Finance News Archives - Page 37 of 74

June 3, 2022

Here comes the ‘good news is bad news’ jobs report: Morning Brief

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Friday, June 3, 2022

Today’s newsletter is by Myles Udland, senior markets editor at Yahoo Finance. Follow him on Twitter @MylesUdland and on LinkedIn.

The May jobs report will drop in a few hours — or will have dropped a few hours ago, depending on when you check your inbox — and investors will be watching closely.

But this report is also likely to usher in an updated version of some of the most convoluted market analysis that investors accept as normal — is “good news bad news” is “bad news good news” or is “good news good news”?

And although this framework sounds, in many ways, too clever by half, asking if “good news is bad news” is just another way to get at the question posed to investors by all jobs reports: What does this data mean for the Fed?

WASHINGTON, DC - MAY 31: U.S. President Joe Biden (C) meets with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office at the White House on May 31, 2022 in Washington, DC. The three met to discuss the Biden Administration's plan to combat record-high inflation. (Photo by Kevin Dietsch/Getty Images) — U.S. President Joe Biden (C) meets with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office at the White House on May 31, 2022 in Washington, DC.(Photo by Kevin Dietsch/Getty Images)

“Good news” in the case of the May jobs report would be another month of job gains rising more than expected by economists, wage growth remaining robust, and the unemployment rate falling further.

Data from Bloomberg show economists expect there were 323,000 jobs created last month with the unemployment rate expected to fall to 3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

So there’s your bogey on a report that counts as “good” or not.

But why would a “good” report be “bad news” for the market? Because another strong jobs report would likely keep the Fed’s future plans intact. And what’s more, a report that’s better than merely good could prompt the Fed to be even more aggressive in the coming months.

All of which means the table is set for a full summer of conversation about what economic data constitutes good news or bad news for investors.

The simplest way to describe the Fed’s policy stance right now is “tightening” — the central bank is raising the cost to borrow money in an effort to slow inflation. For financial assets like stocks and bonds, these tightening cycles are challenging. Just look at the stock market so far this year.

To tighten policy, the Federal Reserve is raising interest rates and beginning so-called “quantitative tightening,” which will see the Fed’s balance sheet shrink over time as some holdings mature.

And while inflation has many causes, part of what’s driving higher prices is a stronger labor market. By tightening financial conditions, Fed officials hope, in part, to slow the labor market.

In recent months, robust demand for labor from businesses has enabled more workers to command higher pay, and higher pay means more spending power for consumers. And more spending power has, in turn, meant upward pressure on prices, which has pushed the Fed to embark on aggressive moves to raise interest rates. Good news turning into bad.

Asked at a press conference last month whether the Fed believes it can slow hiring without tipping the economy into recession, Fed Chair Jay Powell said, “There’s a path.”

Powell added, among other things, that a measure he’d like to see moderate is the number of open jobs per unemployed worker; data out earlier this week showed a decline in the number of open jobs at the end of the April.

This need to slow the labor market was also echoed by President Joe Biden earlier this week. In an op-ed published in the Wall Street Journal on Tuesday, Biden wrote that if hiring slowed to 150,000 jobs per month from the current pace of 500,000 new jobs each month, “it will be a sign that we are successfully moving into the next phase of recovery — as this kind of job growth is consistent with a low unemployment rate and a healthy economy.”

Or, said differently, a return to an economy where good news for workers can be good news for investors.

What to Watch Today

Economy

8:30 a.m. ET: Change in Nonfarm Payrolls, May (323,000 expected, 428,000 during prior month)
8:30 a.m. ET: Change in Private Payrolls, May (302,000 expected, 406,000 during prior month)
8:30 a.m. ET: Change in Manufacturing Payrolls, May (39,000 expected, 55,000 during prior month)
8:30 a.m. ET: Unemployment Rate, May (3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 3.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)
8:30 a.m. ET: Average Hourly Earnings, month-over-month, May (0.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)
8:30 a.m. ET: Average Hourly Earnings, year-over-year, May (5.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 5.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} prior month)
8:30 a.m. ET: Average Weekly Hours All Employees, May (34.6 expected, 34.6 during prior month)
8:30 a.m. ET: Labor Force Participation Rate, May (62.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} expected, 62.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during prior month)
8:30 a.m. ET: Underemployment Rate, May (7.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} prior month)
9:45 a.m. ET: S&P Global Manufacturing PMI, May final (53.5 expected, 53.5 during prior month)
9:45 a.m. ET: S&P Global U.S. Composite PMI, May final (53.8 expected, 53.8 during prior month)
10:00 a.m. ET: ISM Services Index, May (56.5 expected, 57.1 during prior month)

