated. Total hires and separations were down slightly from June. Just under 6.4 million people were hired in July, down about 74,000 from June. The number of workers who quit their job totaled 4.18 million, down from 4.25 million in June.
The plant's site is still undecided, but construction will begin in early 2023, with mass production of advanced lithium-ion battery cells to start by the end of 2025, they said. "Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid- to long-term strategy of promoting electrification in the fastgrowing North American market," said LG Energy Solution Chief Executive Youngsoo Kwon. Demand for electric vehicles is expected to grow in the U.S. and many other nations because of concerns about climate change and pollution, as well as rising gas prices. All the world's top automakers are strengthening their EV lineups. A new U.S. law includes a tax credit of up to $7,500 that could be used to defray the cost of purchasing an electric vehicle. Source: https://www.cbsnews.com/news/honda-lg-4-4-billion-electric-vehicle-battery-plantus/
Photo: ABC News Source: https://edition.cnn.com/2022/08/30/economy/jolts-july-jobopenings/index.html#:~:text=The%20number%20of%20open%20positions,Labor%20T urnover%20Survey%20(JOLTS).
August 31, 2022
September 01, 2022
Stocks Fall Again, Wiping Out More of the Summer's Gains Stocks are broadly lower on Wall Street in midday trading Thursday, extending their losing streak to a fifth day as investors remain wary of how the economy will hold up as the Federal Reserve ratchets up interest rates to fight inflation. The S&P 500 was down 0.9% as of 12:23 p.m. Eastern. The Dow Jones Industrial Average fell 101 points, or 0.3%, to 31,408 and the Nasdaq composite slid 2%.
Photo: CNBC News
Fed’s Williams pushes back on market expectations of a rate cut next year New York Federal Reserve President John Williams said Tuesday he expects interest rates to continue higher and to remain at those levels until inflation is subdued. Echoing recent comments from Fed Chair Jerome Powell, Williams told The Wall Street Journal that he also is in the higher-for-longer camp when it comes to monetary policy.
The major indexes have closed lower four days in a row. The latest wave of selling continues a weak patch that has wiped out much of the gains the market made in July and early August. Technology stocks were once again the heaviest weight on the market. Nvidia dropped 11.9% after the chipmaker said the U.S. government imposed new licensing requirements on its sales to China. On Thursday, the Labor Department said applications for unemployment benefits fell last week, the latest sign the job market continues to shine despite a slowing U.S. economy. The government’s August jobs report, due out Friday, is also expected to show the job market remains robust.
“We’re going to need to have restrictive policy for some time,” he said in a live interview. “This is not something we’re going to do for a very short period and then change course.” That outlook comes just a few days after Powell also used the “for some time” language to describe his expectations for benchmark interest rates. In his annual policy speech at Jackson Hole, Wyoming, the Fed chief noted that “the historical record cautions strongly against prematurely loosening policy. Williams said he’s been encouraged by some tightening in financial conditions following the hikes but added he needs to see more before considering a change in policy. Photo: US News Source: https://www.cnbc.com/2022/08/30/feds-williams-pushes-back-on-marketexpectations-of-a-rate-cut-next-year.html
Source: https://www.usnews.com/news/business/articles/2022-09-01/asian-shares-trackwall-street-slide-on-expected-rate-raises
September 01, 2022
Photo: CNN.com
Mortgage rates rise again after Fed says it will take 'forceful' steps to curb inflation Mortgage rates continued to climb this week following comments by Federal Reserve Chairman Jerome Powell that the central bank is taking "forceful and rapid" steps to reduce inflation and slow the economy. The 30-year fixed-rate mortgage averaged 5.66% in the week ending September 1, up from 5.55% the week before, according to Freddie Mac. That is significantly higher than this time last year when it was 2.87%. After starting the year at 3.22%, mortgage rates rose sharply during the first half of the year, hitting a high of 5.81% in mid-June. But since then, concerns about the economy and the Federal Reserve's mission to combat inflation have made them more volatile. Rates had fallen in July and early August as recession fears took hold. But Powell's comments during a speech last Friday refocused investors' attention back on the central bank's fight against inflation, pushing rates higher. The Federal Reserve does not set the interest rates mortgage borrowers pay directly, but its actions influence them. Instead, mortgage rates tend to track 10-year US Treasury bonds. As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and, with it, mortgage rates. Source: https://edition.cnn.com/2022/09/01/homes/mortgage-rates-september-1/index.html