Unemployment

Stock selling may continue on interest rate hike concerns
Unemployment

Stock selling may continue on interest rate hike concerns

Capitalistpig hedge fund manager Jonathan Hoenig and Point View Wealth Management managing director John Petrides discuss what caused the Dow to nose dive.
Concerns about a possible quicker pace to interest rate increases put stocks into a down draft that continued into Thursday.
The S&P 500 fell 0.14% and the Nasdaq Composite was off 0.43%.
“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,” said Fed Governor Randal Quarles overnight 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.”
The Dow surged more than 300 points after the release of the Fed’s minutes from the January meeting, but the drop in equities late in Wednesday’s session coincided with a spike in the benchmark 10-year Treasury yield, which hit a new four-year high of 2.957%.
Yields rise as bond prices fall.
The Dow Jones Industrial Average fell 166.97 points, or 0.67%, to 24,797.78.
The Nasdaq Composite retrested 16.08 points, or 0.22%, to 7,218.23.
“What I do not want to see is the market retesting the lows from the bounce back day of that horrible week on 2/9,” said Melissa Armo of The Stock Swoosh.
The Shanghai Composite index was up 69.57 points or 2.17 percent at 3,268.73, its best single-day gain since August 2016.

US jobless claims unexpectedly drop to near 45-year low
Unemployment

US jobless claims unexpectedly drop to near 45-year low

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly fell last week, dropping to its lowest level in nearly 45 years as the labor market tightened further, bolstering expectations of faster wage growth this year.
That is the longest such stretch since 1970, when the labor market was much smaller.
The Labor Department reported last week that average hourly earnings jumped 2.9 percent year-on-year in January, the largest gain since June 2009, after advancing 2.7 percent in December.
Strong wage growth supports optimism among Federal Reserve officials that inflation will increase toward the U.S. central bank’s 2 percent target this year.
U.S. financial markets expect the Fed will raise interest rates in March.
The Fed has forecast three rate increases for this year, but much will depend on the inflation outlook and financial conditions.
U.S. financial markets were little moved by the claims data.
The Labor Department said claims for Maine were estimated last week.
Last week, the four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, declined 10,000 to 224,500, the lowest level since March 1973.
The claims report also showed the number of people receiving benefits after an initial week of aid fell 33,000 to 1.92 million in the week ended Jan. 27.

US jobless claims drop to near 45-year low
Unemployment

US jobless claims drop to near 45-year low

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits fell to a near 45-year low last week, pointing to strong job growth in February, which should continue to underpin the economy.
Initial claims for state unemployment benefits dropped 7,000 to a seasonally adjusted 222,000 for the week ended Feb. 17, the Labor Department said on Thursday.
While that probably distorted last week’s data, the underlying trend in claims was consistent with a robust labor market. “Firms are extraordinarily unwilling to part company with workers reflecting, in all likelihood, the difficulty of replacing them,” said John Ryding, chief economist at RDQ Economics in New York.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,250 to 226,000 last week.
The four-week average of claims dropped 17,500 between the January and February survey weeks, suggesting solid job growth this month.
Payrolls increased by 200,000 jobs in January.
Strong employment gains in February would seal the case for an interest rate increase next month.
The Fed has forecast three rate increases this year.
The four-week moving average of the so-called continuing claims fell 16,250 to 1.93 million.

Stocks open higher, Treasuries climbing
Unemployment

Stocks open higher, Treasuries climbing

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 opened higher Friday as the U.S. dollar slipped and Treasuries climbed, but the Dow Jones Industrial Index and the S&P 500 still appeared to be headed for a weekly loss.
Investors were waiting for the Federal Reserve to release its monetary policy report and also digested a new reading on U.S. jobs.
The Labor Department on Thursday 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 Dow Jones Industrial Average surged 158.02 points, or 0.63%, to 25,120.48.
“The FTSE has drifted lower in early trade this morning, with the positivity exhibited in Asian markets doing little to boost confidence in European markets,” said Joshua Mahony, Market Analyst at IG.
In China, the Shanghai Composite Index gained 0.6 percent to 3,289.02 in a holiday shortened week and has rebounded over 7 percent from a low hit on Feb. 9.
Hong Kong stocks rose on Friday, capping a holiday-shortened trading week, rising 1.0 percent, to 31,267.17.
Oil prices dipped lower on Friday as concerns about high U.S. crude exports topped the drop in oil inventories.
U.S. West Texas Intermediate (WTI) crude futures were at $62.74 a barrel.

Fed report reflects mysteries over its core mandate: the jobs market and prices
Unemployment

Fed report reflects mysteries over its core mandate: the jobs market and prices

Steve The cautious outlook the Federal Reserve delivered on Friday in its monetary policy report reflects uncertainty the central bank has over its core mandates: stable prices and full employment.
The Fed devoted two of its four sidebars in the report to exploring how tight the labor market is and why global inflation is so low.
That the Fed raised as many questions as delivered answers shows the predicament it’s in.
After years of decline, the labor market participation rate has stabilized, in further good news.
Surveys of job openings at small businesses as well as household perceptions about job availability also fit the notion of a tight labor market.
Onto the mysteries — why then are companies still steadily hiring workers?
And there still are disparities across racial, ethnic and regional lines, the Fed notes.
Onto inflation – why has it been so low across the industrialized world?
Sure, but if that’s the case, why are profit margins so high?
But so far, there hasn’t been much evidence that global slack can help explain inflation in a given country, the Fed report says.

