Confidence among American businesses operating in China reached an all-time low as unrelenting geopolitical tensions and a further weakening Chinese economy made times tough for foreign firms operating there as explained in a CNBC report.<o:p></o:p>

Only 66 per cent of 306 member firms surveyed reported profitability for 2023, the lowest rate ever recorded, according to today's report from the American Chamber of Commerce in Shanghai.

Results reflect a sudden contraction in some of the measures of fundamental confidence, as only 47 per cent of the respondents have expressed optimism concerning five-year business prospects in China. It also found a record 25 per cent of companies saying they planned to decrease investment in the country over the last year.

<o:p>Reasons for the decline in investments</o:p>

The cited main reasons for the decline in investment are the poor performance of China's economy. The report said tense relations between Washington and Beijing, combined with geopolitical uncertainties, remain the key challenges to operations alongside the overall economic environment in China. "Rising geopolitical tensions, in particular with looming elections in the United States amid increasingly contentious trade disputes, aside from China's slowing economy, are forcing firms to expand risk management and adjust investment plans correspondingly," the chamber said.<o:p></o:p>

In a separate report, the US China Business Council explained that problems with China's economy came second in a list of urgent concerns of American companies this summer, after the relations between the US and China. Issues of weak domestic demand and resulting overcapacity have hurt profitability, which, in turn, is inducing pessimism in the medium-term outlook of businesses. Besides, companies are giving up market share to Chinese competitors who enjoy more significant government support.<o:p></o:p>

But these are not the only issues for American companies, and there is also strong pressure on European businesses. One report from the EU Chamber of Commerce in China showed that its members are reaching a "tipping point" on further investments in the country due to slim profit margins and bleak forecasts. The organization called on Beijing to act now if it wants more foreign investment.<o:p></o:p>

This year's data shows that while a lot of positive policies have been introduced, they have not restored confidence yet among enterprises or consumers overall," said Allan Gabor, Chair of AmCham Shanghai. Yuan, Markets Leader at PwC China, added, "While facing increasingly bigger economic challenges and intense competition, it is crucial to foreign companies' global competitiveness to maintain business in China."<o:p></o:p>

In the face of such difficulties, some 45 per cent of the AmCham respondents favored a tariff reduction on Chinese imports as one possible step for US government support. China's Ministry of Commerce said earlier that foreign direct investment had declined 29 per cent in the first seven months of this year from the same period last year.<o:p></o:p>

Thus, with the acceleration of such trends, it will be a turn for American firms to operate in this more difficult environment, carrying immense economic and political challenges. The need for adaptation thus will be greater because firms are looking at their strategies and risks in view of changes in economic circumstances in China.

That fact underlined the importance of full understanding market dynamics and possible ways of engagement. While this is the view held by many experts, it calls for clearer risk management and government relations strategies that allow the sustenance of operations in the region.<o:p></o:p>

<o:p>&nbsp;</o:p>

<o:p>&nbsp;</o:p>

<o:p>&nbsp;</o:p>

Confidence among American businesses operating in China reached an all-time low as unrelenting geopolitical tensions and a further weakening Chinese economy made times tough for foreign firms operating there as explained in a CNBC report.

Confidence among American businesses operating in China reached an all-time low as unrelenting geopolitical tensions and a further weakening Chinese economy made times tough for foreign firms operating there as explained in a CNBC report. Only 66 per cent of 306 member firms surveyed reported profitability for 2023, the lowest rate ever recorded, according to today's report from the American Chamber of Commerce in Shanghai. Results reflect a sudden contraction in some of the measures of fundamental confidence, as only 47 per cent of the respondents have expressed optimism concerning five-year business prospects in China. It also found a record 25 per cent of companies saying they planned to decrease investment in the country over the last year. Reasons for the decline in investments The cited main reasons for the decline in investment are the poor performance of China's economy. The report said tense relations between Washington and Beijing, combined with geopolitical uncertainties, remain the key challenges to operations alongside the overall economic environment in China. "Rising geopolitical tensions, in particular with looming elections in the United States amid increasingly contentious trade disputes, aside from China's slowing economy, are forcing firms to expand risk management and adjust investment plans correspondingly," the chamber said. In a separate report, the US China Business Council explained that problems with China's economy came second in a list of urgent concerns of American companies this summer, after the relations between the US and China. Issues of weak domestic demand and resulting overcapacity have hurt profitability, which, in turn, is inducing pessimism in the medium-term outlook of businesses. Besides, companies are giving up market share to Chinese competitors who enjoy more significant government support. But these are not the only issues for American companies, and there is also strong pressure on European businesses. One report from the EU Chamber of Commerce in China showed that its members are reaching a "tipping point" on further investments in the country due to slim profit margins and bleak forecasts. The organization called on Beijing to act now if it wants more foreign investment. This year's data shows that while a lot of positive policies have been introduced, they have not restored confidence yet among enterprises or consumers overall," said Allan Gabor, Chair of AmCham Shanghai. Yuan, Markets Leader at PwC China, added, "While facing increasingly bigger economic challenges and intense competition, it is crucial to foreign companies' global competitiveness to maintain business in China." In the face of such difficulties, some 45 per cent of the AmCham respondents favored a tariff reduction on Chinese imports as one possible step for US government support. China's Ministry of Commerce said earlier that foreign direct investment had declined 29 per cent in the first seven months of this year from the same period last year. Thus, with the acceleration of such trends, it will be a turn for American firms to operate in this more difficult environment, carrying immense economic and political challenges. The need for adaptation thus will be greater because firms are looking at their strategies and risks in view of changes in economic circumstances in China. That fact underlined the importance of full understanding market dynamics and possible ways of engagement. While this is the view held by many experts, it calls for clearer risk management and government relations strategies that allow the sustenance of operations in the region.

Confidence in China from US firms at all-time low

This is a historic financial milestone whereby interest payments on the US government's national debt finally surpassed $1 trillion for the first time, according to a recent report from the Treasury Department. Now, with the overall national debt reaching an astounding total of $35.3 trillion, the interest surged to $1.049 trillion just this year alone.

That's 30 per cent&nbsp;higher than the same period last year and underlines the increasing cost of servicing the national debt according to a report by CNBC. The full effects of the Federal Reserve's benchmark interest rates-the highest in 23 years-are now starting to come more clearly into view on government finances.

Total interest payments for the fiscal year are projected to top $1.158 trillion, according to estimates from the Treasury Department. That jump in the cost of debt servicing has put net interest payments at $843 billion, placing it as the third-largest expenditure category for the government, right after social security and medicare. 
 
Soaring deficit sounding alarm bells 
 
The increase in interest payments comes as the United States budget deficit jumped to nearly $2 trillion for the year. It surged by $380 billion from a surplus of $89 billion in the same period a year earlier for August. That dramatic reversal largely reflects accounting changes due to student debt forgiveness that have greatly hit the federal budget. 
 
The 2024 deficit widened 24 per cent&nbsp;from a year earlier, as economists and policy makers continue to warn that the trajectory of the nation's fiscal path is not sustainable. The continued climb in interest payments is building up the pressure on the government to get its fiscal house in order, especially with the Federal Reserve set to raise its interest rate in the weeks ahead. 
 
Implication for future fiscal policy 
 
All this-a steep climb in interest payments together with a ballooning deficit-has reopened imperatively the need for fiscal policy in the United States. There is speculation about possible rate cuts by the Federal Reserve since the Treasury yields have fallen in recent weeks, although any adjustment will be minor. Fast-changing dynamics of global&nbsp;financial markets requires the government to move ahead carefully, primarily to avoid turbulence in the economy. 
 
These are developments that are most sure to frame the debate on government spending, taxation, and general economic policy in the remaining months of the fiscal year. Record interest payments and an expanding deficit warn, that legislators can ill afford to waste any more time but should take concrete actions toward securing the nation's financial future.

This is a historic financial milestone whereby interest payments on the US government's national debt finally surpassed $1 trillion for the first time, according to a recent report from the Treasury Department.

This is a historic financial milestone whereby interest payments on the US government's national debt finally surpassed $1 trillion for the first time, according to a recent report from the Treasury Department. Now, with the overall national debt reaching an astounding total of $35.3 trillion, the interest surged to $1.049 trillion just this year alone. That's 30 per cent higher than the same period last year and underlines the increasing cost of servicing the national debt according to a report by CNBC. The full effects of the Federal Reserve's benchmark interest rates-the highest in 23 years-are now starting to come more clearly into view on government finances. Total interest payments for the fiscal year are projected to top $1.158 trillion, according to estimates from the Treasury Department. That jump in the cost of debt servicing has put net interest payments at $843 billion, placing it as the third-largest expenditure category for the government, right after social security and medicare. Soaring deficit sounding alarm bells The increase in interest payments comes as the United States budget deficit jumped to nearly $2 trillion for the year. It surged by $380 billion from a surplus of $89 billion in the same period a year earlier for August. That dramatic reversal largely reflects accounting changes due to student debt forgiveness that have greatly hit the federal budget. The 2024 deficit widened 24 per cent from a year earlier, as economists and policy makers continue to warn that the trajectory of the nation's fiscal path is not sustainable. The continued climb in interest payments is building up the pressure on the government to get its fiscal house in order, especially with the Federal Reserve set to raise its interest rate in the weeks ahead. Implication for future fiscal policy All this-a steep climb in interest payments together with a ballooning deficit-has reopened imperatively the need for fiscal policy in the United States. There is speculation about possible rate cuts by the Federal Reserve since the Treasury yields have fallen in recent weeks, although any adjustment will be minor. Fast-changing dynamics of global financial markets requires the government to move ahead carefully, primarily to avoid turbulence in the economy. These are developments that are most sure to frame the debate on government spending, taxation, and general economic policy in the remaining months of the fiscal year. Record interest payments and an expanding deficit warn, that legislators can ill afford to waste any more time but should take concrete actions toward securing the nation's financial future.

US interest payments on national debt top $1 trillion

This is according to a memo from Phil Spencer, chief executive of Microsoft Gaming, and comes after the giant $69 billion acquisition of Activision Blizzard. According to a CNBC report this memo was sent to the employees on Thursday.

What the layoffs mean 
 
Spencer's words were tinged with praise and the contributions of the employees that were going to be affected, as he said in a truly humble manner, "We are profoundly thankful for the contributions our colleagues are making as they are being affected." This utterance speaks volumes about the painful nature of such decisions in a corporate setup. 
 
Layoffs in this respect would be majorly in corporate and supportive functions whereby Microsoft apparently tries to bring rationalization into the ongoing operations. Spencer assured these laid-off people that the corporation was going to provide comprehensive care packages: severance packages, extended health-care benefits, proving that Microsoft really cared about its workforce in this transitional process. 
 
While jobs are being axed, Spencer made a point to underline that no games, devices or gaming experiences are axed as part of this restructuring. He underlined that alignment is critical for growth in a sustainable way in the future. 
 
Broader industry trends 
 
Recently, a wave of layoffs hit the gaming world, where some of the most major companies, such as Sony and Unity, aligned with the reduction of staff. This particular trend seems to reflect a possible shift within the gaming sector whereby firms seek to answer the market pressures and face financial stability in this industry. 
 
Microsoft's new layoffs are the results of successive rounds of layoffs in the company's gaming department-the third since purchasing Activision Blizzard. The company laid off 1,900 gaming sector roles back in January. In May, the company shut down a series of studios that belonged to its gaming division, leading to layoffs.

Hence, these job cuts mark the efforts of Microsoft in operational efficiency and how, after a huge acquisition, the company still tries very hard to support its dedicated staff through this transition. In the development of the story, it would be worth mentioning how all these changes will mold the future of Microsoft's ambitions concerning gaming. 
 
This forms part of the strategy that the technology and gaming giant is using to support its employees in such tough times, as it were, navigating such a difficult period. Regarding the changes or adjustments and how they will play a role in respect of Microsoft in the competitive gaming market, that is what the industry will be looking up to keenly. 
&nbsp;<o:p></o:p>

This is according to a memo from Phil Spencer, chief executive of Microsoft Gaming, and comes after the giant $69 billion acquisition of Activision Blizzard. According to a CNBC report this memo was sent to the employees on Thursday.

This is according to a memo from Phil Spencer, chief executive of Microsoft Gaming, and comes after the giant $69 billion acquisition of Activision Blizzard. According to a CNBC report this memo was sent to the employees on Thursday. What the layoffs mean Spencer's words were tinged with praise and the contributions of the employees that were going to be affected, as he said in a truly humble manner, "We are profoundly thankful for the contributions our colleagues are making as they are being affected." This utterance speaks volumes about the painful nature of such decisions in a corporate setup. Layoffs in this respect would be majorly in corporate and supportive functions whereby Microsoft apparently tries to bring rationalization into the ongoing operations. Spencer assured these laid-off people that the corporation was going to provide comprehensive care packages: severance packages, extended health-care benefits, proving that Microsoft really cared about its workforce in this transitional process. While jobs are being axed, Spencer made a point to underline that no games, devices or gaming experiences are axed as part of this restructuring. He underlined that alignment is critical for growth in a sustainable way in the future. Broader industry trends Recently, a wave of layoffs hit the gaming world, where some of the most major companies, such as Sony and Unity, aligned with the reduction of staff. This particular trend seems to reflect a possible shift within the gaming sector whereby firms seek to answer the market pressures and face financial stability in this industry. Microsoft's new layoffs are the results of successive rounds of layoffs in the company's gaming department-the third since purchasing Activision Blizzard. The company laid off 1,900 gaming sector roles back in January. In May, the company shut down a series of studios that belonged to its gaming division, leading to layoffs. Hence, these job cuts mark the efforts of Microsoft in operational efficiency and how, after a huge acquisition, the company still tries very hard to support its dedicated staff through this transition. In the development of the story, it would be worth mentioning how all these changes will mold the future of Microsoft's ambitions concerning gaming. This forms part of the strategy that the technology and gaming giant is using to support its employees in such tough times, as it were, navigating such a difficult period. Regarding the changes or adjustments and how they will play a role in respect of Microsoft in the competitive gaming market, that is what the industry will be looking up to keenly.

Microsoft to cut 650 jobs at its Xbox gaming unit

BurgerFi, a prominent name in the fast-casual dining sector, has filed for Chapter 11 bankruptcy protection, aligning itself with a growing trend among restaurant chains. This legal move is seen as a strategic step towards revitalising operations amid a challenging landscape characterised by decreased customer traffic and increased operational costs according to a CNBC report.

Founded in 2011 and known for its premium burgers, BurgerFi went public in 2020 through a merger with a special purpose acquisition company (SPAC). The recent bankruptcy filing comes just weeks after the company vocalised significant concerns about its viability to investors.

The chain operates not only under its own brand but also includes Anthony’s Coal Fired Pizza &amp; Wings. As a testament to the changing dynamics in the restaurant industry, BurgerFi is joining the ranks of several other notable brands, such as Red Lobster and Buca di Beppo, that have also pursued bankruptcy protections.

BurgerFi’s valuation and bankruptcy details<o:p></o:p>

According to the bankruptcy documentation, BurgerFi’s assets are valued between $50 million and $75 million, while its liabilities range from $100 million to $500 million. For the quarter ending April 1, the company reported revenues of $42.9 million alongside a net loss of $6.5 million. Furthermore, same-store sales have seen a significant decline of 13 per cent, raising red flags about the chain’s future.

As businesses in the restaurant sector continue to grapple with the complexities of a post-pandemic environment, combined with rising interest rates, it is clear that many are forced to adapt or face closures. With BurgerFi's restructuring strategy through Chapter 11, there is hope for a turnaround, but recovery remains uncertain.