Earnings

Pre-market

Post-market

Yahoo Finance Highlights

—

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

June 2, 2022

Stocks claw back in another volatile session

U.S. stocks rebounded in another choppy session Thursday after renewed concerns over the economy and a weak outlook from market bellwether Microsoft (MSFT) weighed on sentiment in earlier trading.

The S&P 500 jumped 0.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, climbing back from a lower open, while the Dow Jones Industrial Average hovered just above breakeven. The tech-heavy Nasdaq extended gains to 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as all three indexes attempt to bounce back from two straight days of losses.

Shares of Microsoft slipped 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} at open after the technology giant lowered its profit and revenue outlook, citing headwinds from from moves in foreign exchange rates, joining other companies that have recently reported grappling with challenging macroeconomic conditions.

Investors also weighed a bevy of employment data. The Labor Department’s latest weekly jobless claims report showed applications for unemployment insurance unexpectedly fell to 200,000 in a sign labor market conditions remain a bright spot in the economy amid mounting worries of a slowdown. On the other hand, job creation in the U.S. private sector dropped off sharply last month to the slowest pace of growth in the COVID-era recovery, according to ADP’s private payrolls report.

Oil prices retreated from a rally earlier this week following reports Saudi Arabia and other OPEC members may boost crude production to offset a sharp drop in Russia’s output under new sanctions by the European Union. West Texas Intermediate (WTI) and Brent crude oil futures each fell more than 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Thursday morning.

Wall Street weighed several quarterly reports in the early trade. Pet retailer Chewy (CHWY) saw shares pop more than 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} at open after the company reported a surprise profit following Wednesday’s closing bell. Hewlett-Packard Enterprise (HPE) added to a growing list of corporate names slashing forecasts over macroeconomic headwinds from supply chain disruptions, unfavorable currency movements and its exit from Russia. Shares fell roughly 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} at the start of trading.

More earnings are in store for traders through Friday from companies including Lululemon (LULU), RH (RH) and Okta (OKTA). With earnings season tailing off, investors will take their cue from economic data, with the labor market in focus.

On Wednesday, the April job openings report, also known as JOLTS, reflected a decline in the number of vacancies, a data point the Federal Reserve is likely to view positively as it works to cool the labor market. Manufacturing data from the Institute for Supply Management out Wednesday also pointed to resilience in the economy and suggested fears of downturn may be exaggerated.

The data coincided with market-moving comments from JPMorgan (JPM) CEO Jamie Dimon that signaled a grimmer outlook for the U.S. economic picture. At a conference Wednesday, the leader of the largest bank in the U.S. said the economy is facing a “hurricane” as the Federal Reserve moves forward with its monetary tightening plans.

“Are we going to slow down from a growth perspective? Yes, absolutely,” Cornerstone Wealth Group Chief Investment Officer Cliff Hodge told Yahoo Finance Live on Wednesday, commenting on Dimon’s remarks. “Are we going to fall into a recession? Eventually, but I think it is going to take longer to play out.”

In the last session, the Federal Reserve indicated in its periodic “Beige Book” that U.S. economic activity may have cooled in some parts of the country, weighed down by inflation, supply chain snafus and labor shortages.

“Worker shortages are still keeping labor markets tight and businesses understaffed,” LPL Financial Chief Economist Jeffrey Roach said in commentary. “In some districts, firms are freezing hirings, which is consistent with the decline in April job openings reported by the Bureau of Labor Statistics.”

—

9:30 a.m. ET: Stocks extend losses as weak guidance from Microsoft weighs on tech

Here were the main moves in markets as of 9:30 a.m. ET:

S&P 500 (^GSPC): -9.61 (-0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,091.62
Dow (^DJI): +7.78 (+0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,821.01
Nasdaq (^IXIC): -65.67 (-0.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,928.79
Crude (CL=F): -$1.33 (-1.15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $113.93 a barrel
Gold (GC=F): S$ettlement Date to $N/A per ounce
10-year Treasury (^TNX): -2.3 bps to yield 2.9080{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

9:18 a.m. ET: Another 200,000 Americans filed new claims last week

Applications for unemployment insurance unexpectedly fell in the latest weekly data suggesting labor market conditions remain a bright spot in the economy amid mounting worries of a slowdown.