US jobless claims unexpectedly fall as job market strengthens
Unemployment

US jobless claims unexpectedly fall as job market strengthens

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to a tightening labor market and strengthening economy at the start of the year.
Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 230,000 for the week ended Jan. 27, the Labor Department said on Thursday.
It also said claims-taking procedures in Puerto Rico and the Virgin Islands had still not returned to normal months after the territories were slammed by Hurricanes Irma and Maria.
Last week marked the 152nd straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market.
The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent.
The Fed has forecast three rate increases for this year after lifting borrowing costs three times in 2017.
The claims data has no bearing on January’s employment report, which is scheduled to be released on Friday, as it falls outside the survey period.
According to a Reuters survey of economists, nonfarm payrolls probably rose by 180,000 jobs in January after increasing by 148,000 in December.
The claims report also showed the number of people receiving benefits after an initial week of aid increased 13,000 to 1.95 million in the week ended Jan. 20.
The four-week moving average of the so-called continuing claims rose 12,000 to 1.93 million.

Jeffrey Gundlach trolls Treasury’s Mnuchin about wage inflation in tweetstorm
Unemployment

Jeffrey Gundlach trolls Treasury’s Mnuchin about wage inflation in tweetstorm

‘Mnuchin: policies will raise wages w/out inflation.
Yeah, sure.
In a follow-up tweet, Gundlach went on to say that if “by miracle” wages can rise without inflation, that will be negative for corporate profits.
The yield on the 10-year Treasury note TMUBMUSD10Y, -0.94% broke out to a four-year high when the wage data hit Feb. 2 and has been darting back and forth near those highs since.
Stock markets cheered Thursday as jobless claims came in at a 45-year low, and the unemployment rate remains at a 17-year low of 4.1%.
Hence, companies may have to offer better pay to lure new employees.
In another tweet, Gundlach passed comment on how the so-called fear index, otherwise known as the CBOE Volatility Index VIX, -1.39% , still can’t get back to the lows seen when the “nutty ‘melt-up’ narrative” was dominating stocks.
Big snap back off SPX 200 day MA but VIX can’t get close to lows of the nutty “melt up” narrative.
Rising interest rates, bro!
— Jeffrey Gundlach (@TruthGundlach) February 23, 2018 Gundlach has been making bearish calls on the stock market for the past year.

Running the economy hot
Unemployment

Running the economy hot

By stimulating economic activity when times are already good, it will find out what happens when the economy runs hot.
After the financial crisis, when unemployment rose to 10% but inflation failed to subside, some economists speculated that the natural rate was as high as 6.5%.
Get our daily newsletter It is also possible that pushing down against the natural rate of unemployment causes it to fall.
Americans of working age are still participating in the labour force at a lower rate than before the recession, and productivity growth has been notoriously weak since the financial crisis.
If, in a hot economy, rising wages entice more people to seek work, and spur firms to invest in, say, labour-saving artificial intelligence, then unemployment should be able to fall further without sparking inflation.
The relationship between unemployment and price rises has been so weak in recent years that hawks fear that if inflation overshoots the Fed’s target, it could take a deep recession to bring it back down.
That would allow the Fed to set higher policy rates without harming growth.
As a result, when the next recession comes, the Fed would have more room to cut rates before they run up against their lower bound, near zero.
Running the economy hot now might make it easier to keep it warm later on.
See also: “What will result from America’s strangely timed fiscal stimulus?” and our Economics Brief on “The natural rate of unemployment”

How does KFC run out of chicken?
Unemployment

How does KFC run out of chicken?

It was a massive win for DHL: Britain is KFC’s largest market in Europe, and one of its top five globally.
For its part, DHL promised to set “a new benchmark for delivering fresh products to KFC.”
(The service, not the chicken.)
I guess we finally know why the chicken crossed the road: Because KFC was closed.
But investors will be closely watching Fed Chairman Jerome Powell’s first appearance on Capitol Hill next week and the Fed’s March meeting for clues about whether even faster interest-rate hikes are in the works.
It’s supposedly backed by Venezuela’s vast oil reserves, although petro investors don’t get an ownership stake in the state-run oil company or the oil itself.
The United States has warned investors that buying the petro could violate sanctions.
The rise in the jobless rate surprised economists, and the pound dropped as investors wondered whether the data could delay the next increase in interest rates.
More than a year into Trump’s presidency, the coal industry is deeply pessimistic about a comeback.
Just about every smartphone company not named Apple (AAPL) will be there.

Where you sit at the office could influence your next promotion and public colleges are becoming less public
Unemployment

Where you sit at the office could influence your next promotion and public colleges are becoming less public

Happy Thursday, MarketWatchers!
Here are your top personal finance stories of the day.
Personal Finance Amazon Prime card has the same pitfalls as every other brick-and-mortar store card Public colleges are becoming less public, fueling inequality 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 wonders how he can get this money back.
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.
From blade-sharpening to ballet — the cost of being an Olympic figure skater Skates alone can cost $2,000 with new blades — and they’re usually replaced annually.
ALS patient group unhappy with how $115 million raised by the Ice Bucket Challenge is being spent Individuals with ALS say they aren’t benefiting from the Ice Bucket Challenge donations that poured into the nonprofit ALS Association.
‘I’ve prayed for God to help me with my financial problems’ — Billy Graham answered his letter (if not his prayers) The evangelist, who died Wednesday, answered one follower’s question about money troubles and the Powerball.
My secret tax weapon costs 99 cents Where you sit at the office could influence your next promotion The depressing reason most Americans are making more money As they go without wage increases, this is what Americans are doing to earn more money.
The NRA’s mantra, “The only thing that stops a bad guy with a gun is a good guy with a gun,” has resurfaced this week in the aftermath of the Parkland shootings, fueled by President Trump’s backing of the idea to arm teachers.