Lowest Ever Black Jobless Rate Is Still Twice That of Whites

Lowest Ever Black Jobless Rate Is Still Twice That of Whites

Minnesota’s jobless rate is far lower than the national average, making employers particularly hungry for workers they may once have shut out.
As in many states, black workers in Minnesota are finding a more hospitable economy.
The black unemployment rate there went from 23.5 percent in 2011 to 7.5 percent last month but remained at more than twice the rate for whites.
The timing couldn’t have been better for Carmen Richardson.
After she graduated from the program five months later, the biggest names in the construction business were competing for her.
Companies can hardly afford to turn away qualified people when there are so many jobs to fill.
That is certainly true in Minneapolis, where Mr. Mortenson helped force the city’s builders into action.
Mr. Parrish, a former convict from Detroit, was the only black person working at the site.
“I was pushed aside,” Mr. Parrish said.
“They are actually just hiring good workers.” Mr. Parrish is working on buying a house with his wife in the suburbs, where he lives with his two children now.

The US might not be as close to full employment as we think

The US might not be as close to full employment as we think

While the unemployment rate is very low, other measures of the labor force suggest the economy is not at full employment.
A full employment economy would suggest stronger wage growth than we’ve seen recently.
Full employment means all the people who want to work are employed.
The Fed thinks that full employment is about 4.7%.
Beyond that, what we think we “know” is mostly assumptions about what we want the data to say.
BLS suggests that if you haven’t been looking for a job in the last 30 days, you don’t count as unemployed.
Many people have not been able to find a job in that timeframe and have given up looking.
Hard facts To prove that the change in the unemployment rate has little effect on wages, let’s hear from my friends, at 720 Global.
It is this graph that has many economists declaring the Phillips curve to be irrelevant.
And this is in spite of the fact that most Fed economists truly believe in the Phillips curve.

Stock Market Woes: The Recovery Eats Its Children

Stock Market Woes: The Recovery Eats Its Children

A common complaint among those whose sympathies lie more with Main Street than Wall Street is that the “recovery” since the financial crisis has benefited investors far more than workers.
Since the S&P 500 bottomed out in March 2009, the index has more than tripled in value; average hourly earnings, by contrast, have grown by just over 20%.
Apples and oranges, you may rightly object, but the market apparently saw a connection between the two measures when, on Friday, Feb. 2, the Bureau of Labor Statistics reported a 2.9% rise in average hourly earnings in the 12 months to January, the largest increase since 2009: the S&P closed down 2.1% on the day, then lost another 4.1% the following Monday (the steepest single-day fall since 2011).
The unemployment rate has been at or below 5% since late 2015, and the Fed funds rate, even after five hikes, is at the low end of its historical range.
Combine that with the Fed’s three expected hikes in 2018 (according to December’s projections), and the result is higher short- and long-term rates.
Rising bond yields make stocks look risky and their dividends less attractive.
(See also, The Bond Market Is Trying to Warn Us of Trouble.)
The money workers save in taxes – for a time – only adds to those wage rises, potentially stoking inflation.
Low inflation was evidence that workers who had left the labor force were still on the sidelines, which in turn kept wages low.
Then again, recent events recall the Big Rotation that Bank of America Merrill Lynch predicted shortly before the 2016 election: a Trump victory, a shift from deflationary to inflationary pressures, an end to central bank “omnipotence,” an embrace of deficits, a Main Street advantage over Wall Street.

Robots, unemployment and immigrants

Robots, unemployment and immigrants

Putting products back on the shelves will soon be fully automated, with robots doing the work previously done by humans.
In May 2016, the World Bank’s Digital Dividend Report, calculated that replacing low-skilled workers with robots in developing countries would affect two-thirds of jobs.
Today, automation already accounts already for 17 per cent of production and services.
It will account for 40 per cent within 15 years, according to World Bank projections.
It was generally assumed that a time would come in which machines would eventually do all production and humankind would be free of work, maintained from the profits generated by machines.
The statistics show that today, when people lose their jobs at a certain age, any new job they may find will almost always be for a lower remuneration.
Migration has become a major theme in elections.
However, statistics from the European Union tell us otherwise.
A study on Brexit demonstrated that immigrants had helped to increase GDP, and that the increase in productivity meant a global increase in employment.
It is clear that the real threat to employment for the large majority of citizens comes from robotisation, not immigration.