The Labor Department’s latest weekly jobless claims report showed 200,000 claims were filed in the week ended May 28, coming in below the 210,000 economists surveyed by Bloomberg had expected.

Last week, the Labor Department’s weekly data raised concerns among investors that the labor market may be cooling as the Federal Reserve tightens financial conditions.

“Jobless claims were higher a couple weeks ago stoking some fears that the economy had suddenly hit a soft patch, but today’s data indicate that a storm is not brewing in the labor markets,” FWDBONDS Chief Economist Christopher Rupkey said in a note. “Quite the opposite, with the drop in the total number of people receiving unemployment compensation indicating the unemployment rate could drop in tomorrow’s monthly report to a new record low.

—

9:06 a.m. ET: US private payroll growth sees worst month since April 2020

Job creation in the U.S. private sector dropped off sharply last month to the slowest pace of growth in the COVID-era recovery, pointing to a cooldown in demand for labor amid a backdrop of rising interest rates and tighter financial conditions.

Private-sector payrolls grew by 128,000 in May, ADP said in its closely-watched monthly report on Thursday. This came following an increase of 202,000 jobs added in April, downwardly revised from 247,000 reported in the initial reading. Consensus economists were looking for private payrolls to rise by 300,000, according to Bloomberg data.

ADP’s monthly private jobs report comes ahead of the Labor Department’s official jobs report out Friday. While ADP’s report typically does not serve as a perfect indicator of what to expect in the government-issued data due to differences in survey methodology, the print has often served as a gauge of job growth that took place during a given period.

“Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,” said ADP Chief Economist Nela Richardson.”The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.”

—

7:12 a.m. ET: Stock futures jump, oil slips ahead of market open

Here’s where the major indexes were in pre-market trading Thursday:

S&P 500 futures (ES=F): +24.00 (+0.59{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,123.00
Dow futures (YM=F): +154.00 (+0.47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,952.00
Nasdaq futures (NQ=F): +95.00 (+0.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,646.00
Crude (CL=F): -3.23 (-2.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $112.03
Gold (GC=F): +$9.90 (+0.54{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,858.60 per ounce
10-year Treasury (^TNX): +8.00 bps to yield 2.931{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 20, 2022. REUTERS/Andrew Kelly

—

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

June 1, 2022

Elon Musk said working from home during the pandemic ‘tricked’ people into thinking they don’t need to work hard. He’s dead wrong, economists say.

Elon Musk at the 2022 Met Gala. — Elon Musk at the 2022 Fulfilled Gala.Andrew Kelly/Reuters

Elon Musk claimed COVID-19 “tricked persons into pondering that you will not essentially want to perform difficult.”
Doing the job from residence didn’t make workers fewer successful, a few economists informed Insider.
The only constraint on productivity was when personnel had children at dwelling they essential to seem right after.

Elon Musk is not a fan of remote perform.

In the early hrs of Wednesday, Musk commented on a tweet which appeared to be an e-mail from him to Tesla government employees, declaring: “Everyone who needs to do distant get the job done for a minimum amount (and I indicate *minimal*) of 40 hrs for every week or depart Tesla.”

Though Musk did not verify the authenticity of the electronic mail, when requested irrespective of whether these a rigid in-office environment policy could be considered antiquated by some, he replied: “They need to faux to get the job done someplace else.”

The tweets had been not totally out of the blue.

Musk earlier expressed distaste for American workers “attempting to prevent likely to get the job done at all” in a Could interview with The Economic Instances — even though he was contrasting them with employees in China, fairly than evaluating in-business and distant employees.

And he tweeted past month: “All the Covid remain-at-home things has tricked persons into considering that you really don’t basically have to have to get the job done really hard.”

Musk, who railed towards lockdown mandates and defied shelter-in-position orders to send out employees back to his California Tesla factory in May possibly 2020, may have the completely wrong plan about distant operate. Insider spoke to three economists, all of whom reported distant function throughout the pandemic did not harm worker productiveness.

“Most of the proof displays that productiveness has elevated when persons stayed at home,” Natacha Postel-Vinay, an economic and economical historian at the London Faculty of Economics, informed Insider.