The implications of BurgerFi’s decision extend beyond its own operations, reflecting broader challenges within the industry. The prevalent trend of restaurant chains seeking bankruptcy protection underlines the urgent need for a reassessment of business models in the current economic climate. As stakeholders closely watch BurgerFi’s next steps, the future of the burger brand hangs in the balance.

BurgerFi, a prominent name in the fast-casual dining sector, has filed for Chapter 11 bankruptcy protection, aligning itself with a growing trend among restaurant chains.

BurgerFi, a prominent name in the fast-casual dining sector, has filed for Chapter 11 bankruptcy protection, aligning itself with a growing trend among restaurant chains. This legal move is seen as a strategic step towards revitalising operations amid a challenging landscape characterised by decreased customer traffic and increased operational costs according to a CNBC report. Founded in 2011 and known for its premium burgers, BurgerFi went public in 2020 through a merger with a special purpose acquisition company (SPAC). The recent bankruptcy filing comes just weeks after the company vocalised significant concerns about its viability to investors. The chain operates not only under its own brand but also includes Anthony’s Coal Fired Pizza & Wings. As a testament to the changing dynamics in the restaurant industry, BurgerFi is joining the ranks of several other notable brands, such as Red Lobster and Buca di Beppo, that have also pursued bankruptcy protections. BurgerFi’s valuation and bankruptcy details According to the bankruptcy documentation, BurgerFi’s assets are valued between $50 million and $75 million, while its liabilities range from $100 million to $500 million. For the quarter ending April 1, the company reported revenues of $42.9 million alongside a net loss of $6.5 million. Furthermore, same-store sales have seen a significant decline of 13 per cent, raising red flags about the chain’s future. As businesses in the restaurant sector continue to grapple with the complexities of a post-pandemic environment, combined with rising interest rates, it is clear that many are forced to adapt or face closures. With BurgerFi's restructuring strategy through Chapter 11, there is hope for a turnaround, but recovery remains uncertain. The implications of BurgerFi’s decision extend beyond its own operations, reflecting broader challenges within the industry. The prevalent trend of restaurant chains seeking bankruptcy protection underlines the urgent need for a reassessment of business models in the current economic climate. As stakeholders closely watch BurgerFi’s next steps, the future of the burger brand hangs in the balance.

BurgerFi files for chapter 11 bankruptcy protection amid financial struggles

In 2023, US real median household income rose by 4%, according to the US census bureau. This marks a notable improvement as the economy continued its recovery to pre-pandemic levels. However, despite rising incomes, the poverty rate in the US also saw an increase.

2023 US Economic Overview: Income gains, inflation eases, poverty grows

The Federal Reserve of the US, along with other regulators, plans to make broad changes to a batch of proposed banks' capital rules as early as Sept. 19, according to a report from Bloomberg News on Friday, which cited people who have knowledge of the matter.

The amendments, it said, ran to some 450 pages in length and introduced fundamental rule changes that focus on the operational risk accord, including a reduction in the capital levels banks must hold against business lines such as wealth-management services and some credit-card operations.

The revised proposal would also relax the market-risk requirement for the country's largest lenders, which would also not be subject to the same stringent requirements pertaining to mortgages or tax-equity exposures, the report said.

Fed Vice Chair Michael Barr will preview the regulators' revised proposal and outline the next steps at the Hutchins Center on Fiscal &amp; Monetary Policy, Brookings said in a blog post.

The Basel III rules began to get rolled out after the 2007-2009 global financial crisis forced taxpayers to bail out several undercapitalised banks.

In July 2023, the Fed, the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation published for comment proposed changes to bank capital rules. The rules are set to revolutionise how larger banks measure risk and the amount of capital they keep.

Banks, fierce opponents to the initial "Basel III Endgame" proposal, which would increase the capital requirements on the larger banks, have been asking regulators for a proposal.

Regulators have been working for months in an attempt to revise the plan in a manner that could significantly reduce the capital impact for larger firms.

The Fed declined to comment on the report. The FDIC and the Office of the Comptroller of the Currency did not immediately respond to Reuters' requests for comment.

The Federal Reserve of the US, along with other regulators, plans to make broad changes to a batch of proposed banks' capital rules as early as Sept. 19, according to a report from Bloomberg News on Friday, which cited people who have knowledge of the matter.

The Federal Reserve of the US, along with other regulators, plans to make broad changes to a batch of proposed banks' capital rules as early as Sept. 19, according to a report from Bloomberg News on Friday, which cited people who have knowledge of the matter. The amendments, it said, ran to some 450 pages in length and introduced fundamental rule changes that focus on the operational risk accord, including a reduction in the capital levels banks must hold against business lines such as wealth-management services and some credit-card operations. The revised proposal would also relax the market-risk requirement for the country's largest lenders, which would also not be subject to the same stringent requirements pertaining to mortgages or tax-equity exposures, the report said. Fed Vice Chair Michael Barr will preview the regulators' revised proposal and outline the next steps at the Hutchins Center on Fiscal & Monetary Policy, Brookings said in a blog post. The Basel III rules began to get rolled out after the 2007-2009 global financial crisis forced taxpayers to bail out several undercapitalised banks. In July 2023, the Fed, the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation published for comment proposed changes to bank capital rules. The rules are set to revolutionise how larger banks measure risk and the amount of capital they keep. Banks, fierce opponents to the initial "Basel III Endgame" proposal, which would increase the capital requirements on the larger banks, have been asking regulators for a proposal. Regulators have been working for months in an attempt to revise the plan in a manner that could significantly reduce the capital impact for larger firms. The Fed declined to comment on the report. The FDIC and the Office of the Comptroller of the Currency did not immediately respond to Reuters' requests for comment.

Bloomberg reports US plans to propose revisions to Basel rules this month

In a recent address at the Texas Tribune Festival in Austin, Treasury Secretary Janet Yellen sought to alleviate concerns about the US economy, emphasizing its resilience and stability. Her remarks came on the heels of another month of disappointing employment figures, which have sparked apprehension among investors and analysts as detailed in a report by CNBC. Further, Janet Yellen said that she believes the U.S. economy is healthy and that recent months of cooler jobs data is a signal of a soft landing, not a recession.

Yellen's address aimed to reassure the public that the US economy remains solid and is heading toward what economists term a "soft landing." This concept involves the Federal Reserve&nbsp;raising interest rates to curb inflation and implementing cuts before a recession occurs. Despite the recent job data, Yellen expressed confidence in the economy's trajectory.

"We're observing a decrease in the urgency surrounding hiring and job vacancies, but significant layoffs are not occurring," Yellen noted. She acknowledged the deceleration in job growth compared to the hiring surge following the US reopening after the Covid-19 pandemic but emphasized that the economy is "well into a recovery" and "essentially functioning at full employment."

Job market trends and economic indicators<o:p></o:p>

The latest employment figures from the Bureau of Labor Statistics showed that nonfarm payrolls rose by 142,000 in August, falling short of the Dow Jones prediction of 161,000. This shortfall led to a decline in the S&amp;P 500, marking the worst week since March 2023. However, the unemployment rate ticked down to 4.2 per cent, and job growth in August surpassed that of July.

Yellen highlighted these positive indicators, stating, "I don't see any warning signs." She also pointed out the significant reduction in inflation, which has been a key focus for economic policymakers. "It has truly been remarkable to reduce inflation as significantly as we have. Most people would refer to this as the soft landing," she asserted.

&nbsp;Market reactions, future outlook and federal reserve expectations

The recent job data has reignited fears of a potential recession in the US, particularly concerning the Federal Reserve's ability to achieve a soft landing. Analysts widely anticipate that the Fed will reduce interest rates this month to support the economy.

Yellen's comments were aimed at calming these fears, emphasizing that the US is moving in the right direction. Her reassurance is crucial as the economy navigates a period of transition from rapid growth to more sustainable levels.

Further, despite the challenges posed by the recent job reports, Yellen's message was one of optimism and stability. She underscored the economy's resilience and its ability to adapt to changing conditions. The decrease in job vacancies and the slowdown in hiring urgency are seen as signs of a normalizing job market rather than indicators of a looming recession.

As the US economy continues on its path toward a soft landing, Yellen's reassurances are likely to influence market sentiment and investor confidence. Her statements reflect a broader consensus among economic policymakers that the US is well-positioned to navigate the current economic landscape without significant disruptions.

Therefore, Yellen's address at the Texas Tribune Festival provided a much-needed perspective on the US economy's current state and its future trajectory. As the economy moves forward, her confidence in its stability and resilience is a reassuring note for both investors and the general public.

In a recent address at the Texas Tribune Festival in Austin, Treasury Secretary Janet Yellen sought to alleviate concerns about the US economy, emphasizing its resilience and stability.

In a recent address at the Texas Tribune Festival in Austin, Treasury Secretary Janet Yellen sought to alleviate concerns about the US economy, emphasizing its resilience and stability. Her remarks came on the heels of another month of disappointing employment figures, which have sparked apprehension among investors and analysts as detailed in a report by CNBC. Further, Janet Yellen said that she believes the U.S. economy is healthy and that recent months of cooler jobs data is a signal of a soft landing, not a recession. Yellen's address aimed to reassure the public that the US economy remains solid and is heading toward what economists term a "soft landing." This concept involves the Federal Reserve raising interest rates to curb inflation and implementing cuts before a recession occurs. Despite the recent job data, Yellen expressed confidence in the economy's trajectory. "We're observing a decrease in the urgency surrounding hiring and job vacancies, but significant layoffs are not occurring," Yellen noted. She acknowledged the deceleration in job growth compared to the hiring surge following the US reopening after the Covid-19 pandemic but emphasized that the economy is "well into a recovery" and "essentially functioning at full employment." Job market trends and economic indicators The latest employment figures from the Bureau of Labor Statistics showed that nonfarm payrolls rose by 142,000 in August, falling short of the Dow Jones prediction of 161,000. This shortfall led to a decline in the S&P 500, marking the worst week since March 2023. However, the unemployment rate ticked down to 4.2 per cent, and job growth in August surpassed that of July. Yellen highlighted these positive indicators, stating, "I don't see any warning signs." She also pointed out the significant reduction in inflation, which has been a key focus for economic policymakers. "It has truly been remarkable to reduce inflation as significantly as we have. Most people would refer to this as the soft landing," she asserted. Market reactions, future outlook and federal reserve expectations The recent job data has reignited fears of a potential recession in the US, particularly concerning the Federal Reserve's ability to achieve a soft landing. Analysts widely anticipate that the Fed will reduce interest rates this month to support the economy. Yellen's comments were aimed at calming these fears, emphasizing that the US is moving in the right direction. Her reassurance is crucial as the economy navigates a period of transition from rapid growth to more sustainable levels. Further, despite the challenges posed by the recent job reports, Yellen's message was one of optimism and stability. She underscored the economy's resilience and its ability to adapt to changing conditions. The decrease in job vacancies and the slowdown in hiring urgency are seen as signs of a normalizing job market rather than indicators of a looming recession. As the US economy continues on its path toward a soft landing, Yellen's reassurances are likely to influence market sentiment and investor confidence. Her statements reflect a broader consensus among economic policymakers that the US is well-positioned to navigate the current economic landscape without significant disruptions. Therefore, Yellen's address at the Texas Tribune Festival provided a much-needed perspective on the US economy's current state and its future trajectory. As the economy moves forward, her confidence in its stability and resilience is a reassuring note for both investors and the general public.

US economy remains solid, heading toward soft landing, says Treasury Secretary Janet Yellen

Broadcom Inc. has released its financial results for the third quarter of fiscal year 2024, showcasing a remarkable 47 per cent increase in revenue, which reached $13.07 billion. However, the semiconductor giant also reported a significant net loss of $1.88 billion, primarily due to acquisition-related costs associated with its integration of VMware, acquired in November 2023 as detailed in a CNBC report.&nbsp; 
 
Revenue growth is driven by AI and software solutions 
 
The report further stated that the revenue growth was bolstered by strong demand for Broadcom's semiconductor solutions, particularly in the artificial intelligence (AI) sector. The company’s President and CEO, Hock Tan, highlighted that the AI semiconductor solutions are projected to generate $12 billion in revenue for the fiscal year 2024. This growth is supported by advancements in Ethernet networking and custom AI accelerators designed for data centres.<o:p></o:p>

Broadcom's semiconductor solutions segment reported revenues of $7.27 billion, a 5 per cent increase year-over-year. Meanwhile, the infrastructure software segment saw an impressive 200 per cent surge in revenue, reaching $5.8 billion, largely attributed to the ongoing integration of VMware. This integration has not only expanded Broadcom's product offerings but has also significantly enhanced its market presence in the software domain.<o:p></o:p>

Future guidance by Broadcom<o:p></o:p>

Despite the substantial revenue increase, Broadcom's net loss of $1.88 billion, or $0.40 per share, starkly contrasts with the $3.3 billion profit reported in the same quarter last year. This loss was largely influenced by $1.5 billion in amortisation of acquisition-related intangible assets and other restructuring costs. However, on a non-GAAP basis i.e., Generally Accepted Accounting Principles basis, which excludes these one-time costs, Broadcom's earnings per share stood at $1.24, surpassing analysts' expectations of $1.20 per share.<o:p></o:p>

Looking ahead, Broadcom has provided guidance for the fourth quarter of fiscal year 2024, projecting revenues of approximately $14 billion, which would represent a 51 per cent increase compared to the previous year. The company anticipates an adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin of around 64 percent of projected revenue, indicating a strong operational performance as it continues to integrate VMware and expand its AI capabilities.<o:p></o:p>

Market reaction and investor sentiment<o:p></o:p>

Following the earnings announcement, Broadcom's stock experienced a decline of over 6 per cent in after-hours trading, reflecting investor concerns regarding the net loss and the impact of integration costs on future profitability. Despite this, the company's stock has risen approximately 40 per cent since the beginning of the year, outperforming the broader market.<o:p></o:p>

As investors digest the latest results, the focus will be on how effectively Broadcom can manage its integration of VMware and leverage its strengths in the AI sector to drive future growth. The ongoing demand for AI solutions presents a significant opportunity for Broadcom, and how the company navigates these challenges will be crucial for its stock performance in the coming quarters.<o:p></o:p>

Therefore, while Broadcom's third quarter 2024 results highlight impressive revenue growth, the significant net loss raises questions about the sustainability of its current trajectory. Investors will be keenly observing the company's performance in the fourth quarter as it aims to capitalise on the growing AI market and solidify its position within the technology sector.<o:p></o:p>

Broadcom Inc. has released its financial results for the third quarter of fiscal year 2024, showcasing a remarkable 47 per cent increase in revenue, which reached $13.