Your 401(k) probably has gun stocks in it and did Kylie Jenner’s tweet cause Snapchat stock to plunge $1.3 billion?

Your 401(k) probably has gun stocks in it and did Kylie Jenner’s tweet cause Snapchat stock to plunge $1.3 billion?

Personal Finance My father is moving to a retirement community — what do we do with his $1.8 million home?
This son and daughter wonder whether they should sell, rent or wait to inherit it.
Delta passengers were trapped on runway for 12 hours — but did they get compensation?
My grandfather left me $1,000, but my deadbeat dad ran off with it This man was estranged from his father all his life, and has been chasing this money for 25 years.
When a woman or person of color becomes CEO, white men have a strange reaction Could credit-card companies ban gun sales?
Citi to refund customers $335 million after failing to lower interest rates The issue affected around 1.75 million U.S. credit-card accounts between 2011 and 2017.
America owes millennials an apology — boomers blow their budgets eating out too Your 401(k) probably has gun stocks in it — but you can change that Black students are hit hardest by student debt Did Kylie Jenner’s tweet cause Snapchat stock to plunge $1.3 billion?
Here are 5 of the costliest tweets ever Elsewhere on MarketWatch Fed’s Dudley says balance sheet should be at least $2.9 trillion The Federal Reserve should stop shrinking its balance sheet when it gets down to a level somewhere higher than $2.9 trillion, said New York Fed President William Dudley on Friday.
The problem with today’s driverless car technology is the drivers When cars start doing the work, drivers overestimate the capabilities of their cars and disengage entirely.
Advocates and lawmakers are calling on car companies to educate drivers about what their cars will – and won’t do.

Stocks rise as rate hike jitters subside

Stocks rise as rate hike jitters subside

Yale Economics professor Robert Schiller discusses whether the U.S. economy is as solid as seen since before the recession, according to the White House.
Stocks posted gains Thursday after investors put aside concerns that the Federal Reserve will accelerate its timeline for lifting interest rates.
The S&P 500 lost 2.63 points, or 0.1%, to 2,703.96.
Minutes from the Fed’s January policy meeting revealed Wednesday that officials were less hawkish than previously thought.
After wage growth picked up last month, investors grew worried that the central bank would hike interest rates more than three times in 2018.
In the January minutes, Fed officials said there were few signs that inflation would rise faster than anticipated.
Investors also parsed a new reading on U.S. jobs.
The Labor Department on Wednesday said the number of Americans filing for unemployment benefits dipped to a near 45-year low last week, falling 7,000 to a seasonally adjusted 222,000.
The benchmark 10-year Treasury yield retreated from a fresh four-year high of 2.957%, hitting 2.918% Thursday afternoon.
Shares of Snap fell 6.1% after celebrity Kylie Jenner said she is no longer using the company’s social media app, Snapchat.

Stocks look to finish week on an upbeat note

Stocks look to finish week on an upbeat note

Themis Trading Partner and co-founder Joseph Saluzzi and Acceletrade CEO Abhishek Gupta discuss whether high-frequency trading, which allows for large trades in very short periods of time, is to blame for the wild market price swings.
Equity markets were trading higher Friday as the dollar slipped and Treasuries climbed, but the Dow Jones Industrial Average and the S&P 500 still appeared to be headed for a weekly loss.
Investors digested the Federal Reserve’s semi-annual monetary policy report to Congress this morning ahead of newly appointed chair Jerome Powell’s testimony to Congress next week.
The officials noted that the federal funds rate is likely to remain below long-term levels for some time, adding that the growth of labor compensation has been “moderate.” Investors were also monitoring new reading on U.S. jobs.
On Thursday, the Labor Department said the number of Americans filing for unemployment benefits dipped to near a 45-year low last week, falling 7,000 to a seasonally adjusted 222,000.
The Dow was up by triple digits on Friday, while the Nasdaq and S&P 500 were also higher.
In commodities, oil futures advanced, while gold slipped into negative territory.