“Folks spent a lot less time commuting so could use some of that time to operate, and they also got to expend extra time with their family members and sleeping, which intended they ended up happier and ended up far more productive,” she included.

Musk did not straight away reply when contacted by Insider outdoors of regular doing the job hrs.

Data shared with Bloomberg in February 2021 by VPN company NordVPN Groups recommended that in many economies, functioning from household intended people worked for a longer period hrs.

Albrecht Ritschl, an professor of economic record, also explained chopping out commuting was a bonus to worker efficiency, and included that operating from property led to less several hours used in “pointless meetings.”

“Time spent at the business is not the very same factor as doing work tough,” Ritschl claimed.

Almarina Gramozi, a lecturer in economics at King’s School London, mentioned the biggest surveys of personnel in the US and the British isles found personnel were being at minimum as effective at home as in the office environment — while she stated a identical research in Japan discovered staff did report reduced productivity doing the job from dwelling.

All three industry experts reported productiveness at times dipped in some scenarios, but not because individuals ended up shirking.

Individuals with youngsters at household through the pandemic typically had to split their notice involving do the job and childcare, leading to a minimize in efficiency, Postel-Vinay and Ritschl stated.

Gramozi also added productiveness isn’t just down to person employees.

“Productivity concentrations depend substantially on the support that businesses give, technology adoption, and on the kind of work that would let it to be effortlessly performed remotely,” she explained to Insider.

Read through the original article on Enterprise Insider

May 31, 2022

More signs that a major shift in the economic narrative could be underway

This post was originally published on Tker.co.

There’s more evidence that the economic narrative could be undergoing a major shift.

For months, we’ve been living in an economy in which strong demand has been met with lagging supply, causing inflation inflation to surge. We now appear to be shifting to a phase where demand growth is cooling and supply chains are easing, which should cause inflation to come down.

According to Census Bureau data released Wednesday, orders for nondefense capital goods excluding aircraft — a.k.a. core capex or business investment — climbed 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to a record $73.1 billion in April.

While the 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} growth rate represents a deceleration from the 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rate in March, it’s the kind of slowing that’s welcome news for folks like the Federal Reserve, which is actively working to cool economic growth in its effort to bring down inflation.

“That is consistent with our view that economic activity is bending rather than breaking under the impact of higher rates,” Michael Pearce, senior U.S. economist for Capital Economics, said in a note on Wednesday.

Core capex growth represents a massive economic tailwind. And the fact that it continues to grow, albeit at a decelerating pace, is a good sign for economy-wide growth.

According to S&P Global Flash US Manufacturing PMI report released on Wednesday, these emerging economic trends have continued into May. Specifically, the composite output index fell to a four-month low of 53.8 in May. For this index, any reading above 50 signals growth, and so the declining number suggests growth is decelerating.

“Growth has slowed since peaking in March, most notably in the service sector, as pent up demand following the reopening of the economy after the Omicron wave shows signs of waning,” Chris Williamson, chief business economist at S&P Global Market Intelligence, wrote on Wednesday.

Consumer spending growth cools as excess savings get tapped

Growth appears to be cooling on the consumer front too.

According to a BEA report released Friday, personal consumption expenditures (i.e., consumer spending) increased by 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April from the prior month to new record levels. However, this was a healthy deceleration from March’s 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} growth rate.

The spending came as the saving rate (i.e., the difference between income and spending) fell to its lowest level since September 2008.

While this development on its own is unsettling, it comes after consumers spent over two years accumulating over $2 trillion in excess savings.

“It looks like households have been eating into the ‘excess saving’ that was built up at earlier stages of the pandemic in order to fuel consumer spending in recent months,” Daniel Silver, economist at JPMorgan, wrote in a note on Friday.

As we’ve discussed frequently on TKer, these excess savings represent a massive economic tailwind. For a while, you could argue that it was exacerbating inflation. But now it appears to be bolstering spending as the economy slows.

News of a slowdown is not exactly the kind of thing that warrants a celebratory tone. But it’s exactly the kind of thing that should help bring inflation down.

More signs that supply chains are easing

S&P’s PMI report also suggested there could be some daylight in the disrupted supply chains.

“Manufacturers in particular also report that capacity continues to be constrained by supply shortages, though these bottlenecks showed further encouraging signs of easing,“ S&P’s Williamson said (emphasis added).