Broadcom Inc. has released its financial results for the third quarter of fiscal year 2024, showcasing a remarkable 47 per cent increase in revenue, which reached $13.07 billion. However, the semiconductor giant also reported a significant net loss of $1.88 billion, primarily due to acquisition-related costs associated with its integration of VMware, acquired in November 2023 as detailed in a CNBC report. Revenue growth is driven by AI and software solutions The report further stated that the revenue growth was bolstered by strong demand for Broadcom's semiconductor solutions, particularly in the artificial intelligence (AI) sector. The company’s President and CEO, Hock Tan, highlighted that the AI semiconductor solutions are projected to generate $12 billion in revenue for the fiscal year 2024. This growth is supported by advancements in Ethernet networking and custom AI accelerators designed for data centres. Broadcom's semiconductor solutions segment reported revenues of $7.27 billion, a 5 per cent increase year-over-year. Meanwhile, the infrastructure software segment saw an impressive 200 per cent surge in revenue, reaching $5.8 billion, largely attributed to the ongoing integration of VMware. This integration has not only expanded Broadcom's product offerings but has also significantly enhanced its market presence in the software domain. Future guidance by Broadcom Despite the substantial revenue increase, Broadcom's net loss of $1.88 billion, or $0.40 per share, starkly contrasts with the $3.3 billion profit reported in the same quarter last year. This loss was largely influenced by $1.5 billion in amortisation of acquisition-related intangible assets and other restructuring costs. However, on a non-GAAP basis i.e., Generally Accepted Accounting Principles basis, which excludes these one-time costs, Broadcom's earnings per share stood at $1.24, surpassing analysts' expectations of $1.20 per share. Looking ahead, Broadcom has provided guidance for the fourth quarter of fiscal year 2024, projecting revenues of approximately $14 billion, which would represent a 51 per cent increase compared to the previous year. The company anticipates an adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin of around 64 percent of projected revenue, indicating a strong operational performance as it continues to integrate VMware and expand its AI capabilities. Market reaction and investor sentiment Following the earnings announcement, Broadcom's stock experienced a decline of over 6 per cent in after-hours trading, reflecting investor concerns regarding the net loss and the impact of integration costs on future profitability. Despite this, the company's stock has risen approximately 40 per cent since the beginning of the year, outperforming the broader market. As investors digest the latest results, the focus will be on how effectively Broadcom can manage its integration of VMware and leverage its strengths in the AI sector to drive future growth. The ongoing demand for AI solutions presents a significant opportunity for Broadcom, and how the company navigates these challenges will be crucial for its stock performance in the coming quarters. Therefore, while Broadcom's third quarter 2024 results highlight impressive revenue growth, the significant net loss raises questions about the sustainability of its current trajectory. Investors will be keenly observing the company's performance in the fourth quarter as it aims to capitalise on the growing AI market and solidify its position within the technology sector.

Broadcom reports strong Q3, targets $12 billion artificial intelligence chip revenue

Shares of U.S. Steel plummeted by almost 18 per cent on Wednesday, following reports that the White House is poised to block the company's acquisition by Japanese steel giant Nippon Steel. The Biden administration has made it clear that U.S. Steel "should remain entirely American," sending shockwaves through the industry and the financial markets as detailed in a CNBC report.<o:p></o:p>

The significant drop in U.S. Steel's stock price reflects the growing concerns among investors regarding the future of the company amidst the looming threat of foreign ownership. The White House's intervention has raised questions about the stability of the market and the implications for foreign investments in critical industries.<o:p></o:p>

U.S. Steel CEO David Burritt told The Wall Street Journal on Wednesday that the company would likely be forced to close plants and move its headquarters from Pittsburgh if the deal is blocked. Burritt told the Journal that the transaction is crucial to keeping U.S. Steel’s older plants competitive and maintaining jobs.<o:p></o:p>

The deal has been under review by the Committee on Foreign Investment, a body that scrutinizes the potential impact of foreign investment in the U.S. on national security. U.S. Steel has not received any update or executive order related to the committee’s review, a company spokesperson said.<o:p></o:p>

“We continue to stand by the fact that there are no national security issues associated with this transaction, as Japan is one of our most staunch allies,” the U.S. Steel spokesperson said.<o:p></o:p>

Analysts suggest that the administration's announcement signals a deeper commitment to protecting American industry and national security, as the steel sector is a vital component of the manufacturing landscape. As the situation continues to unfold, stakeholders within the industry, including employees and local economies, will be closely monitoring the developments.<o:p></o:p>

The latest reports highlight the increasing trend of government scrutiny over foreign acquisitions, particularly in light of national security implications. Moving forward, U.S. Steel is expected to play a crucial role in discussions surrounding trade policy and foreign investment regulations, as the company seeks to safeguard domestic interests.<o:p></o:p>

Investors will be eager to see how these events shape the future of U.S. Steel and the broader steel market. With the declining share value, attention turns to the company's strategic decisions in the face of these challenges.<o:p></o:p>

As the situation continues to evolve, the steel industry and the global business community will be closely watching the outcome of this high-stakes battle for control of one of America's most iconic industrial giants.

Brief history of US Steel<o:p></o:p>

United States Steel Corporation, more commonly known as US Steel, is an American integrated steel producer headquartered in Pittsburgh, Pennsylvania, with production operations primarily in the United States of America and in Central Europe.

The company produces and sells steel products, including flat-rolled and tubular products for customers in industries across automotive, construction, consumer, electrical, industrial equipment, distribution, and energy. Operations also include iron ore and coke production facilities.<o:p></o:p>

It was the eighth-largest steel producer in the world in 2008. By 2022, the company was the world's 24th-largest steel producer and the second-largest in the United States behind Nucor Corporation. Though renamed USX Corporation in 1986, the company was renamed United States Steel in 2001 after spinning off its energy business, including Marathon Oil, and other assets, from its core steel concern.<o:p></o:p>

<o:p></o:p> 
 
&nbsp;

Shares of U.S. Steel plummeted by almost 18 per cent on Wednesday, following reports that the White House is poised to block the company's acquisition by Japanese steel giant Nippon Steel.

Shares of U.S. Steel plummeted by almost 18 per cent on Wednesday, following reports that the White House is poised to block the company's acquisition by Japanese steel giant Nippon Steel. The Biden administration has made it clear that U.S. Steel "should remain entirely American," sending shockwaves through the industry and the financial markets as detailed in a CNBC report. The significant drop in U.S. Steel's stock price reflects the growing concerns among investors regarding the future of the company amidst the looming threat of foreign ownership. The White House's intervention has raised questions about the stability of the market and the implications for foreign investments in critical industries. U.S. Steel CEO David Burritt told The Wall Street Journal on Wednesday that the company would likely be forced to close plants and move its headquarters from Pittsburgh if the deal is blocked. Burritt told the Journal that the transaction is crucial to keeping U.S. Steel’s older plants competitive and maintaining jobs. The deal has been under review by the Committee on Foreign Investment, a body that scrutinizes the potential impact of foreign investment in the U.S. on national security. U.S. Steel has not received any update or executive order related to the committee’s review, a company spokesperson said. “We continue to stand by the fact that there are no national security issues associated with this transaction, as Japan is one of our most staunch allies,” the U.S. Steel spokesperson said. Analysts suggest that the administration's announcement signals a deeper commitment to protecting American industry and national security, as the steel sector is a vital component of the manufacturing landscape. As the situation continues to unfold, stakeholders within the industry, including employees and local economies, will be closely monitoring the developments. The latest reports highlight the increasing trend of government scrutiny over foreign acquisitions, particularly in light of national security implications. Moving forward, U.S. Steel is expected to play a crucial role in discussions surrounding trade policy and foreign investment regulations, as the company seeks to safeguard domestic interests. Investors will be eager to see how these events shape the future of U.S. Steel and the broader steel market. With the declining share value, attention turns to the company's strategic decisions in the face of these challenges. As the situation continues to evolve, the steel industry and the global business community will be closely watching the outcome of this high-stakes battle for control of one of America's most iconic industrial giants. Brief history of US Steel United States Steel Corporation, more commonly known as US Steel, is an American integrated steel producer headquartered in Pittsburgh, Pennsylvania, with production operations primarily in the United States of America and in Central Europe. The company produces and sells steel products, including flat-rolled and tubular products for customers in industries across automotive, construction, consumer, electrical, industrial equipment, distribution, and energy. Operations also include iron ore and coke production facilities. It was the eighth-largest steel producer in the world in 2008. By 2022, the company was the world's 24th-largest steel producer and the second-largest in the United States behind Nucor Corporation. Though renamed USX Corporation in 1986, the company was renamed United States Steel in 2001 after spinning off its energy business, including Marathon Oil, and other assets, from its core steel concern.

U.S. Steel shares plummet amid White House action against Nippon steel takeover

In a noticeable report released by Bain &amp; Company, a U.S.-based consulting firm, it has been revealed that Chinese enterprises venturing into international markets for growth possess a substantial advantage compared to the initial wave of Asian firms that pursued globalization. This advantage stems from the vast ethnic Chinese diaspora, a fact that has been largely overlooked until now.<o:p></o:p>

The study, which primarily analysed data from 2023 concerning 150 publicly traded consumer goods companies headquartered in the Asia-Pacific region, provides a fascinating insight into the future of global commerce. David Zehner, a senior partner at Bain, shared with CNBC that the overseas ethnic Chinese community is substantial in numerous markets, presenting a unique opportunity for Chinese firms to cater to these populations.<o:p></o:p>

As domestic growth begins to decelerate, these companies are observing successful strategies implemented by their Japanese and South Korean counterparts and are eager to replicate that success. Zehner highlighted that many Chinese companies are initiating their global ventures by concentrating on the Asian market before branching out to Europe and North America.<o:p></o:p>

According to United Nations estimates, approximately 60 million ethnic Chinese reside outside of mainland China. In the United States, the Chinese population, although a minority, reached around 5.2 million by 2023, as reported by the U.S. Census Bureau. Meanwhile, in Singapore, where the total population is 5.92 million, ethnic Chinese individuals comprised 74 per cent of the population as of June 2023.<o:p></o:p>

Zehner emphasized that a number of Chinese firms possess an ambitious global outlook, leveraging the entrepreneurial spirit and rapid innovation they have cultivated domestically to establish new footholds abroad. He believes that while South Korean and Japanese companies may contemplate similar strategies, Chinese firms have a distinct advantage in many respects.<o:p></o:p>

Bain's analysis revealed that, relative to their South Korean and Japanese counterparts, Chinese consumer businesses have not yet tapped into overseas markets for revenue to the same extent. The research focused on four sectors: consumer electronics, consumer health, apparel, and fast-moving consumer goods (FMCG), which are typically sold quickly and at lower prices.<o:p></o:p>

Among Japanese companies in the FMCG sector, all 16 generated at least 10 per cent of their revenue from international markets, with five achieving over half of their sales from abroad. In the case of the four South Korean companies in the same segment, their overseas revenue ranged from 10 per cent to 50 per cent. Conversely, within Greater China, 16 companies were part of the FMCG sector; however, five concentrated solely on the domestic market. For nine of these companies up to 10 per cent of their revenue international sales, while only two managed to achieve between 10 and 50 per cent in comparison with peers.<o:p></o:p>

Zehner remains optimistic, suggesting that Chinese companies are beginning to gain momentum. He foresees numerous opportunities for these firms to establish product categories in various regions where they are still underdeveloped. He also pointed out the increasing impact of Asian culture and brands in many Western markets.<o:p></o:p>

Recent developments justifying the moves to expand overseas are say, Chinese retailer Miniso on August 31 opened its largest store to date in Jakarta, Indonesia, and claimed record first-day sales of 1.18 million yuan ($166,000). The company, which sells household and daily use consumer products, said it opened its 200th store in the U.S. on August 24.<o:p></o:p>

Despite the promising prospects, the journey to success is fraught with challenges. After five years attempting to enter the Singapore market through a local partnership, the Chinese tea brand Chagee opted this summer to overhaul its approach by directly owning its stores. Other Chinese brands are utilizing Singapore as a cultural testing ground to better connect with Western consumers.<o:p></o:p>

Zehner remarked that success will favor companies that can learn and adapt swiftly, rather than assuming that strategies that work domestically will translate seamlessly to international markets. He advised a long-term perspective on international growth, cautioning against a 'get-rich-quick' mentality and emphasizing that companies should not expect immediate returns on their marketing investments from the outset.<o:p></o:p>

<o:p>&nbsp;</o:p>

In a noticeable report released by Bain & Company, a U.S.-based consulting firm, it has been revealed that Chinese enterprises venturing into international markets for growth possess a substantial advantage compared to the initial wave of Asian firms that pursued globalization.

In a noticeable report released by Bain & Company, a U.S.-based consulting firm, it has been revealed that Chinese enterprises venturing into international markets for growth possess a substantial advantage compared to the initial wave of Asian firms that pursued globalization. This advantage stems from the vast ethnic Chinese diaspora, a fact that has been largely overlooked until now. The study, which primarily analysed data from 2023 concerning 150 publicly traded consumer goods companies headquartered in the Asia-Pacific region, provides a fascinating insight into the future of global commerce. David Zehner, a senior partner at Bain, shared with CNBC that the overseas ethnic Chinese community is substantial in numerous markets, presenting a unique opportunity for Chinese firms to cater to these populations. As domestic growth begins to decelerate, these companies are observing successful strategies implemented by their Japanese and South Korean counterparts and are eager to replicate that success. Zehner highlighted that many Chinese companies are initiating their global ventures by concentrating on the Asian market before branching out to Europe and North America. According to United Nations estimates, approximately 60 million ethnic Chinese reside outside of mainland China. In the United States, the Chinese population, although a minority, reached around 5.2 million by 2023, as reported by the U.S. Census Bureau. Meanwhile, in Singapore, where the total population is 5.92 million, ethnic Chinese individuals comprised 74 per cent of the population as of June 2023. Zehner emphasized that a number of Chinese firms possess an ambitious global outlook, leveraging the entrepreneurial spirit and rapid innovation they have cultivated domestically to establish new footholds abroad. He believes that while South Korean and Japanese companies may contemplate similar strategies, Chinese firms have a distinct advantage in many respects. Bain's analysis revealed that, relative to their South Korean and Japanese counterparts, Chinese consumer businesses have not yet tapped into overseas markets for revenue to the same extent. The research focused on four sectors: consumer electronics, consumer health, apparel, and fast-moving consumer goods (FMCG), which are typically sold quickly and at lower prices. Among Japanese companies in the FMCG sector, all 16 generated at least 10 per cent of their revenue from international markets, with five achieving over half of their sales from abroad. In the case of the four South Korean companies in the same segment, their overseas revenue ranged from 10 per cent to 50 per cent. Conversely, within Greater China, 16 companies were part of the FMCG sector; however, five concentrated solely on the domestic market. For nine of these companies up to 10 per cent of their revenue international sales, while only two managed to achieve between 10 and 50 per cent in comparison with peers. Zehner remains optimistic, suggesting that Chinese companies are beginning to gain momentum. He foresees numerous opportunities for these firms to establish product categories in various regions where they are still underdeveloped. He also pointed out the increasing impact of Asian culture and brands in many Western markets. Recent developments justifying the moves to expand overseas are say, Chinese retailer Miniso on August 31 opened its largest store to date in Jakarta, Indonesia, and claimed record first-day sales of 1.18 million yuan ($166,000). The company, which sells household and daily use consumer products, said it opened its 200th store in the U.S. on August 24. Despite the promising prospects, the journey to success is fraught with challenges. After five years attempting to enter the Singapore market through a local partnership, the Chinese tea brand Chagee opted this summer to overhaul its approach by directly owning its stores. Other Chinese brands are utilizing Singapore as a cultural testing ground to better connect with Western consumers. Zehner remarked that success will favor companies that can learn and adapt swiftly, rather than assuming that strategies that work domestically will translate seamlessly to international markets. He advised a long-term perspective on international growth, cautioning against a 'get-rich-quick' mentality and emphasizing that companies should not expect immediate returns on their marketing investments from the outset.

