Weekly newsletter November 28 to December 2
November 28, 2022
November 29, 2022
Consumer Confidence Edges Down Slightly in November as Inflation Worries Heighten The mood of consumers grew more pessimistic in November, the Conference Board said on Tuesday. The business organization’s overall consumer confidence index dipped to 100.2 from 102.2 in October, while the present situation index measuring how consumers view current economic conditions decreased to 137.4 from 138.7. The future expectations index, reflecting how consumers see the economy performing in the short term, declined to 75.4 from 77.9. Photo: AP: Ng Han Guan
Global markets fall after protests erupt in China over Covid lockdowns Global markets fell on Monday after widespread protests in China against the country’s stringent Covid-19 restrictions roiled investor sentiment. European markets opened broadly lower, tracking the performance of Asian shares. The FTSE 100 (UKX) dropped 0.7%, the CAC 40 (CAC40) fell 0.6%, and the DAX (DAX) was down 0.5%.
The confidence of Americans to spend money or make investments is a key barometer of the overall health of the economy, with consumer spending making up nearly 70% of the economy’s output. The index has been declining fairly consistently since a year ago, when it stood at 115, but for a couple of increases this summer. However, Americans have continued to spend and, on Monday, they spent an estimated $11.3 billion online on a day retailers have branded as Cyber Monday, according to Adobe Analytics’ analysis of spending.
US stock futures — an indication of how markets are likely to open — fell, with Dow futures down 0.3%, or 108 points. Futures for the S&P 500 were down 0.5%, while futures for the Nasdaq dropped 0.6%. The Chinese yuan, also known as the renminbi, tumbled against the US dollar. The onshore yuan, which trades in the tightly controlled domestic market, briefly weakened by 0.9%. It was 0.5% lower at 7.213 per dollar by the afternoon. In offshore dealing, the currency slipped 0.3% to 7.213 per dollar. Commodities also slid on China concerns. Oil prices dropped sharply, with investors concerned that surging Covid cases and protests in China may sap demand from one of the world’s largest oil consumers. Source: https://edition.cnn.com/2022/11/27/investing/markets-china-lockdowns-intlhnk/index.html
Photo: SETH WENIG/AP-FILE Source: https://www.usnews.com/news/economy/articles/2022-11-29/consumerconfidence-edges-down-slightly-in-november-as-inflation-worries-heighten
November 30, 2022
December 1, 2022
Senate passes railroad legislation to prevent a strike The Senate has approved a measure meant to avert a railroad strike in eight days — without the paid sick days rail workers have been asking for. Senators passed the bill to force unions to accept a tentative agreement reached earlier this year between railroad managers and their workers and make an imminent strike illegal — without making any changes — by an 80-15 vote. They rejected a measure to offer paid sick leave, 52-43. Both measures required 60 votes to clear the Senate.
Photo: MARIO TAMA/GETTY IMAGES
Employers Added 127,000 Jobs in November, Below Estimates, as Labor Market Begins to Cool While medium-sized businesses added workers, small and large companies saw declines in their numbers of jobs. Leisure and hospitality firms led the increase, with 224,000 workers added, but manufacturing saw a decline of 100,000. Wage gains, meanwhile, moderated in the month but are still running 7.6% higher than a year ago.
Biden applauded the move and vowed to sign it as soon as Congress sends it to his desk — which could happen as soon as Friday. "Working together, we have spared this country a Christmas catastrophe in our grocery stores, in our workplaces, and in our communities," he said in a statement. Railway managers and stakeholders — who feared the supply chain disruptions to items like gas and food — are already celebrating. "We are extremely relieved that Congress took action to head off a strike that would have had serious consequences for America's farmers, who are grappling with an increase in input costs and barge rates due to severe drought conditions on the Mississippi River," said National Corn Growers Association President Tom Haag.
“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” said Nela Richardson, chief economist of the private payroll firm ADP. “In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.” The Fed has been hoping the labor market would cool off and, with it, pressure on wages and overall inflation. The central bank has raised interest rates by 3% over the past several months and will likely increase them another half percentage point in two weeks when it meets. That, in turn, has raised borrowing costs across the economy from credit cards to mortgages. Source: https://www.usnews.com/news/economy/articles/2022-11-30/employers-added-127000-jobs-in-november-below-estimates-as-labor-market-begins-to-cool
Photo: Kent Nishimura/Los Angeles Times via Getty Images Source: https://www.npr.org/2022/12/01/1140123647/rail-strike-bill-senate
December 2, 2022
Photo: Chris Kleponis/EPA
Biden and Macron seek to heal trade rift and present united front on Ukraine Joe Biden has sought to heal a rift with France’s President Emmanuel Macron and other European leaders over trade, admitting there are “glitches” in $739bn legislation that he says can be fixed. The US president was speaking on Thursday while hosting Macron for the first state visit of his presidency. The leaders expressed unity on support for Ukraine’s war against Russia but faced questions about their differences on trade. America’s Inflation Reduction Act, or IRA, is set to pour billions of dollars into environmentally friendly industries, with strong backing for American-based manufacturers. The White House touts the IRA as a groundbreaking effort to restart domestic manufacturing and promote renewable technologies while challenging Chinese dominance. But European Union governments have cried foul at the “Made in America” emphasis and threatened to launch a trade war by subsidising their own green economy sector. In a joint press conference, Biden said of the legislation: “There’s obviously going to be glitches in it and need to reconcile changes in it.” He promised that “tweaks” would be made, adding that the US “never intended to exclude folks that were cooperating with us”. Source: https://www.theguardian.com/us-news/2022/dec/01/biden-macron-trade-riftukraine-france-us