It’s also been a while since we’ve heard about ships idling outside of ports waiting to be unloaded.

“U.S. port data suggest easing backlogs,” JPMorgan economists wrote last week. “Notable examples are the ports of Los Angeles and Long Beach, which process about 40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of total imports into the US.”

And it’s not just ocean freight that’s loosened. Trucking freight seems to be loosening too.

According to BofA’s Truck Shipper Survey for the week ending May 19, “shippers find it much easier to secure capacity (its highest level since June 2020).“

Unfortunately, at least some of these signs of loosening supply chains can be explained by easing demand for goods. But again, this is the dynamic that should make for easing inflation.

More signs that the labor market is cooling

Bloomberg reported that tech behemoth Microsoft was slowing hiring in its Windows, Office, and Teams businesses.

PayPal laid off 83 employees at its headquarters in San Jose.

These are anecdotes. But the developments are in line with the Fed’s aim of cooling inflation by first cooling the labor market.

Subscribe now

Signs that inflation peaked

Last month, I wrote about how economists across the board were saying that inflation — as measured by year-over-year increases in prices — had peaked.

On Friday, we got more evidence to confirm that may be the case.

The core PCE price index — the Fed’s preferred measure of inflation — climbed 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April from a year ago. This is down from the 5.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} rate in March and the 5.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} peak rate in February.

On a month-over-month basis, the core PCE price index has climbed by a cool 0.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} over the past three months.

It’s still too early to claim victory on inflation

“Many have touted March as the peak in inflation and are looking for inflation to cool from here,” Grant Thornton Chief Economist Diane Swonk said on Friday.. “We are not as convinced given the risks we still face due to the war in Ukraine and lockdowns in China. Either way, it is important to note that any cooling we see will have a high floor. Both the overall and core PCE indices remain well above the Federal Reserve’s 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} target.”

Indeed, inflation has a long way to go to get to 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from 4.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

And so, we’ll have to keep an eye on the incoming data to see if a major shift in the economic narrative is indeed underway.

—

More from TKer:

Rearview 🪞

📈 Stocks surge, ending 7-week losing streak: The S&P 500 rallied 6.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} last week, ending a seven-week losing streak. It was the biggest one-week gain since November 2020. The index is now down 13.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its January 3 closing high of 4796.56, but 6.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} above its May 19 closing low of 3,900.79. For more on market volatility, read this and this. If you wanna read up on bear markets, read this.

💰 Corporate insiders are buying their companies’ stock: From JPMorgan: “…corporate insiders are holding a non-consensus view across most sectors and actively buying the dip with net insider buying activity reaching 1STDev above trend level.“

📈 Mortgage rates are still high, but tick down: The average rate for the 30-year fixed rate mortgage declined to 5.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from 5.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} the week prior. Here’s Freddie Mac: “Mortgage rates decreased for the second week in a row due to multiple headwinds facing the economy. Despite the recent moderation in rates, the housing market has clearly slowed, and the deceleration is spreading to other segments of the economy, such as consumer spending on durable goods.“

🏡 New home sales slump: Sales of newly built homes fell 16.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} month-over-month to an annual rate of 591,000 units, according to Census Bureau data.

😤 Consumer sentiment tumbles: The University of Michigan’s index of consumer sentiment fell to 58.4 in May, its lowest level since August 2011. From the survey: “This recent drop was largely driven by continued negative views on current buying conditions for houses and durables, as well as consumers’ future outlook for the economy, primarily due to concerns over inflation.“

Keep in mind that deteriorating sentiment hasn’t come with a decline in spending in recent months. For more on sentiment, read this.

🛫 People are doing stuff: From Yahoo Finance’s Emily McCormick: “On Thursday, both Southwest Airlines and JetBlue raised their quarterly guidance, citing strong demand heading into the critical summer travel season. Both upward revisions came just weeks after the companies initially reported their forecasts last month.“

This follows a similar announcement from United Airlines last week. Altogether, it’s apparent that people are refusing to put their lives on hold.

Up the road 🛣

It’s jobs week in America. Wednesday comes with the April Job Openings & Labor Turnover Survey and Friday comes with the April employment report. Employment growth has been very strong and record-high job openings have enabled workers to earning higher wages.