Chinese firms poised to dominate global markets with ethnic Chinese diaspora advantage

Seen as a positive development for the US economy, a recent paper published by the Federal Reserve indicates that housing inflation is likely to decrease in the year ahead. The research was published on September 3, by the federal Reserve Bank of San Francisco. This projection comes at a time when the housing market has been under intense scrutiny from both policymakers and economists as detailed in a Reuters report. <o:p></o:p>

Economic implications of declining housing inflation<o:p></o:p>

The Federal Reserve's analysis highlights several key factors that are converging to create a potential cooling effect on housing costs. A combination of increased housing supply, a shift in buyer demand, and the possibility of more lenient monetary policy could all contribute to easing inflationary pressures. As the Fed states, "We expect housing inflation to fall as the adjustments in supply begin to take hold."<o:p></o:p>

This forecast could have significant implications for the broader economy, particularly in terms of consumer spending and affordability in the housing market. Reduced inflation in housing is likely to free up financial resources for families, allowing them to invest in other areas of the economy, which could stimulate further economic growth. For instance, with lower housing costs, families may have more disposable income to spend on other goods and services, thereby boosting consumer spending and potentially driving economic expansion.<o:p></o:p>

Future outlook and monetary policy implications<o:p></o:p>

Looking ahead, the Fed's findings could influence monetary policy decisions. Lower housing inflation might lead to a reconsideration of interest rate hikes, providing the Fed with more flexibility in shaping its financial strategy. Economists suggest that if housing costs stabilize, it may allow the Fed to adopt a more liberal approach to monetary policy, potentially avoiding aggressive interest rate increases that could otherwise dampen economic growth.<o:p></o:p>

As the landscape of the housing market evolves, the Fed emphasizes the importance of monitoring these trends closely. "Ongoing evaluation of market dynamics will be crucial," they note, indicating a proactive stance in managing inflation expectations.<o:p></o:p>

Fed to remain data driven<o:p></o:p>

The US Fed hence, according to the chair Jerome Powell is going to remain data driven to deal with the ever-evolving global economy. Further, the anticipated decline in housing inflation presents a welcome prospect for many households and reflects a shift in the economic narrative surrounding the US housing market.<o:p></o:p>

With this expected change, stakeholders across the property and finance sectors will need to adjust their strategies to align with the evolving economic conditions. This includes real estate developers, lenders, and investors, who must adapt to the new market dynamics to remain competitive.<o:p></o:p>

<o:p>&nbsp;</o:p>

<o:p>&nbsp;</o:p>

Seen as a positive development for the US economy, a recent paper published by the Federal Reserve indicates that housing inflation is likely to decrease in the year ahead.

Seen as a positive development for the US economy, a recent paper published by the Federal Reserve indicates that housing inflation is likely to decrease in the year ahead. The research was published on September 3, by the federal Reserve Bank of San Francisco. This projection comes at a time when the housing market has been under intense scrutiny from both policymakers and economists as detailed in a Reuters report. Economic implications of declining housing inflation The Federal Reserve's analysis highlights several key factors that are converging to create a potential cooling effect on housing costs. A combination of increased housing supply, a shift in buyer demand, and the possibility of more lenient monetary policy could all contribute to easing inflationary pressures. As the Fed states, "We expect housing inflation to fall as the adjustments in supply begin to take hold." This forecast could have significant implications for the broader economy, particularly in terms of consumer spending and affordability in the housing market. Reduced inflation in housing is likely to free up financial resources for families, allowing them to invest in other areas of the economy, which could stimulate further economic growth. For instance, with lower housing costs, families may have more disposable income to spend on other goods and services, thereby boosting consumer spending and potentially driving economic expansion. Future outlook and monetary policy implications Looking ahead, the Fed's findings could influence monetary policy decisions. Lower housing inflation might lead to a reconsideration of interest rate hikes, providing the Fed with more flexibility in shaping its financial strategy. Economists suggest that if housing costs stabilize, it may allow the Fed to adopt a more liberal approach to monetary policy, potentially avoiding aggressive interest rate increases that could otherwise dampen economic growth. As the landscape of the housing market evolves, the Fed emphasizes the importance of monitoring these trends closely. "Ongoing evaluation of market dynamics will be crucial," they note, indicating a proactive stance in managing inflation expectations. Fed to remain data driven The US Fed hence, according to the chair Jerome Powell is going to remain data driven to deal with the ever-evolving global economy. Further, the anticipated decline in housing inflation presents a welcome prospect for many households and reflects a shift in the economic narrative surrounding the US housing market. With this expected change, stakeholders across the property and finance sectors will need to adjust their strategies to align with the evolving economic conditions. This includes real estate developers, lenders, and investors, who must adapt to the new market dynamics to remain competitive.

US housing inflation anticipated to decline in the coming year, according to federal reserve report

Let's us now look at China's new rescue plan to support the property market after dolling out Billions of Dollars in stimulus. To help millions of households cut borrowing costs and increase spending, China is thinking about letting homeowners refinance up to 5.4 trillion dollars in mortgages.

Fading US inflation keeps the fed on the path of rate cuts | World Business Watch | WION News

In a significant economic update, the US economy’s growth rate for the second quarter of 2024 has been revised upward to 3 per cent, according to data released on August 29. This revision marks a notable improvement from earlier estimates and underscores the critical role that consumer spending continues to play in sustaining the nation’s economic momentum, as detailed in a report by Reuters.&nbsp;

How has the consumer spending and unemployment rate performed?&nbsp;

Consumer spending, which accounts for more than two-thirds of the US economy, surged at a revised rate of 2.9 per cent during the second quarter. This increase reflects the enduring confidence of American consumers, who have maintained robust spending levels despite ongoing concerns about inflation and rising interest rates.&nbsp;

The stability of the US job market, characterised by low unemployment rates, has been a significant factor in bolstering consumer confidence. This security has encouraged households to continue spending, thereby driving economic growth during a period of global uncertainty.&nbsp;

Role of business investments&nbsp;

Business investment also played a crucial role in the revised growth figures. Companies across various sectors have increased their investments in infrastructure, technology, and other long-term assets, contributing to the overall economic expansion. These investments are expected to have lasting positive effects on productivity and growth.&nbsp;

The moderation of inflation, while still a concern, has also supported consumer spending by preserving purchasing power. Recent data suggests that price increases are beginning to slow, allowing consumers to maintain their spending habits without feeling the full brunt of inflationary pressures.&nbsp;

The revised growth rate has significant implications for US economic policy. The Federal Reserve may need to reconsider its approach to interest rate adjustments, taking into account the stronger-than-expected economic data. A cautious stance on rate hikes could be necessary to avoid hindering the current economic momentum.&nbsp;

Additionally, the government may prioritise further infrastructure investments, seeing them as essential to long-term economic efficiency. Support for small businesses could also become a focus, as these enterprises are key to maintaining a diverse and innovative economy.

Despite the encouraging economic indicators, there are still concerns about consumer sentiment. Some recent surveys indicate a dip in consumer optimism, driven by fears of inflation and potential economic downturns. This could impact future spending patterns, making it critical for policymakers to address these concerns through clear communication and strategic adjustments.&nbsp;

As the US economy navigates the complexities of inflation and global uncertainties, the revised growth rate for Q2 2024 serves as a reminder of the resilience and adaptability of the American economy. However, sustaining this momentum will require a balanced approach that considers both growth and consumer confidence in the months ahead.

In a significant economic update, the US economy’s growth rate for the second quarter of 2024 has been revised upward to 3 per cent, according to data released on August 29.

In a significant economic update, the US economy’s growth rate for the second quarter of 2024 has been revised upward to 3 per cent, according to data released on August 29. This revision marks a notable improvement from earlier estimates and underscores the critical role that consumer spending continues to play in sustaining the nation’s economic momentum, as detailed in a report by Reuters. How has the consumer spending and unemployment rate performed? Consumer spending, which accounts for more than two-thirds of the US economy, surged at a revised rate of 2.9 per cent during the second quarter. This increase reflects the enduring confidence of American consumers, who have maintained robust spending levels despite ongoing concerns about inflation and rising interest rates. The stability of the US job market, characterised by low unemployment rates, has been a significant factor in bolstering consumer confidence. This security has encouraged households to continue spending, thereby driving economic growth during a period of global uncertainty. Role of business investments Business investment also played a crucial role in the revised growth figures. Companies across various sectors have increased their investments in infrastructure, technology, and other long-term assets, contributing to the overall economic expansion. These investments are expected to have lasting positive effects on productivity and growth. The moderation of inflation, while still a concern, has also supported consumer spending by preserving purchasing power. Recent data suggests that price increases are beginning to slow, allowing consumers to maintain their spending habits without feeling the full brunt of inflationary pressures. The revised growth rate has significant implications for US economic policy. The Federal Reserve may need to reconsider its approach to interest rate adjustments, taking into account the stronger-than-expected economic data. A cautious stance on rate hikes could be necessary to avoid hindering the current economic momentum. Additionally, the government may prioritise further infrastructure investments, seeing them as essential to long-term economic efficiency. Support for small businesses could also become a focus, as these enterprises are key to maintaining a diverse and innovative economy. Despite the encouraging economic indicators, there are still concerns about consumer sentiment. Some recent surveys indicate a dip in consumer optimism, driven by fears of inflation and potential economic downturns. This could impact future spending patterns, making it critical for policymakers to address these concerns through clear communication and strategic adjustments. As the US economy navigates the complexities of inflation and global uncertainties, the revised growth rate for Q2 2024 serves as a reminder of the resilience and adaptability of the American economy. However, sustaining this momentum will require a balanced approach that considers both growth and consumer confidence in the months ahead.

US economy sees 3% growth in the second quarter, boosted by consumer spending

UBS Global Wealth Management has revised its forecast for a US recession, raising the probability from 20 per cent to 25 per cent, according to a Reuters report. This adjustment comes amid mounting worries about economic instability, driven primarily by underwhelming job growth and recent unemployment statistics. UBS's updated prediction reflects a deepening concern over the US economic landscape, which is currently characterised by uncertainty and signs of potential weakening. 
&nbsp; 
The increased likelihood of a recession underscores the challenges facing the economy, as recent data points suggest a less robust labour market and broader economic vulnerabilities. The firm's revised outlook suggests a growing recognition of the risks associated with the current economic environment and highlights the possibility of a downturn in the near future.&nbsp;

In a note released on August 27, 2024, UBS cited recent data showing a significant slowdown in hiring and a rise in the unemployment rate to 4.3 per cent in July, its highest in nearly three years, as key factors influencing its revised forecast. The US Department of Labor's adjustment of total payroll employment by 818,000 for the year through March 2024 further fuelled recession fears, indicating fewer jobs were created than previously reported.&nbsp;

UBS's new forecast aligns with broader economic uncertainty. Earlier this month, JPMorgan increased its recession probability for the year to 35 per cent, attributing this to easing labour market pressures. Conversely, Goldman Sachs reduced its recession probability to 20 per cent over the next 12 months, reflecting more optimistic expectations.&nbsp;

The increased probability of a recession has intensified discussions about potential Federal Reserve actions. Expectations are growing for a possible rate cut of up to 50 basis points in the Fed's September meeting. Federal Reserve Chair Jerome Powell signalled in his recent Jackson Hole speech that a reduction in rates might be imminent.&nbsp;

UBS senior US economist Brian Rose noted the critical role of consumer spending in shaping future economic growth. He emphasised, "Continued income growth will be critical to keep spending rising since a steady savings rate is probably the best we can hope for." This revised outlook from UBS underscores the ongoing economic uncertainties and the potential need for further monetary adjustments to navigate the evolving economic landscape.&nbsp;

UBS Global Wealth Management has revised its forecast for a US recession, raising the probability from 20 per cent to 25 per cent, according to a Reuters report.

UBS Global Wealth Management has revised its forecast for a US recession, raising the probability from 20 per cent to 25 per cent, according to a Reuters report. This adjustment comes amid mounting worries about economic instability, driven primarily by underwhelming job growth and recent unemployment statistics. UBS's updated prediction reflects a deepening concern over the US economic landscape, which is currently characterised by uncertainty and signs of potential weakening. The increased likelihood of a recession underscores the challenges facing the economy, as recent data points suggest a less robust labour market and broader economic vulnerabilities. The firm's revised outlook suggests a growing recognition of the risks associated with the current economic environment and highlights the possibility of a downturn in the near future. In a note released on August 27, 2024, UBS cited recent data showing a significant slowdown in hiring and a rise in the unemployment rate to 4.3 per cent in July, its highest in nearly three years, as key factors influencing its revised forecast. The US Department of Labor's adjustment of total payroll employment by 818,000 for the year through March 2024 further fuelled recession fears, indicating fewer jobs were created than previously reported. UBS's new forecast aligns with broader economic uncertainty. Earlier this month, JPMorgan increased its recession probability for the year to 35 per cent, attributing this to easing labour market pressures. Conversely, Goldman Sachs reduced its recession probability to 20 per cent over the next 12 months, reflecting more optimistic expectations. The increased probability of a recession has intensified discussions about potential Federal Reserve actions. Expectations are growing for a possible rate cut of up to 50 basis points in the Fed's September meeting. Federal Reserve Chair Jerome Powell signalled in his recent Jackson Hole speech that a reduction in rates might be imminent. UBS senior US economist Brian Rose noted the critical role of consumer spending in shaping future economic growth. He emphasised, "Continued income growth will be critical to keep spending rising since a steady savings rate is probably the best we can hope for." This revised outlook from UBS underscores the ongoing economic uncertainties and the potential need for further monetary adjustments to navigate the evolving economic landscape.

UBS raises US recession probability amid economic concerns 

Buried deep in the minutes from the Federal Reserve's July 30-31 meeting, the central bank essentially declared victory in its battle against inflation.

The Federal Open Market Committee — the Fed's rate-making body — is pleased with the falling inflation rates and easing tightness in the US jobs market.

And they didn't see much in the orbit that might blow up their confidence.

In other words, there was far less need for the Fed to keep rates high.

In fact, minutes of the meeting, released Wednesday, show that some members thought the data they were seeing created "a plausible case for reducing the target range 25 basis points at this meeting."

But the FOMC blinked. But briefly.

Minutes make clear that the Committee voters saw the incoming data as strengthening their belief that inflation was moving toward the Committee's objective, and very few did not indicate that, if the data continued to come in about in line with expectations, it would likely be appropriate to ease policy at the next meeting.

So, there you have it: Short of economic disaster in the next few weeks, a rate cut is coming, probably at the next FOMC meeting on Sept. 17-18 and probably a quarter of a percentage point. That would bring the Fed's key interest rate — the federal funds rate — down from 5.25 per cent-to-5.5 per cent to 5 per cent-to-5.25 per cent.

Fed Chairman Jerome Powell may well talk about the July meeting when he speaks Friday at a symposium of central bankers in Jackson Hole, Wyo.

Buried deep in the minutes from the Federal Reserve's July 30-31 meeting, the central bank essentially declared victory in its battle against inflation. The Federal Open Market Committee — the Fed's rate-making body — is pleased with the falling inflation rates and easing tightness in the US jobs market.

Buried deep in the minutes from the Federal Reserve's July 30-31 meeting, the central bank essentially declared victory in its battle against inflation. The Federal Open Market Committee — the Fed's rate-making body — is pleased with the falling inflation rates and easing tightness in the US jobs market. And they didn't see much in the orbit that might blow up their confidence. In other words, there was far less need for the Fed to keep rates high. In fact, minutes of the meeting, released Wednesday, show that some members thought the data they were seeing created "a plausible case for reducing the target range 25 basis points at this meeting." But the FOMC blinked. But briefly. Minutes make clear that the Committee voters saw the incoming data as strengthening their belief that inflation was moving toward the Committee's objective, and very few did not indicate that, if the data continued to come in about in line with expectations, it would likely be appropriate to ease policy at the next meeting. So, there you have it: Short of economic disaster in the next few weeks, a rate cut is coming, probably at the next FOMC meeting on Sept. 17-18 and probably a quarter of a percentage point. That would bring the Fed's key interest rate — the federal funds rate — down from 5.25 per cent-to-5.5 per cent to 5 per cent-to-5.25 per cent. Fed Chairman Jerome Powell may well talk about the July meeting when he speaks Friday at a symposium of central bankers in Jackson Hole, Wyo.

Fed poised for rate cut as inflation victory nears

Global stocks dropped sharply on Friday with richly-valued tech firms taking much of the pain, as a US&nbsp;jobs&nbsp;report flagging unexpected economic weakness struck fear in markets already rattled by downbeat earnings updates from Amazon and Intel.

With thin summer trading likely exaggerating moves, a slump that began in Asia with a 5.8% drop for Japan's Nikkei, its biggest daily fall since March 2020 during the COVID-19 crisis, rippled through Europe and headed for Wall Street.