Fed’s Quarles says gradual U.S. rate hikes ‘appropriate’

Fed’s Quarles says gradual U.S. rate hikes ‘appropriate’

One of the Federal Reserve’s newest policymakers on Thursday added his voice to the majority at the U.S. central bank calling for interest rate hikes amid rising business optimism and faster growth in the world’s biggest economy. “I anticipate further gradual increases in the policy rate will be appropriate to both sustain a healthy labor market and stabilize inflation around our 2 percent objective,” Fed Governor Randal Quarles said in remarks prepared for delivery to the Institute for International Monetary Affairs in Tokyo. “The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has been in since the crisis and, by many metrics, since well before the crisis,” he said.
Investors have all but priced in another rate increase at the central bank’s next meeting, on March 20-21, and Fed officials have signaled they expect to deliver two more rate hikes before the year is out.
Quarles’ comments underscore the general consensus at the central bank for a continuation under new Fed Chair Jerome Powell of the slow monetary policy tightening that was initiated by his predecessor, Janet Yellen.
Noting a rise in business optimism, an increase in business investment, a strengthening labor market and an accelerating pace of economic growth, Quarles said the underlying fundamentals of the U.S. economy are strong.
Although inflation continues to run below the Fed’s 2 percent target despite unemployment at a 17-year low of 4.1 percent, he said, “A deviation from our target of a few tenths of 1 percentage point, especially one I expect to fade, does not cause me great concern.
On top of it all, Quarles noted, the Trump administration’s newly passed $1.5 trillion tax overhaul, along with other fiscal measures, “could help sustain the economy’s momentum in part by increasing demand, and also possibly by boosting the potential capacity of the economy by encouraging investment and supporting labor force participation.”
Quarles, who started his job at the Fed in October, has previously focused most of his public comments on banking and other financial regulation.
(Reporting by Leika Kihara; Writing by Ann Saphir; Editing by Leslie Adler)

Brazil sinks deeper into junk debt status

Brazil sinks deeper into junk debt status

Latin America’s largest country had its debt downgraded deeper into junk territory on Friday by Fitch Ratings.
Ratings are important.
A low rating deters mainstream investors and attracts high-risk buyers, generally not the type governments want to recruit.
Political uncertainty, failure to reform the pension system, and large fiscal deficits triggered the decline, Fitch said in a statement.
Its recovery has been anemic.
And its presidential election this fall has been dogged by fears of a return to populism and complicated by a front-runner facing possible jail time.
Unemployment remains high at 11.8%.
Before the corruption-fueled recession, unemployment was near 6%.
More bad news arrived Wednesday when a nonprofit, Transparency International, severely lowered Brazil in its annual corruption rankings.
Brazil ranked 96th out of 180 countries.

Treasury secretary says we can get paid more and prices won’t rise. Well…

Treasury secretary says we can get paid more and prices won’t rise. Well…

“You can have wage inflation and not necessarily have inflation concerns in general,” Mnuchin told Bloomberg.
Wages and inflation are almost always linked at the hip.
The investments — known as capital expenditures — can help make workers more productive.
When workers’ productivity rises, wages go up too.
So, if a lot of companies use the new tax deduction to invest significantly in new equipment, offices and the like, productivity and wages could get a boost while inflation wouldn’t remain flat.
We’ve been riding one slowly rising wave the last eight years.
Why real life can’t be perfect Mnuchin’s argument hinges on businesses investing in their equipment, technology and facilities. “I’d argue that the corporate tax cuts will mostly boost dividends rather than investment,” says Paul Ashworth, chief US economist at Capital Economics, a research firm.
Only 14% of CEOs said in December that they would make immediate, capital investments stemming from the tax cuts, according to a Yale survey.
Productivity growth was 1.3% in 2017; 0% in 2016; 1.2% in 2015.