However, there are nearly two job openings per unemployed. This good news is being blamed for high inflation, which is bad, which is what the Fed is aiming to address with tighter monetary policy.

U.S. financial markets will be closed on Monday for Memorial Day.

Sam Ro is the founder of Tker.com. Follow him on Twitter at @SamRo.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTub

May 30, 2022

A researcher’s avatar was sexually assaulted on a metaverse platform owned by Meta, making her the latest victim of sexual abuse on Meta’s platforms, watchdog says

Meta CEO, Mark Zuckerberg. — Meta CEO Mark Zuckerberg.Drew Angerer/Getty Illustrations or photos

A nonprofit advocacy team suggests a researcher’s avatar was raped in the metaverse.
Other Meta consumers have also claimed they were being sexually harassed or abused in the metaverse.
Meta investors desired a report on harms struggling with metaverse buyers, but shareholders turned down the plan.

A researcher entered the metaverse wanting to research users’ behavior on Meta’s social-networking platform Horizon Environment. But within just an hour immediately after she donned her Oculus digital-reality headset, she says, her avatar was raped in the virtual area.

“Metaverse: yet another cesspool of harmful articles,” a new report published by the nonprofit advocacy team SumOfUs on Tuesday, specifics the researcher’s violent experience in Meta’s Horizon Earth.

In accordance to SumOfUs’ account, users invited the researcher to a private party on Horizon Environment earlier this month. Consumers in the identical space then asked her to disable a setting that prevented other folks from receiving within just 4 ft of her.

The report connected to a video that the group claims reveals what took place to the researcher’s avatar from her standpoint. In the video, a male avatar is observed acquiring extremely near to her, though an additional male avatar stands close by, watching. A bottle of what appears to be alcoholic beverages is then handed involving the two avatars, for each the 28-next video. Two male voices are read making lewd feedback in the video clip.

In a part of the online video SumOfUs opted not to share but describe, the researcher “was led into a personal home at a social gathering wherever she was raped by a user who saved telling her to turn close to so he could do it from powering when end users outside the window could see — all although another consumer in the home viewed and handed close to a vodka bottle,” per the report.

Even though it took place in virtual fact, the incident still left the researcher “disoriented,” she mentioned in the report. The researcher noted her controller vibrated when the male avatars touched her, ensuing in a bodily sensation that was a end result of what she was going through on line.

“One part of my mind was like WTF is going on, the other component was like this is not a actual human body, and a further aspect was like, this is important investigation,” she stated in the report.

SumOfUs researchers also noted dealing with homophobic and racial slurs in Horizon World and said they witnessed gun violence on the system.

Meta introduced Horizon Worlds in December to end users 18 and up in the US and Canada. By February, there were being at the very least 300,000 buyers on the platform, in accordance to The Verge.

Four other buyers also a short while ago explained their avatars were being sexually assaulted or harassed in Horizon Globe and other Meta VR platforms, in accordance to the SumOfUs report.

In November, a beta tester documented that her avatar experienced been groped in Horizon Worlds.

At the time, a Meta agent, Kristina Milian, told MIT Technology Evaluate that people really should have “a favourable experience with protection tools that are straightforward to come across — and it’s in no way a user’s fault if they never use all the attributes we supply.” She continued: “We will continue on to boost our UI and to improved fully grasp how people use our applications so that customers are able to report items conveniently and reliably. Our target is to make Horizon Worlds safe, and we are fully commited to carrying out that get the job done.”

But the up coming month, a metaverse researcher named Nina Jane Patel said in a put up on Medium that in 60 seconds following she joined Horizon Worlds, a few to 4 male-seeking avatars gang-raped her avatar.

That exact month, The New York Moments described that a woman player’s avatar was groped on a Meta-owned shooter video game. Individually, a participant on the sports activities match Echo VR mentioned a male participant told her he experienced recorded her voice so he could “jerk off” to her cursing.

SumOfUs and Meta didn’t straight away reply to Insider’s requests for responses. In reaction to the SumOfUs report, a Meta consultant instructed the Every day Mail it didn’t advocate “turning off the safety element with people you do not know.”

At the very least 2 significant metaverse traders expressed worry in excess of rising aspects of harassment and abuse on its metaverse platforms

Meta has staked its potential on making its immersive metaverse virtual actuality. It plowed $10 billion into coming up with the metaverse. CEO Mark Zuckerberg is playing the lengthy sport with his expense, lately expressing the project could keep on to eliminate cash for three to five several years, Insider claimed.