MSCI's global stock gauge dropped 0.8%, European shares fell 2%, the VIX stock market volatility measure, dubbed Wall Street's fear gauge, hit its highest since April and money poured into government bonds.

Friday's sell-down followed a softer-than-expected US&nbsp;factory activity survey and the monthly US&nbsp;non-farm payrolls report, which showed job growth slumped to 114,000 new hires in July from 179,000 in June.

Futures trading implied the US&nbsp;S&amp;P 500 share index would soon open 1.8% lower and the tech-heavy Nasdaq 100 would fall to at least 10% below its recent peak, the accepted definition of a stock market correction.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/intel-to-fire-over-17000-employees-suspend-dividend-as-growth-stalls-746491">Intel to fire over 17,000 employees, suspend dividend as growth stalls</a>

The US&nbsp;Federal Reserve has kept benchmark borrowing costs at a 23-year high of 5.25%-5.50% for a year, and some analysts believe the world's most influential central bank may have kept monetary policy tight for too long, risking a recession.

"The historical experience is that turnarounds in the labour market can occur quickly and brutally and that relatively moderate increases in unemployment have been enough to trigger recessions in the United States," SEB&nbsp;US&nbsp;economist Elisabet Kopelman said.

<h2>Trimming big tech positions</h2>

Money markets on Friday rushed to price a 70% chance of the Fed, which was already widely expected to cut rates from September, implementing a jumbo 50 basis points cut next month to insure against a downturn.

"That does feel like we have jumped the gun," Fidelity International fixed income manager Shamil Gohil said.

He added, however, that "we will also be watching for a rise in the unemployment rate which will give&nbsp;us&nbsp;clues about a weaker labour market and as a potential recessionary signal."

Shares in US&nbsp;chipmaker Intel tumbled more than 20% in pre-market trading on Friday after the group suspended its dividend and announced hefty job cuts alongside underwhelming earnings forecasts.

Artificial intelligence chipmaker Nvidia, one of the biggest contributors to the tech rally, dropped 4.1% pre-market and European tech stocks swooned 4.6% lower.

Nvidia, up more than 700% since January 2023, has left many asset managers with an outsized exposure to the fortunes of this single stock.

Steven Bell, chief economist for EMEA at asset manager Columbia Threadneedle, said that, while investors were trimming big tech positions to rebalance their portfolios, the US&nbsp;economy was not about to contract.

"Personally, I'm not thinking I should run for the hills," he said. "This is a slowdown, not a recession. And the background of lower interest rates, lower inflation and real wages rising because inflation is falling faster than wage growth, all of that's quite positive."

<h2>Buying safe havens</h2>

Safe-haven buying went full throttle on Friday, however, with government debt, gold, and currencies traditionally viewed as likely to hold value during market chaos all rallying.

The 10-year Treasury yield collapsed by 16 bps to 3.796%, putting the benchmark debt security on track for its best weekly rally since March 2020. Bond yields fall as prices of the securities rise.

The two-year yield, which typically reflects near-term interest rate expectations, dropped by a stunning 25 basis points to 3.9208%.

The 10-year German bund yield, a benchmark for euro zone debt costs, hit its lowest since March 2023, at 2.201%.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/money-wise-ola-electric-rides-ipo-market-heres-everything-you-need-to-know-before-investing-746495">Money-Wise: Ola Electric rides IPO market. Here's everything you need to know before investing</a>

In foreign exchange markets, the yen added 0.2% to 149.04 per dollar to extend a rapid bounce back for the weakened currency, given some relief this week by the Bank of Japan raising interest rates to levels unseen in 15 years.

Switzerland's franc touched its highest since early February, at 0.08698 per dollar, before settling back slightly to 0.871.

Sterling was on track for a 1% weekly drop against the dollar as traders speculated that the Bank of England would follow its first rate cut of this cycle on Thursday with another in November.

Commodity markets broadly displayed global growth fears as gold added 1.3% to $2,473 an ounce and Brent crude oil dropped 1.4% $78.11 a barrel, headed for a fourth successive weekly loss.

Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION&nbsp;audience. 
&nbsp;

Global stocks dropped sharply on Friday with richly-valued tech firms taking much of the pain, as a US jobs report flagging unexpected economic weakness struck fear in markets already rattled by downbeat earnings updates from Amazon and Intel.

Global stocks dropped sharply on Friday with richly-valued tech firms taking much of the pain, as a US jobs report flagging unexpected economic weakness struck fear in markets already rattled by downbeat earnings updates from Amazon and Intel. With thin summer trading likely exaggerating moves, a slump that began in Asia with a 5.8% drop for Japan's Nikkei, its biggest daily fall since March 2020 during the COVID-19 crisis, rippled through Europe and headed for Wall Street. MSCI's global stock gauge dropped 0.8%, European shares fell 2%, the VIX stock market volatility measure, dubbed Wall Street's fear gauge, hit its highest since April and money poured into government bonds. Friday's sell-down followed a softer-than-expected US factory activity survey and the monthly US non-farm payrolls report, which showed job growth slumped to 114,000 new hires in July from 179,000 in June. Futures trading implied the US S&P 500 share index would soon open 1.8% lower and the tech-heavy Nasdaq 100 would fall to at least 10% below its recent peak, the accepted definition of a stock market correction. Also Read | Intel to fire over 17,000 employees, suspend dividend as growth stalls The US Federal Reserve has kept benchmark borrowing costs at a 23-year high of 5.25%-5.50% for a year, and some analysts believe the world's most influential central bank may have kept monetary policy tight for too long, risking a recession. "The historical experience is that turnarounds in the labour market can occur quickly and brutally and that relatively moderate increases in unemployment have been enough to trigger recessions in the United States," SEB US economist Elisabet Kopelman said. Trimming big tech positions Money markets on Friday rushed to price a 70% chance of the Fed, which was already widely expected to cut rates from September, implementing a jumbo 50 basis points cut next month to insure against a downturn. "That does feel like we have jumped the gun," Fidelity International fixed income manager Shamil Gohil said. He added, however, that "we will also be watching for a rise in the unemployment rate which will give us clues about a weaker labour market and as a potential recessionary signal." Shares in US chipmaker Intel tumbled more than 20% in pre-market trading on Friday after the group suspended its dividend and announced hefty job cuts alongside underwhelming earnings forecasts. Artificial intelligence chipmaker Nvidia, one of the biggest contributors to the tech rally, dropped 4.1% pre-market and European tech stocks swooned 4.6% lower. Nvidia, up more than 700% since January 2023, has left many asset managers with an outsized exposure to the fortunes of this single stock. Steven Bell, chief economist for EMEA at asset manager Columbia Threadneedle, said that, while investors were trimming big tech positions to rebalance their portfolios, the US economy was not about to contract. "Personally, I'm not thinking I should run for the hills," he said. "This is a slowdown, not a recession. And the background of lower interest rates, lower inflation and real wages rising because inflation is falling faster than wage growth, all of that's quite positive." Buying safe havens Safe-haven buying went full throttle on Friday, however, with government debt, gold, and currencies traditionally viewed as likely to hold value during market chaos all rallying. The 10-year Treasury yield collapsed by 16 bps to 3.796%, putting the benchmark debt security on track for its best weekly rally since March 2020. Bond yields fall as prices of the securities rise. The two-year yield, which typically reflects near-term interest rate expectations, dropped by a stunning 25 basis points to 3.9208%. The 10-year German bund yield, a benchmark for euro zone debt costs, hit its lowest since March 2023, at 2.201%. Also Read | Money-Wise: Ola Electric rides IPO market. Here's everything you need to know before investing In foreign exchange markets, the yen added 0.2% to 149.04 per dollar to extend a rapid bounce back for the weakened currency, given some relief this week by the Bank of Japan raising interest rates to levels unseen in 15 years. Switzerland's franc touched its highest since early February, at 0.08698 per dollar, before settling back slightly to 0.871. Sterling was on track for a 1% weekly drop against the dollar as traders speculated that the Bank of England would follow its first rate cut of this cycle on Thursday with another in November. Commodity markets broadly displayed global growth fears as gold added 1.3% to $2,473 an ounce and Brent crude oil dropped 1.4% $78.11 a barrel, headed for a fourth successive weekly loss. Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

Fears for US economy drive tech-led global stock slump

Growth in worker productivity in the US gained steam, underscoring lighter labour-cost pressures and a better outlook for inflation. Nonfarm productivity, or the amount an hourly worker produces per hour, rose at an annualised rate of 2.3 per cent last quarter, the Labor Department's Bureau of Labor Statistics said. That was up from the 0.4 per cent growth pace in the January-March period, which was revised upward.

Economists surveyed by Reuters had estimated a 1.7 per cent productivity growth rate, following a previously reported 0.2 per cent rise in the first quarter. Over the past year, productivity has advanced at a robust 2.7 per cent pace.

Unit labour costs, which relate the price of labour to a single unit of output, advanced at a 0.9 per cent rate in the April-June quarter. The first quarter was revised down to indicate a 3.8 per cent increase in unit labour costs from the initially reported 4.0 per cent. On a year-over-year basis, labour costs advanced at a modest 0.5 per cent rate.

The government reported on Wednesday that annual labour costs posted their smallest increase in two and a half years in the second quarter. The Federal Reserve on Wednesday kept its benchmark overnight interest rate in a range of 5.25-5.50 per cent, where it has been since last July. The Fed has indicated it could reduce borrowing costs as soon as its next policy-setting meeting in September. 
&nbsp; 
Compensation for workers rose at a 3.3 per cent rate last quarter, down from the 4.2 per cent pace in quarter 1. Year over year, compensation advanced at a 3.2 per cent rate.

That means, all told, the productivity surge of the US workforce is very auspicious for the economy, keeping labour costs in check and supporting a benign outlook on inflation. Couple that with an ultra-cautious approach to interest rates by the Federal Reserve, and it points to a balanced path ahead for growth and stability.

Growth in worker productivity in the US gained steam, underscoring lighter labour-cost pressures and a better outlook for inflation. Nonfarm productivity, or the amount an hourly worker produces per hour, rose at an annualised rate of 2.

Growth in worker productivity in the US gained steam, underscoring lighter labour-cost pressures and a better outlook for inflation. Nonfarm productivity, or the amount an hourly worker produces per hour, rose at an annualised rate of 2.3 per cent last quarter, the Labor Department's Bureau of Labor Statistics said. That was up from the 0.4 per cent growth pace in the January-March period, which was revised upward. Economists surveyed by Reuters had estimated a 1.7 per cent productivity growth rate, following a previously reported 0.2 per cent rise in the first quarter. Over the past year, productivity has advanced at a robust 2.7 per cent pace. Unit labour costs, which relate the price of labour to a single unit of output, advanced at a 0.9 per cent rate in the April-June quarter. The first quarter was revised down to indicate a 3.8 per cent increase in unit labour costs from the initially reported 4.0 per cent. On a year-over-year basis, labour costs advanced at a modest 0.5 per cent rate. The government reported on Wednesday that annual labour costs posted their smallest increase in two and a half years in the second quarter. The Federal Reserve on Wednesday kept its benchmark overnight interest rate in a range of 5.25-5.50 per cent, where it has been since last July. The Fed has indicated it could reduce borrowing costs as soon as its next policy-setting meeting in September. Compensation for workers rose at a 3.3 per cent rate last quarter, down from the 4.2 per cent pace in quarter 1. Year over year, compensation advanced at a 3.2 per cent rate. That means, all told, the productivity surge of the US workforce is very auspicious for the economy, keeping labour costs in check and supporting a benign outlook on inflation. Couple that with an ultra-cautious approach to interest rates by the Federal Reserve, and it points to a balanced path ahead for growth and stability.

Surge in US worker productivity illuminates positive inflation trajectory

Interest rates of over two-decade highs in the US have impacted the broader economy. The Federal Reserve, in its fight against surging inflation, hiked rates aggressively to the highest in over 20 years. The rate hikes are starting to take a toll on the economy.

The Fed has managed to take the steam of an overheated US economy without pushing it into a recession. However, high interest rates are finally starting to show their effects. In the coming week, the Fed will likely keep rates on hold at its meeting.

Investors, though, are looking for a Fed pivot signal, with expectations for a start to rate cuts as early as September. Until then, though, policymakers need to assess the impact of monetary policy on the economy.

Hans Mikkelsen, managing director of credit strategy at TD Securities, said, ‘There's a tremendous amount of pain and many, many companies that are going bust because of the Fed's monetary policy.’&nbsp;

The US housing market was the most visibly affected by rate hikes. The Fed's policies caused borrowing costs to skyrocket and property prices to soar. The affordability of housing is at a level not seen in over 30 years of data. Usually, companies are less likely to invest and expand when interest rates are high, which acts as a brake on stock prices. But investors have mostly ignored the warnings, sending stock prices soaring to record highs.

Since the Fed began hiking rates in March 2022, the S&amp;P 500 has jumped by almost 25 per cent, increasing household wealth by around $3 trillion. However, households with higher incomes are benefiting from the booming stock market. However, there are signs of a slowing US jobs market, which repeatedly defied expectations of a downturn.

The number of people who have been unemployed for 27 weeks or longer reached 1.5 million in June. That marks the highest level since 2017, barring a brief surge during the pandemic. Many households, especially those with lower incomes are falling back on loan and credit card payments.&nbsp;

Smaller businesses are taking the biggest hit. Projections from Fitch Ratings indicate that the default rate on loans will rise to 5 per cent - 5.5 per cent this year. That would be the highest level since the financial crisis in 2009. Policymakers need to take note and act with caution before permanent economic damage is done.

Interest rates of over two-decade highs in the US have impacted the broader economy. The Federal Reserve, in its fight against surging inflation, hiked rates aggressively to the highest in over 20 years.

Interest rates of over two-decade highs in the US have impacted the broader economy. The Federal Reserve, in its fight against surging inflation, hiked rates aggressively to the highest in over 20 years. The rate hikes are starting to take a toll on the economy. The Fed has managed to take the steam of an overheated US economy without pushing it into a recession. However, high interest rates are finally starting to show their effects. In the coming week, the Fed will likely keep rates on hold at its meeting. Investors, though, are looking for a Fed pivot signal, with expectations for a start to rate cuts as early as September. Until then, though, policymakers need to assess the impact of monetary policy on the economy. Hans Mikkelsen, managing director of credit strategy at TD Securities, said, ‘There's a tremendous amount of pain and many, many companies that are going bust because of the Fed's monetary policy.’ The US housing market was the most visibly affected by rate hikes. The Fed's policies caused borrowing costs to skyrocket and property prices to soar. The affordability of housing is at a level not seen in over 30 years of data. Usually, companies are less likely to invest and expand when interest rates are high, which acts as a brake on stock prices. But investors have mostly ignored the warnings, sending stock prices soaring to record highs. Since the Fed began hiking rates in March 2022, the S&P 500 has jumped by almost 25 per cent, increasing household wealth by around $3 trillion. However, households with higher incomes are benefiting from the booming stock market. However, there are signs of a slowing US jobs market, which repeatedly defied expectations of a downturn. The number of people who have been unemployed for 27 weeks or longer reached 1.5 million in June. That marks the highest level since 2017, barring a brief surge during the pandemic. Many households, especially those with lower incomes are falling back on loan and credit card payments. Smaller businesses are taking the biggest hit. Projections from Fitch Ratings indicate that the default rate on loans will rise to 5 per cent - 5.5 per cent this year. That would be the highest level since the financial crisis in 2009. Policymakers need to take note and act with caution before permanent economic damage is done.

Impact of high interest rates on the US economy

The US economy grew more strongly than expected in the second quarter, at a robust annualised rate of 2.8 per cent, according to figures from the Commerce Department on Thursday.