At minimum two significant Meta investors, having said that, ended up alarmed by rising specifics of harassment and abuse on its metaverse platforms.

In December, the buyers Arjuna Funds and Storebrand Asset Administration, alongside one another with SumOfUs and several other advocacy businesses, co-submitted a motion demanding that Meta publish a report analyzing any harms buyers could facial area on its metaverse platforms, they claimed in a push release.

“Investors will need to recognize the scope of these potential harms, and weigh in on regardless of whether or not this is a great idea right before we throw great money just after bad,” Arjuna Capital’s running associate Natasha Lamb reported in the release.

At Meta’s Wednesday shareholder assembly, a proposal was released to comprehensive a 3rd-get together evaluation of “likely psychological and civil and human rights harms to people that may perhaps be caused by the use and abuse of the platform” and “no matter whether harms can be mitigated or prevented, or are unavoidable pitfalls inherent in the technological know-how.”

Nonetheless, the proposal was voted down.

Before this month, Nick Clegg, the president for world wide affairs at Meta Platforms, reported in a website article that “the regulations and basic safety characteristics of the metaverse — regardless of the flooring — will not be equivalent to the types at present in area for social media” and “nor need to they be.”

But, he ongoing: “In the actual physical planet, as well as the web, persons shout and swear and do all kinds of uncomfortable points that are not prohibited by law, and they harass and assault people in methods that are. The metaverse will be no diverse. Persons who want to misuse systems will usually obtain techniques to do it.”

Read the unique report on Organization Insider

May 28, 2022

This week in Bidenomics: Debt bomb

President Biden is very pleased of the declining budget deficit less than his check out. But blessed timing will convert versus him if he operates for a second time period in 2024.

The Congressional Funds Workplace up-to-date its 10-year spending budget outlook on May 25, and the limited-time period news is encouraging. The federal spending budget deficit will fall from $2.8 trillion in 2021 to all-around $1 trillion this calendar year, and to a little bit significantly less in 2023. That’s a far better forecast than CBO’s 2021 outlook. The advancement reflects a sharp boost in governing administration tax earnings ensuing from a robust restoration from the COVID economic downturn of 2020. Authorities paying is also down sharply this calendar year as the ultimate batch of COVIID stimulus, handed last 12 months, runs out.

The for a longer time-expression outlook is quite terrible, having said that. All the structural difficulties with the U.S. fiscal predicament remain. Paying on Medicare, Social Security and other “entitlement” courses will carry on to rise as a proportion of federal outlays, as the inhabitants ages and overall health treatment costs continue to rise. That will depart a shrinking portion of dollars for “discretionary” investing on infrastructure, transportation, assist programs and numerous other matters, such as protection, even with the infrastructure regulation Congress passed very last 12 months.

The most ominous alter is ballooning federal outlays on fascination payments, provided that inflation is substantially increased than it was past year and desire costs are soaring as a consequence. Web curiosity payments in 2021 ended up $352 billion, or a workable 5.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of all outlays. By 2032, CBO expects net interest payments to triple to $1.2 trillion, which would be 13.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of all outlays. That’s income the Treasury will be paying out to bondholders just for the right to borrow. It won’t finance just about anything for taxpayers and will leave even much less funds for other applications.

WASHINGTON, DC - MAY 04: U.S. President Joe Biden speaks during an event at the Roosevelt Room of the White House on May 4, 2022 in Washington, DC. President Biden delivered remarks on economic growth, jobs, and deficit reduction. (Photo by Alex Wong/Getty Images) — WASHINGTON, DC – May 04: U.S. President Joe Biden speaks throughout an occasion at the Roosevelt Room of the White Household on Might 4, 2022 in Washington, DC. President Biden delivered remarks on financial advancement, work, and deficit reduction. (Picture by Alex Wong/Getty Photographs)

Financial debt analysts have warned for many years that the U.S. spending plan imbalance is unsustainable, but many predictions of disaster haven’t took place (but). In idea, a financial debt crisis could take place if buyers buying Treasury securities, which finance the government’s financial debt, start out to believe the United States is in above its head, and demand greater desire fees for what they perceive as a increasing risk of acquiring Treasuries. That could induce a debt spiral in which borrowing expenditures increase further, leaving Washington shorter of dollars for significant functions.