This was a long way above expectations from economists who had been suggesting a 2.0 per cent growth rate, pointing to much more resilience than otherwise thought in the face of steep interest rate hikes that the Federal Reserve has applied over the past year.

That outperformance was all the more notable given the central bank's target of 1.8 per cent noninflationary growth.

But there was a silver lining for the Fed: the cooling of inflation, as measured by the core PCE price index—a key metric that strips out volatile food and energy components.

It decelerated to a 2.9 per cent rate from the previous quarter's 3.7 per cent, getting closer to the Fed's 2 per cent target.

One economist remarked, "The economy continues to outperform its global peers despite hefty rate hikes."

Resilience has been driven by a robust labour market, even as the unemployment rate edged up to a 2-1/2 year high of 4.1 per cent.

A combination of stronger-than-anticipated growth with softer core inflation set the stage for the Fed to lower interest rates as early as September.

There are now three full interest rate cuts priced into the financial market for the remainder of the year. The central bank gathers next week for its next policy meeting.

While the near-term economic outlook looks good, there are darker signs on the horizon. Indicators in the labour market show it cooling off, which could sap the steam of wage growth.

Also, the saving rate is still below its pre-pandemic levels, while the impact of the full force of the Fed's interest rate hikes remains in the future.

Economists also refer to the possibility of new tariffs in case of the re-election of former US President Donald Trump, which would disrupt the supply chains and discourage investment.

However, recession is not expected in the near time, and generally, the on-year outlook remains optimistic and underpinned by the easing of monetary policy anticipated this year.

(With inputs from Reuters)

The US economy grew more strongly than expected in the second quarter, at a robust annualised rate of 2.8 per cent, according to figures from the Commerce Department on Thursday.

The US economy grew more strongly than expected in the second quarter, at a robust annualised rate of 2.8 per cent, according to figures from the Commerce Department on Thursday. This was a long way above expectations from economists who had been suggesting a 2.0 per cent growth rate, pointing to much more resilience than otherwise thought in the face of steep interest rate hikes that the Federal Reserve has applied over the past year. That outperformance was all the more notable given the central bank's target of 1.8 per cent noninflationary growth. But there was a silver lining for the Fed: the cooling of inflation, as measured by the core PCE price index—a key metric that strips out volatile food and energy components. It decelerated to a 2.9 per cent rate from the previous quarter's 3.7 per cent, getting closer to the Fed's 2 per cent target. One economist remarked, "The economy continues to outperform its global peers despite hefty rate hikes." Resilience has been driven by a robust labour market, even as the unemployment rate edged up to a 2-1/2 year high of 4.1 per cent. A combination of stronger-than-anticipated growth with softer core inflation set the stage for the Fed to lower interest rates as early as September. There are now three full interest rate cuts priced into the financial market for the remainder of the year. The central bank gathers next week for its next policy meeting. While the near-term economic outlook looks good, there are darker signs on the horizon. Indicators in the labour market show it cooling off, which could sap the steam of wage growth. Also, the saving rate is still below its pre-pandemic levels, while the impact of the full force of the Fed's interest rate hikes remains in the future. Economists also refer to the possibility of new tariffs in case of the re-election of former US President Donald Trump, which would disrupt the supply chains and discourage investment. However, recession is not expected in the near time, and generally, the on-year outlook remains optimistic and underpinned by the easing of monetary policy anticipated this year. (With inputs from Reuters)

US economy surges in Q2, inflation eases, rate cut anticipation grows

Some 13,500 unionised hotel workers in four US cities are preparing strike authorisation votes next month as contract negotiations come to a standstill with Marriott International, Hilton Worldwide Holdings, and Hyatt Hotels Corp, the union said.

Until then, a workers' union that represents employees in hotels, casinos, and airports in the US and Canada, reported that voting will begin the first week in August in Boston, San Francisco, Honolulu and Providence, Rhode Island.

"We are getting ready," said Elena Duran, a server at Marriott's Palace Hotel in San Francisco. "Seeing the proposals from the hotels, people are not happy."

Workers at 125 hotels across these cities are negotiating new contracts — or picking up the pace on current negotiations — that broadly call for big pay raises. In addition to higher wages, they are pushing for better health care and retirement packages and are demanding hotel operators cease their pandemic-era cuts to both staff and services, including the frequency of room cleanings.

"Frankly, we were insulted with what they came to the table with," said Carlos Aramayo, president of UNITE HERE Local 26 in Boston. "We are very, very far apart from an agreement."

An additional 26,500 hospitality workers in 16 US cities, represented by UNITE HERE, are also bargaining new contracts.

"We are disappointed that several UNITE HERE locals have chosen to take strike votes," a spokesperson from Hyatt said.

The hotel operator said it has contingency plans in place in the event of a strike so that its hotel operations are not affected.

A spokesperson at Hilton underlined the relationship that the company has with the union as one of cooperation and productivity. Marriott did not respond to a request for comment.

The more the talks slog along and the frustration mounts, the more likely a strike seems. The results of these critical votes to authorise a strike will affect the future of labour relations in the industry and could leave thousands of workers on the picket lines, disrupting the operations of the major chains.

Some 13,500 unionised hotel workers in four US cities are preparing strike authorisation votes next month as contract negotiations come to a standstill with Marriott International, Hilton Worldwide Holdings, and Hyatt Hotels Corp, the union said.

Some 13,500 unionised hotel workers in four US cities are preparing strike authorisation votes next month as contract negotiations come to a standstill with Marriott International, Hilton Worldwide Holdings, and Hyatt Hotels Corp, the union said. Until then, a workers' union that represents employees in hotels, casinos, and airports in the US and Canada, reported that voting will begin the first week in August in Boston, San Francisco, Honolulu and Providence, Rhode Island. "We are getting ready," said Elena Duran, a server at Marriott's Palace Hotel in San Francisco. "Seeing the proposals from the hotels, people are not happy." Workers at 125 hotels across these cities are negotiating new contracts — or picking up the pace on current negotiations — that broadly call for big pay raises. In addition to higher wages, they are pushing for better health care and retirement packages and are demanding hotel operators cease their pandemic-era cuts to both staff and services, including the frequency of room cleanings. "Frankly, we were insulted with what they came to the table with," said Carlos Aramayo, president of UNITE HERE Local 26 in Boston. "We are very, very far apart from an agreement." An additional 26,500 hospitality workers in 16 US cities, represented by UNITE HERE, are also bargaining new contracts. "We are disappointed that several UNITE HERE locals have chosen to take strike votes," a spokesperson from Hyatt said. The hotel operator said it has contingency plans in place in the event of a strike so that its hotel operations are not affected. A spokesperson at Hilton underlined the relationship that the company has with the union as one of cooperation and productivity. Marriott did not respond to a request for comment. The more the talks slog along and the frustration mounts, the more likely a strike seems. The results of these critical votes to authorise a strike will affect the future of labour relations in the industry and could leave thousands of workers on the picket lines, disrupting the operations of the major chains.

Labour showdown looms in major US hotel chains

US economic growth blew past expectations in the second quarter, boosted by consumer spending and inventory building despite high interest rates,&nbsp;government data showed Thursday, after a slow start to the year.

The world's biggest economy grew 2.8 per cent in the April to June period, up from 1.4 per cent in the first three months this year, said the Commerce Department.

The figure was markedly above the 1.9 per cent rate economists anticipated -- a reassuring sign that consumption remains resilient.

Watch |&nbsp;US expected to surpass China in economic growth by 2031

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The acceleration "primarily reflected an upturn in private inventory investment and an acceleration in consumer spending," said the Commerce Department.

This was "partly offset by a downturn in residential fixed investment," it added.

While sectors like manufacturing and housing have been struggling after the Federal Reserve rapidly hiked interest rates in 2022 to combat surging inflation, consumption has been stronger than analysts expected.

<a href="https://www.wionews.com/business-economy/us-economy-slows-amid-import-surge-inflation-accelerates-715182">Also read |&nbsp;US economy slows amid import surge; inflation accelerates</a>

This gave the economy a boost despite rates hovering at their highest levels in more than two decades, making borrowing more expensive for individuals and companies.

A key factor underpinning consumption has been the robust labour market, which saw continued wage growth and businesses reluctant to let go of workers after difficulties in hiring during the pandemic.

Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

US economic growth blew past expectations in the second quarter, boosted by consumer spending and inventory building despite high interest rates, government data showed Thursday, after a slow start to the year.

US economic growth blew past expectations in the second quarter, boosted by consumer spending and inventory building despite high interest rates, government data showed Thursday, after a slow start to the year. The world's biggest economy grew 2.8 per cent in the April to June period, up from 1.4 per cent in the first three months this year, said the Commerce Department. The figure was markedly above the 1.9 per cent rate economists anticipated -- a reassuring sign that consumption remains resilient. Watch | US expected to surpass China in economic growth by 2031 × The acceleration "primarily reflected an upturn in private inventory investment and an acceleration in consumer spending," said the Commerce Department. This was "partly offset by a downturn in residential fixed investment," it added. While sectors like manufacturing and housing have been struggling after the Federal Reserve rapidly hiked interest rates in 2022 to combat surging inflation, consumption has been stronger than analysts expected. Also read | US economy slows amid import surge; inflation accelerates This gave the economy a boost despite rates hovering at their highest levels in more than two decades, making borrowing more expensive for individuals and companies. A key factor underpinning consumption has been the robust labour market, which saw continued wage growth and businesses reluctant to let go of workers after difficulties in hiring during the pandemic. Disclaimer: This story has been published from a news agency feed with minimal edits to adhere to WION's style guide. The headline may have been changed to better reflect the content of the story or to make it more suitable for WION audience.

Beating expectations, US economy grew at 2.8% in latest quarter

US retail sales were unchanged last month as a drop in receipts at auto dealers was offset by gains elsewhere, a sign consumers remain resilient and are helping to support second-quarter economic growth.

While the retail sales figure was unchanged, it had an upward revision to 0.3 per cent for May from an originally reported flat performance, the Commerce Department said. The report did little to change expectations that the Federal Reserve would start cutting interest rates as early as September as the economy cools and inflation stays low. The report allayed fears of a sharp slowdown in the world's largest economy.

"The economy is in pretty good shape, there are signs of softness around the edges where low and moderate-income consumers are pulling back. But openhanded spending by affluent consumers is keeping the economy as a whole moving forward," Bill Adams, chief economist at Comerica Bank said.

The economists had expected retail sales, which are mostly goods and not adjusted for inflation, to decline 0.3 per cent, building off a previously reported 0.1 per cent gain in May. Retail sales climbed 2.3 per cent year over year in June, but it is also the slowest pace of growth since the 7.7 per cent year-to-year gain in January 2023.

Consumers, suffering through a spell of high inflation, have been reaching for cheaper alternatives, earnings reports from big retailers and manufacturers showed on Thursday. Lower-income consumers were "stretched" and being very careful with their budgets to try and get by, said Ramon Laguarta, the CEO of PepsiCo Inc.

Internet shopping melted 1.9 per cent in June, building on a 1.1 per cent gain in May. Sales at gasoline stations fell 3.0 per cent, which might have been because of lower nickel prices. To some degree, this reduced price of factors likely freed up cash for other expenditures.

Sales at building material and garden equipment stores added 1.4 per cent, while food services and drinking places - a key measure of household spending -- rose 0.3 per cent after a 0.4 per cent advance in May. Sales at furniture stores rose 0.6 per cent, and sales at electronics and appliance stores were up 0.4 per cent. Clothing retailers, however, rose 0.6 per cent, sporting goods, hobby, musical instrument and bookstore sales edged down 0.1 per cent.

Receipts at motor vehicles and parts dealers fell 2.0 percent, as a result of a cyberattack that hindered the normal running of several auto dealerships in the latter half of June at software provider CDK.

Retail sales, excluding automobiles, gasoline stations, building materials, and food services, rose 0.9 per cent last month after an unrevised 0.4 per cent increase in May. Core retail sales, excluding automobiles, gasoline stations, building materials, and food services, rose 0.9 per cent last month after an unrevised 0.4 per cent rise in May. These so-called core retail sales most directly correspond to the consumer spending component of gross domestic product.

Overall consumer spending, representing over two-thirds of the economy, is now expected to expand at an annualized 2.0 per cent growth rate in the second quarter of the year, up from prior expectations for a gain of 1.5 per cent. The forecast is that overall economic growth in April-June will be about a 2 per cent growth rate -- down from a 1.4 per cent increase in the first quarter.

"The all-important US consumer, while increasingly discerning regarding purchases, continues to spend at a resilient pace," said Quincy Krosby, chief global strategist at LPL Financial. 
Consumer spending, however, appears less propitious. Most families have spent extraneous savings built up during the COVID-19 pandemic and accumulated large credit card debt, which is becoming very expensive as interest rates continue to rise. Wage growth is also slowing down, as the labour market eases. Consumer spending, nevertheless, stays brisk enough to keep expanded economic activity.

US retail sales were unchanged last month as a drop in receipts at auto dealers was offset by gains elsewhere, a sign consumers remain resilient and are helping to support second-quarter economic growth.

US retail sales were unchanged last month as a drop in receipts at auto dealers was offset by gains elsewhere, a sign consumers remain resilient and are helping to support second-quarter economic growth. While the retail sales figure was unchanged, it had an upward revision to 0.3 per cent for May from an originally reported flat performance, the Commerce Department said. The report did little to change expectations that the Federal Reserve would start cutting interest rates as early as September as the economy cools and inflation stays low. The report allayed fears of a sharp slowdown in the world's largest economy. "The economy is in pretty good shape, there are signs of softness around the edges where low and moderate-income consumers are pulling back. But openhanded spending by affluent consumers is keeping the economy as a whole moving forward," Bill Adams, chief economist at Comerica Bank said. The economists had expected retail sales, which are mostly goods and not adjusted for inflation, to decline 0.3 per cent, building off a previously reported 0.1 per cent gain in May. Retail sales climbed 2.3 per cent year over year in June, but it is also the slowest pace of growth since the 7.7 per cent year-to-year gain in January 2023. Consumers, suffering through a spell of high inflation, have been reaching for cheaper alternatives, earnings reports from big retailers and manufacturers showed on Thursday. Lower-income consumers were "stretched" and being very careful with their budgets to try and get by, said Ramon Laguarta, the CEO of PepsiCo Inc. Internet shopping melted 1.9 per cent in June, building on a 1.1 per cent gain in May. Sales at gasoline stations fell 3.0 per cent, which might have been because of lower nickel prices. To some degree, this reduced price of factors likely freed up cash for other expenditures. Sales at building material and garden equipment stores added 1.4 per cent, while food services and drinking places - a key measure of household spending -- rose 0.3 per cent after a 0.4 per cent advance in May. Sales at furniture stores rose 0.6 per cent, and sales at electronics and appliance stores were up 0.4 per cent. Clothing retailers, however, rose 0.6 per cent, sporting goods, hobby, musical instrument and bookstore sales edged down 0.1 per cent. Receipts at motor vehicles and parts dealers fell 2.0 percent, as a result of a cyberattack that hindered the normal running of several auto dealerships in the latter half of June at software provider CDK. Retail sales, excluding automobiles, gasoline stations, building materials, and food services, rose 0.9 per cent last month after an unrevised 0.4 per cent increase in May. Core retail sales, excluding automobiles, gasoline stations, building materials, and food services, rose 0.9 per cent last month after an unrevised 0.4 per cent rise in May. These so-called core retail sales most directly correspond to the consumer spending component of gross domestic product. Overall consumer spending, representing over two-thirds of the economy, is now expected to expand at an annualized 2.0 per cent growth rate in the second quarter of the year, up from prior expectations for a gain of 1.5 per cent. The forecast is that overall economic growth in April-June will be about a 2 per cent growth rate -- down from a 1.4 per cent increase in the first quarter. "The all-important US consumer, while increasingly discerning regarding purchases, continues to spend at a resilient pace," said Quincy Krosby, chief global strategist at LPL Financial. Consumer spending, however, appears less propitious. Most families have spent extraneous savings built up during the COVID-19 pandemic and accumulated large credit card debt, which is becoming very expensive as interest rates continue to rise. Wage growth is also slowing down, as the labour market eases. Consumer spending, nevertheless, stays brisk enough to keep expanded economic activity.

US retail sales hold steady in June amid mixed sector performance

US producer prices increased in June continuing the trend of easing inflation that is strengthening expectations for a Federal Reserve interest rate cut in September.

The producer price index (PPI) is a measure of wholesale inflation.

It rose 0.2 per cent in June following flat reading in May.

This, according to the Labor Department's Bureau of Labor Statistics. The increase was slightly higher than the 0.1 per cent forecast by economists.

The 12-month PPI inflation rate climbed to 2.6 per cent in June. It was up from 2.4 per cent in May. However, this remains well below the highs seen earlier this year.

This news comes on the heels of Thursday's report showing a decline in consumer prices for the first time in four years.

The decline was driven by lower gasoline costs. There was a broad slowdown in the prices of goods and services including rent.

The combination of tame inflation data and a recent rise in the unemployment rate to a 2-and-a-half-year high of 4.1 per cent leads economists and financial markets to believe the Fed will cut interest rates in September.

Another reduction by year-end will potentially follow this action.

During his congressional testimony this week Federal Reserve Chair Jerome Powell acknowledged the improving inflation picture. However, he also expressed concerns about potential labour market weakness.

He stated, "We have seen considerable softening."

The Fed has kept its benchmark interest rate unchanged since last July. It has remained within the current range of 5.25 per cent to 5.50 per cent.

Since 2022 the central bank has raised rates by 5.25 percentage points. However, the recent economic data suggests a shift in policy direction.

This shift may be on the horizon.

(With inputs from Reuters)

US producer prices increased in June continuing the trend of easing inflation that is strengthening expectations for a Federal Reserve interest rate cut in September.

US producer prices increased in June continuing the trend of easing inflation that is strengthening expectations for a Federal Reserve interest rate cut in September. The producer price index (PPI) is a measure of wholesale inflation. It rose 0.2 per cent in June following flat reading in May. This, according to the Labor Department's Bureau of Labor Statistics. The increase was slightly higher than the 0.1 per cent forecast by economists. The 12-month PPI inflation rate climbed to 2.6 per cent in June. It was up from 2.4 per cent in May. However, this remains well below the highs seen earlier this year. This news comes on the heels of Thursday's report showing a decline in consumer prices for the first time in four years. The decline was driven by lower gasoline costs. There was a broad slowdown in the prices of goods and services including rent. The combination of tame inflation data and a recent rise in the unemployment rate to a 2-and-a-half-year high of 4.1 per cent leads economists and financial markets to believe the Fed will cut interest rates in September. Another reduction by year-end will potentially follow this action. During his congressional testimony this week Federal Reserve Chair Jerome Powell acknowledged the improving inflation picture. However, he also expressed concerns about potential labour market weakness. He stated, "We have seen considerable softening." The Fed has kept its benchmark interest rate unchanged since last July. It has remained within the current range of 5.25 per cent to 5.50 per cent. Since 2022 the central bank has raised rates by 5.25 percentage points. However, the recent economic data suggests a shift in policy direction. This shift may be on the horizon. (With inputs from Reuters)

Producer prices rise modestly, bolstering case for Fed rate cut in September

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts.

The Bureau of Labor Statistics reported Thursday that the all-items seasonally adjusted consumer price index dropped 0.1 per cent in June after it was unchanged the previous month.

It's the second month in a row with low readings in core CPI, boosting confidence among Federal Reserve officials that inflation is finally cooling.

The broad CPI rose 3.0 per cent in the 12 months through June, compared with a 3.3 per cent increase in May.

It is the weakest annual rise in a year. Economists surveyed by Reuters had expected a 0.1 per cent gain for June and a year-over-year increase of 3.1 per cent, showing how much of a surprise came in the figures.

The annual rise in consumer prices was at 9.1 per cent in June 2022, but the CPI remains significantly higher than measures monitored by the Federal Reserve for its 2 per cent inflation goal.

Other important measures for the Fed, PCE price indexes, climbed 2.6 per cent in May.

This also comes a few days after news that the unemployment rate ticked higher to 4.1 per cent in June from 4.0 per cent in May, which has not been this high since March 2020.

At the same time, economic growth has cooled in response to aggressive rate hikes by the Fed in 2022 and 2023.

Second-quarter gross domestic product is forecasted to rise at an annualised 1.8 per cent, well below the level concluded as strong enough to increase inflation, as considered by policymakers.

Although Federal Reserve Chair Jerome Powell acknowledged recent positive trends in price pressures, he remained cautious.

He told lawmakers this week that he wouldn't declare victory over inflation, saying "more good data would strengthen" the case for rate cuts.

With financial markets and many economists now considering that labour markets are cooling down and that the economy is slowing, they expect the Federal Reserve to kick off its easing cycle in September.

The central bank has left its benchmark overnight interest rate in the 5.25 per cent-5.50 per cent range since last July, following a 525 basis point hike to its policy rate since 2022.

Excluding food and energy—the two most volatile components—the CPI rose 0.1 per cent, following a 0.2 per cent increase in May.

A year ago, core CPI rose 3.3 per cent versus a 3.4 per cent increase in May, underscoring expectations that underlying inflationary pressures are continuing to cool.

(With inputs from Reuters)

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts.

In a surprising turn of events, US consumer prices fell marginally, highlighting the view that the disinflationary trend is getting firmer and puts the Federal Reserve closer to interest rate cuts. The Bureau of Labor Statistics reported Thursday that the all-items seasonally adjusted consumer price index dropped 0.1 per cent in June after it was unchanged the previous month. It's the second month in a row with low readings in core CPI, boosting confidence among Federal Reserve officials that inflation is finally cooling. The broad CPI rose 3.0 per cent in the 12 months through June, compared with a 3.3 per cent increase in May. It is the weakest annual rise in a year. Economists surveyed by Reuters had expected a 0.1 per cent gain for June and a year-over-year increase of 3.1 per cent, showing how much of a surprise came in the figures. The annual rise in consumer prices was at 9.1 per cent in June 2022, but the CPI remains significantly higher than measures monitored by the Federal Reserve for its 2 per cent inflation goal. Other important measures for the Fed, PCE price indexes, climbed 2.6 per cent in May. This also comes a few days after news that the unemployment rate ticked higher to 4.1 per cent in June from 4.0 per cent in May, which has not been this high since March 2020. At the same time, economic growth has cooled in response to aggressive rate hikes by the Fed in 2022 and 2023. Second-quarter gross domestic product is forecasted to rise at an annualised 1.8 per cent, well below the level concluded as strong enough to increase inflation, as considered by policymakers. Although Federal Reserve Chair Jerome Powell acknowledged recent positive trends in price pressures, he remained cautious. He told lawmakers this week that he wouldn't declare victory over inflation, saying "more good data would strengthen" the case for rate cuts. With financial markets and many economists now considering that labour markets are cooling down and that the economy is slowing, they expect the Federal Reserve to kick off its easing cycle in September. The central bank has left its benchmark overnight interest rate in the 5.25 per cent-5.50 per cent range since last July, following a 525 basis point hike to its policy rate since 2022. Excluding food and energy—the two most volatile components—the CPI rose 0.1 per cent, following a 0.2 per cent increase in May. A year ago, core CPI rose 3.3 per cent versus a 3.4 per cent increase in May, underscoring expectations that underlying inflationary pressures are continuing to cool. (With inputs from Reuters)

US consumer prices decline, bringing Fed closer to rate cuts

As Biden faces donor backlash after a ‘disappointing’ election debate with Donald Trump, we turn the spotlight on the influence of donors in US Elections.

Two things dictate election outcomes: money &amp; sentiment.

While sentiments are mostly controlled by managing social media narratives and shifting blame.

Money can make or break a political party in real-time.

Biden’s political campaign is a prime example.

Biden has enjoyed monetary support from major businesses &amp; Hollywood investors.

But now that support is waning, as donors demand a replacement.

How will that affect Biden, who is currently working on reviving his image on social media?

Political donations provide the necessary funds for candidates to run effective campaigns, covering costs for advertising, staff, events, and outreach efforts.

The influence of donors extends beyond financial contributions,

They often sway over campaign priorities and candidate positioning on key issues.

Biden’s loss is Trump’s gain.

The former president has gained a significant financial edge over Biden.

In the second quarter, trump raised 331 million dollars, surpassing Biden’s 264 million dollars.

This fund surge includes a substantial 50 million dollar donation from Timothy Mellon and additional support from other high-profile donors.

Trump's increasing financial resources contrast sharply with Biden’s situation, where the drying up of donor funds has heightened democratic anxiety.

As the election approaches, both campaigns are vying for the crucial support of their wealthy backers, which could ultimately determine the outcome in November.

But the main question is? Can Biden’s funding exodus hurt his political prospects?

It helped Barack Obama, who secured over 500 million dollars more than Republicans in 2008, and over 250 million dollars in 2012.

The number of donors also increased considerably, with over 500,000 more donors in 2012 compared to 2008.

Over the decades, the role of donors in presidential campaigns has evolved significantly.

The emergence of super political action committees in 2010 reshaped the fundraising landscape,

Allowing donors to contribute unlimited amounts to support candidates indirectly.

In recent election cycles, these super PACs have become major players, wielding substantial financial influence through extensive advertising campaigns and grassroots mobilisation efforts.

Along with the wealthy donors, individual donors have also become important contributors.

For example, in the 2016 election cycle, 71 per cent of Hillary Clinton’s total fundraising and 40 per cent of Donald Trump's came from individual donors.

This number has only increased since then.

This reflects a trend where wealthy contributors and individuals play a critical role in financing campaigns, shaping policy agendas, and influencing voter perceptions.

The ability to attract and retain donor support often determines a candidate's financial viability and electoral competitiveness.

As Biden faces donor backlash after a ‘disappointing’ election debate with Donald Trump, we turn the spotlight on the influence of donors in US Elections. Two things dictate election outcomes: money & sentiment.

As Biden faces donor backlash after a ‘disappointing’ election debate with Donald Trump, we turn the spotlight on the influence of donors in US Elections. Two things dictate election outcomes: money & sentiment. While sentiments are mostly controlled by managing social media narratives and shifting blame. Money can make or break a political party in real-time. Biden’s political campaign is a prime example. Biden has enjoyed monetary support from major businesses & Hollywood investors. But now that support is waning, as donors demand a replacement. How will that affect Biden, who is currently working on reviving his image on social media? Political donations provide the necessary funds for candidates to run effective campaigns, covering costs for advertising, staff, events, and outreach efforts. The influence of donors extends beyond financial contributions, They often sway over campaign priorities and candidate positioning on key issues. Biden’s loss is Trump’s gain. The former president has gained a significant financial edge over Biden. In the second quarter, trump raised 331 million dollars, surpassing Biden’s 264 million dollars. This fund surge includes a substantial 50 million dollar donation from Timothy Mellon and additional support from other high-profile donors. Trump's increasing financial resources contrast sharply with Biden’s situation, where the drying up of donor funds has heightened democratic anxiety. As the election approaches, both campaigns are vying for the crucial support of their wealthy backers, which could ultimately determine the outcome in November. But the main question is? Can Biden’s funding exodus hurt his political prospects? It helped Barack Obama, who secured over 500 million dollars more than Republicans in 2008, and over 250 million dollars in 2012. The number of donors also increased considerably, with over 500,000 more donors in 2012 compared to 2008. Over the decades, the role of donors in presidential campaigns has evolved significantly. The emergence of super political action committees in 2010 reshaped the fundraising landscape, Allowing donors to contribute unlimited amounts to support candidates indirectly. In recent election cycles, these super PACs have become major players, wielding substantial financial influence through extensive advertising campaigns and grassroots mobilisation efforts. Along with the wealthy donors, individual donors have also become important contributors. For example, in the 2016 election cycle, 71 per cent of Hillary Clinton’s total fundraising and 40 per cent of Donald Trump's came from individual donors. This number has only increased since then. This reflects a trend where wealthy contributors and individuals play a critical role in financing campaigns, shaping policy agendas, and influencing voter perceptions. The ability to attract and retain donor support often determines a candidate's financial viability and electoral competitiveness.

Financial flux: Donor dynamics shift election landscape

The Dow Jones Industrial Average and the S&amp;P 500 were indecisive, whereas investors in the Nasdaq digested mixed payrolls data for clues into possible policy adjustments by the Federal Reserve. In contrast, the Nasdaq is lifted by the gains of big technology stocks.

Futures were off to a higher start right after the US Labour Department released its highly anticipated employment report, which showed that the unemployment rate climbed to 4.1 per cent in June from the expected holding at 4 per cent. The employment report also showed that non-farm payrolls rose by 206,000 in June, topping the expected 190,000 gain. May's payrolls were revised down drastically to 218,000 from the previously reported 272,000.

The average hourly earnings came in line, growing 0.3 per cent in June from the previous month, a deceleration from May's 0.4 per cent gain. Emily Bowersock Hill, chief executive of Bowersock Capital Partners, called the report "relatively benign", noting the job gains were better than anticipated, but the data was less concerning than the figures released in May. If you're the Fed, you're saying—what happened in May is not quite as hot as we thought. The data isn't bad enough to alarm markets and not bad enough to worry the Fed," she said.

The Treasury yields dropped after the data release and helped to lift rate-sensitive mega-cap stocks, including Apple, Amazon, and Meta Platforms, all rising between 0.7 per cent and 2.2 per cent. Alphabet rose 1.6 per cent to an all-time high. Utilities and consumer discretionary stocks were among the top sectoral gainers, while energy dropped.

The probability of a 25-basis point rate cut in September rose to roughly 75 per cent following the payrolls data, according to LSEG. Traders kept their bets for about two rate cuts this year.

Tesla's shares, which had reached their highest since early January on Wednesday, turned down from early gains and dropped 0.6 per cent. Other economic data this week pointed to a slowing US economy, leading market watchers to boost bets on multiple rate cuts in 2019. The S&amp;P 500 and the Nasdaq both notched record closing highs during Wednesday's abbreviated session. Light overall trading volume persisted throughout the week as the US market closed Thursday for US Independence Day.

At 9:50 a.m. ET, the Dow Jones had shed 33.29 points to 39,274.71, or 0.08 per cent. The S&amp;P 500 added 0.80 points, or 0.01 per cent, to 5 537.82, and the Nasdaq Composite surged 41.80 points, or 0.23 per cent, to 18,230.10. All three major Wall Street indexes were on pace for weekly gains. Of course, with second-quarter earnings due to start in the coming weeks, it is unsettled whether the Wall Street rally will carry on beyond its handful of giant mega-cap stocks and whether their earnings reflect the justification for their high valuation.

Macy's shares meanwhile rocketed by 10 per cent after a report that Arkhouse Management and Brigade Capital increased their bid for buying out the department store chain group for about $6.9 billion.

Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE and a 1.51-to-1 ratio on the Nasdaq. The S&amp;P index recorded 12 new 52-week highs and six new lows, while the Nasdaq noted 18 new highs and 54 new lows.

(With inputs from Reuters)

The Dow Jones Industrial Average and the S&P 500 were indecisive, whereas investors in the Nasdaq digested mixed payrolls data for clues into possible policy adjustments by the Federal Reserve.