[Follow Rick Newman on Twitter, sign up for his newsletter or send in your thoughts.]

There are remedies. If the government had to, it could either slash spending or increase taxes to slender a personal debt gap that received as well significant. But that would most likely bring about a recession, and possibly a lousy one. Congress normally gives trillions of dollars in deficit-financed support all through recessions, but if it is a economic downturn triggered by a credit card debt disaster, Congress might not be able to do that.

But never fear! Nothing at all like this has occurred still because the world-wide need for Treasuries seems to be bottomless, and buyers really don’t look to have any anxieties at all about Washington repaying its money owed. The United States has a person substantial point likely for it, which is that the dollar is the world’s favourite currency, which would make greenback-denominated U.S. debt supreme to most other kinds.

A time bomb

But if the CBO forecasts are in the ballpark, the magnitude of those curiosity payments is going to come to be a large political problem, at a bare minimum. The mushrooming nationwide debt, now $30.4 trillion, is the ultimate boiling frog, an incrementally worsening time bomb that nobody would like to deal with today but most people will have to deal with if or when it blows. Nobody is aware when the stress to do some thing will come to be irresistible, but it’s tough to imagine deficits and the all round financial debt can improve indefinitely, as a portion of the financial state, with no requiring fiscal or political intervention.

In CBO’s forecast, web curiosity payments will equal the quantity used on protection in 2029, and they will be 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} additional than the defense funds by 2032. Web interest payments would be 51{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} extra than Medicaid paying out in 2032, and roughly equivalent to all non-protection discretionary shelling out. This appears to be, I never know … ridiculous? Could we truly invest additional on fascination payments than we do on the Pentagon every single year?

Director of the Office of Management and Budget Shalanda Young listens to U.S. Senator Bernie Sanders (I-VT) speak during a U.S. Senate Budget Committee hearing about U.S. President Joe Biden's budget plan for fiscal year 2023, on Capitol Hill in Washington, U.S., March 30, 2022. REUTERS/Elizabeth Frantz — Director of the Office of Administration and Spending budget Shalanda Younger listens to U.S. Senator Bernie Sanders (I-VT) speak through a U.S. Senate Spending plan Committee listening to about U.S. President Joe Biden’s spending budget approach for fiscal yr 2023, on Capitol Hill in Washington, U.S., March 30, 2022. REUTERS/Elizabeth Frantz

Biden has individually taken credit history for the massive drop in paying out this calendar year, and the stark improvement in the annual deficit, contacting it “the biggest decrease in a one 12 months in American history.” His spending budget director, Shalanda Young, hailed the May perhaps 25 CBO report as evidence of a “strong economic recovery, powered by President Biden’s financial and vaccination insurance policies.” Meh. Spending budget authorities say the increasing deficit is virtually totally owing to the finish of fiscal stimulus handed in 2020 and 2021, some less than Trump and the rest below Biden.

The deficit matters, even now, due to the fact Democratic Sen. Joe Manchin of West Virginia is insisting on some type of deficit reduction if there is ever heading to be a revival of Biden’s “build back better” laws, which died late previous year when Manchin reported he could not vote for it. Democrats have promised a streamlined edition, but that was supposedly because of by Memorial Working day, and BBB lite is nowhere to be noticed. Still Manchin still suggests a climate, energy and deficit-reduction bill could pass this calendar year, with every single Democratic vote in the Senate. Biden, dogged by inflation and a gloomy countrywide mood, could definitely use the earn, even if it is a shadow of the invoice Biden preferred initially.

Biden could possibly get a different calendar year or so to crow about falling deficits. But the mid 2020s are shaping up as crunch time for the expending-revenue mismatch. Medicare is most likely to begin operating quick of money in the subsequent handful of years, requiring much more funding, reward cuts or a mixture of equally. And the increased desire fees go, the sooner federal interest payments will gobble up taxpayer funding. No president needs to have to deal with the finances mismatch, but the following president may perhaps be the a person who has no other alternative.

Rick Newman is the author of 4 books, which include “Rebounders: How Winners Pivot from Setback to Accomplishment.” Stick to him on Twitter: @rickjnewman.

Go through the most current money and small business information from Yahoo Finance

Observe Yahoo Finance on Twitter, Instagram, YouTube, Fb, Flipboard, and LinkedIn