The Dow Jones Industrial Average and the S&P 500 were indecisive, whereas investors in the Nasdaq digested mixed payrolls data for clues into possible policy adjustments by the Federal Reserve. In contrast, the Nasdaq is lifted by the gains of big technology stocks. Futures were off to a higher start right after the US Labour Department released its highly anticipated employment report, which showed that the unemployment rate climbed to 4.1 per cent in June from the expected holding at 4 per cent. The employment report also showed that non-farm payrolls rose by 206,000 in June, topping the expected 190,000 gain. May's payrolls were revised down drastically to 218,000 from the previously reported 272,000. The average hourly earnings came in line, growing 0.3 per cent in June from the previous month, a deceleration from May's 0.4 per cent gain. Emily Bowersock Hill, chief executive of Bowersock Capital Partners, called the report "relatively benign", noting the job gains were better than anticipated, but the data was less concerning than the figures released in May. If you're the Fed, you're saying—what happened in May is not quite as hot as we thought. The data isn't bad enough to alarm markets and not bad enough to worry the Fed," she said. The Treasury yields dropped after the data release and helped to lift rate-sensitive mega-cap stocks, including Apple, Amazon, and Meta Platforms, all rising between 0.7 per cent and 2.2 per cent. Alphabet rose 1.6 per cent to an all-time high. Utilities and consumer discretionary stocks were among the top sectoral gainers, while energy dropped. The probability of a 25-basis point rate cut in September rose to roughly 75 per cent following the payrolls data, according to LSEG. Traders kept their bets for about two rate cuts this year. Tesla's shares, which had reached their highest since early January on Wednesday, turned down from early gains and dropped 0.6 per cent. Other economic data this week pointed to a slowing US economy, leading market watchers to boost bets on multiple rate cuts in 2019. The S&P 500 and the Nasdaq both notched record closing highs during Wednesday's abbreviated session. Light overall trading volume persisted throughout the week as the US market closed Thursday for US Independence Day. At 9:50 a.m. ET, the Dow Jones had shed 33.29 points to 39,274.71, or 0.08 per cent. The S&P 500 added 0.80 points, or 0.01 per cent, to 5 537.82, and the Nasdaq Composite surged 41.80 points, or 0.23 per cent, to 18,230.10. All three major Wall Street indexes were on pace for weekly gains. Of course, with second-quarter earnings due to start in the coming weeks, it is unsettled whether the Wall Street rally will carry on beyond its handful of giant mega-cap stocks and whether their earnings reflect the justification for their high valuation. Macy's shares meanwhile rocketed by 10 per cent after a report that Arkhouse Management and Brigade Capital increased their bid for buying out the department store chain group for about $6.9 billion. Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE and a 1.51-to-1 ratio on the Nasdaq. The S&P index recorded 12 new 52-week highs and six new lows, while the Nasdaq noted 18 new highs and 54 new lows. (With inputs from Reuters)

Dow and S&P 500 struggle as investors weigh mixed payrolls data

Prices of oil plummeted at the beginning of the trading session on Thursday from weak US employment and business activity data, which points to the fact that the world's largest consumer of oil is witnessing a cooling in the economy.

By 0030 GMT, Brent crude futures dipped 30 cents, or 0.34 per cent, to $87.04 a barrel, while US West Texas Intermediate (WTI) crude futures dropped 32 cents, or 0.38 per cent, to $83.56. Reduced activity due to the US Fourth of July holiday also had an effect on the market.

Recent data has contributed to fears that the US economy is losing momentum. First-time applications for unemployment benefits rose last week and the number of people on jobless rolls hit a 2-1/2-year high through late June. The ADP Employment report showed private payrolls increased by 150,000 in June; however this is below the 160,000 consensus and May's 157,000 rise.

As if the economic worry did not have enough variables, the ISM Non-Manufacturing Index, which is a barometer of activity in the US service sector, fell to a four-year low of 48.8 in June, far below the consensus of 52.5, driven by a steep decrease in orders.

While that is weaker in terms of economic data, analysts indicate that this may actually strengthen the case for the Federal Reserve to cut interest rates, together with lower rates that can prompt demand for enhanced oil markets.

"The direction of recent data conforms to the Fed's easing bias," ANZ Research analysts said in a note. "A slowdown in growth momentum will support disinflationary impulses in coming months, paving the way for the Fed to cut rates."

Prices of oil plummeted at the beginning of the trading session on Thursday from weak US employment and business activity data, which points to the fact that the world's largest consumer of oil is witnessing a cooling in the economy.

Prices of oil plummeted at the beginning of the trading session on Thursday from weak US employment and business activity data, which points to the fact that the world's largest consumer of oil is witnessing a cooling in the economy. By 0030 GMT, Brent crude futures dipped 30 cents, or 0.34 per cent, to $87.04 a barrel, while US West Texas Intermediate (WTI) crude futures dropped 32 cents, or 0.38 per cent, to $83.56. Reduced activity due to the US Fourth of July holiday also had an effect on the market. Recent data has contributed to fears that the US economy is losing momentum. First-time applications for unemployment benefits rose last week and the number of people on jobless rolls hit a 2-1/2-year high through late June. The ADP Employment report showed private payrolls increased by 150,000 in June; however this is below the 160,000 consensus and May's 157,000 rise. As if the economic worry did not have enough variables, the ISM Non-Manufacturing Index, which is a barometer of activity in the US service sector, fell to a four-year low of 48.8 in June, far below the consensus of 52.5, driven by a steep decrease in orders. While that is weaker in terms of economic data, analysts indicate that this may actually strengthen the case for the Federal Reserve to cut interest rates, together with lower rates that can prompt demand for enhanced oil markets. "The direction of recent data conforms to the Fed's easing bias," ANZ Research analysts said in a note. "A slowdown in growth momentum will support disinflationary impulses in coming months, paving the way for the Fed to cut rates."

Oil spill amid signs of US economic slowdown

Governor&nbsp;Gavin Newsom signed California's budget on Saturday, which covers an estimated $46.8 billion deficit with a mix of $16 billion worth of spending cuts and temporary tax increases on some businesses. This comes just days after lawmakers approved the budget Wednesday after very intense negotiations between the state's governor and legislative leaders. The strain brought about requirements for concessions on both sides and shelved some progressive policies for a second year in a row.

“This is a responsible budget that prepares for the future while investing in foundational programs that benefit millions of Californians every day,” Newsom said in a statement. “Thanks to careful stewardship of the budget over the past few years, we’re able to meet this moment while protecting our progress on housing, homelessness, education, health care and other priorities that matter deeply to Californians.”

The deficit, projected to be roughly $32 billion in 2023, has ballooned this year, with expectations of continuing shortfalls in the future for the country's most populous state. This budget signing comes just two years after Newsom and Democratic lawmakers heralded record surpluses topping more than $100 billion. Those surpluses were supercharged off billions of dollars in federal COVID-19 aid and a progressive tax code that generated major revenue from the state's wealthiest residents.

The economic landscape has changed radically. Inflation has slowed the economy, increasing unemployment and bringing reversals to the technology sector, one of the major drivers of growth for California. In addition, the Newsom administration miscalculated the state's revenue following a seven-month delay in the tax filing deadline.

The budget of California has swung wildly over the years, given its reliance on its wealthiest taxpayers. This current deficit is an inopportune challenge for Newsom as he raises his national profile for a potential presidential run and seeks to be a chief surrogate for President Joe Biden's campaign.

The newly signed budget incorporates a provision in which it is agreed that Gov. Newsom and lawmakers will lobby to amend the state's constitution to reserve more money for savings to cushion future fiscal shortfalls. This call is, therefore, for a more stable financial base for the state moving into the future.

The Republicans have complained of being left out of the negotiations. They attacked a temporary increase in tax on businesses, affecting those with at least $1 million in revenue. That increase is scheduled to last three years and would produce more than an added $5 billion for the state next year. Republicans also criticised reductions in social safety net programs that they said would harm vulnerable populations.

The budget illustrates how tough it is going to be to strike a balance between addressing immediate financial problems and trying to cope with long-term fiscal health. As California navigates these economic uncertainties, the decisions made in this budget will have significant implications for the state's future.

Governor Gavin Newsom signed California's budget on Saturday, which covers an estimated $46.8 billion deficit with a mix of $16 billion worth of spending cuts and temporary tax increases on some businesses.

Governor Gavin Newsom signed California's budget on Saturday, which covers an estimated $46.8 billion deficit with a mix of $16 billion worth of spending cuts and temporary tax increases on some businesses. This comes just days after lawmakers approved the budget Wednesday after very intense negotiations between the state's governor and legislative leaders. The strain brought about requirements for concessions on both sides and shelved some progressive policies for a second year in a row. “This is a responsible budget that prepares for the future while investing in foundational programs that benefit millions of Californians every day,” Newsom said in a statement. “Thanks to careful stewardship of the budget over the past few years, we’re able to meet this moment while protecting our progress on housing, homelessness, education, health care and other priorities that matter deeply to Californians.” The deficit, projected to be roughly $32 billion in 2023, has ballooned this year, with expectations of continuing shortfalls in the future for the country's most populous state. This budget signing comes just two years after Newsom and Democratic lawmakers heralded record surpluses topping more than $100 billion. Those surpluses were supercharged off billions of dollars in federal COVID-19 aid and a progressive tax code that generated major revenue from the state's wealthiest residents. The economic landscape has changed radically. Inflation has slowed the economy, increasing unemployment and bringing reversals to the technology sector, one of the major drivers of growth for California. In addition, the Newsom administration miscalculated the state's revenue following a seven-month delay in the tax filing deadline. The budget of California has swung wildly over the years, given its reliance on its wealthiest taxpayers. This current deficit is an inopportune challenge for Newsom as he raises his national profile for a potential presidential run and seeks to be a chief surrogate for President Joe Biden's campaign. The newly signed budget incorporates a provision in which it is agreed that Gov. Newsom and lawmakers will lobby to amend the state's constitution to reserve more money for savings to cushion future fiscal shortfalls. This call is, therefore, for a more stable financial base for the state moving into the future. The Republicans have complained of being left out of the negotiations. They attacked a temporary increase in tax on businesses, affecting those with at least $1 million in revenue. That increase is scheduled to last three years and would produce more than an added $5 billion for the state next year. Republicans also criticised reductions in social safety net programs that they said would harm vulnerable populations. The budget illustrates how tough it is going to be to strike a balance between addressing immediate financial problems and trying to cope with long-term fiscal health. As California navigates these economic uncertainties, the decisions made in this budget will have significant implications for the state's future.

California's budget tightrope: balancing cuts, taxes, and future stability amid economic shifts

Consumer confidence in the US fell this month as expectations for business conditions, jobs, and personal incomes dimmed. The Conference Board's index fell to 100.4 from a revised 101.3 in May, data released Tuesday showed. That compared with the median estimate of 100 in a Bloomberg survey of economists. 
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The expectations index, which measures consumers' views over the next six months, dropped almost two points to 73; the present conditions index rose from May's revised reading. 
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Consumer confidence has been quite depressed over the last couple of years, as consumers are facing a higher cost of living, high borrowing costs, and a recent softening in the labour market. Business conditions in the next six months are expected to improve according to only 12.5 per cent of consumers, the lowest proportion since 2011. 
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“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labour market views continued to outweigh concerns about the future,” Dana Peterson, chief economist at the Conference Board, said in a statement. “However, if material weaknesses in the labour market appear, confidence could weaken as the year progresses.” 
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Concern about prices moderated slightly this month, but consumers still feel that grocery prices are high. Inflation data for the month of May indicates there is a broad reduction in price increases across the board for US consumers. 
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Consumers also scaled back plans to buy motor vehicles and major appliances, often financed, as well. However, more indicated the intention to take vacations in the second half of the year, with a greater proportion planning domestic travel. 
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Consumer's view of the current labour market picked up slightly. About 38.1 per cent said jobs were "plentiful," up from 37 per cent in May, while few consumers said jobs were "hard to get." The gap between those numbers rose for the first time since the start of the year, a more important gauge of labour market health. 
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The mixed signals from the economy have left consumer confidence in a state of flux. While a subset of the elements constituting the economy is getting better, there are still enough concerns regarding future conditions and inflation. Further, into the year, improvements in the labour market and overall economic trends will be crucial for consumer outlook and confidence.

Consumer confidence in the US fell this month as expectations for business conditions, jobs, and personal incomes dimmed. The Conference Board's index fell to 100.

Consumer confidence in the US fell this month as expectations for business conditions, jobs, and personal incomes dimmed. The Conference Board's index fell to 100.4 from a revised 101.3 in May, data released Tuesday showed. That compared with the median estimate of 100 in a Bloomberg survey of economists. The expectations index, which measures consumers' views over the next six months, dropped almost two points to 73; the present conditions index rose from May's revised reading. Consumer confidence has been quite depressed over the last couple of years, as consumers are facing a higher cost of living, high borrowing costs, and a recent softening in the labour market. Business conditions in the next six months are expected to improve according to only 12.5 per cent of consumers, the lowest proportion since 2011. “Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labour market views continued to outweigh concerns about the future,” Dana Peterson, chief economist at the Conference Board, said in a statement. “However, if material weaknesses in the labour market appear, confidence could weaken as the year progresses.” Concern about prices moderated slightly this month, but consumers still feel that grocery prices are high. Inflation data for the month of May indicates there is a broad reduction in price increases across the board for US consumers. Consumers also scaled back plans to buy motor vehicles and major appliances, often financed, as well. However, more indicated the intention to take vacations in the second half of the year, with a greater proportion planning domestic travel. Consumer's view of the current labour market picked up slightly. About 38.1 per cent said jobs were "plentiful," up from 37 per cent in May, while few consumers said jobs were "hard to get." The gap between those numbers rose for the first time since the start of the year, a more important gauge of labour market health. The mixed signals from the economy have left consumer confidence in a state of flux. While a subset of the elements constituting the economy is getting better, there are still enough concerns regarding future conditions and inflation. Further, into the year, improvements in the labour market and overall economic trends will be crucial for consumer outlook and confidence.

US consumer confidence falls as outlook weakens on economy

The housing slump in the US continues. Existing home sales slumped for a third consecutive month in May as record-high prices and rising mortgage rates kept potential buyers at bay. This comes as the <a href="https://www.wionews.com/business-economy/us-labour-market-continues-to-cool-amid-housing-struggles-733607">labour market</a> continues to ease.

The housing inventory hit a two-year high last month. This supply can potentially offset rising costs and improve affordability. However, addressing high mortgage rates is crucial for housing market recovery. The average rate on the popular 30-year fixed mortgage raced to a six-month high in early May.

Home sales dropped 0.7 per cent to an annual rate of 4.11 million units. This is above the economists' predictions but is still a considerable drop.

US Federal Reserve's hawkish stance also plays a role. The decision to maintain interest rates comes amid a 'wait-and-watch' approach, as the central bank waits for economic cues to normalise. This could be a gamble since geopolitical turmoil, which adds to the bearish outlook, continues to hurt consumer sentiments.

However, a recent S&amp;P survey found a silver lining for the US economy and a potential boost for the Fed's policies. The survey finds that expansion in June is set to hit a 2-year high. Employment also surged for the first time in three months. The survey signals a rosy outlook and robust economic recovery for the US by year-end. This surge in optimism is led by a manufacturing rebound. The survey highlights that the 'slow and steady' economic growth aligns with the Fed's expectations to begin rate cuts later in the year.

Still, the housing market continues to hurt the US economic recovery.

The housing slump in the US continues. Existing home sales slumped for a third consecutive month in May as record-high prices and rising mortgage rates kept potential buyers at bay.

The housing slump in the US continues. Existing home sales slumped for a third consecutive month in May as record-high prices and rising mortgage rates kept potential buyers at bay. This comes as the labour market continues to ease. The housing inventory hit a two-year high last month. This supply can potentially offset rising costs and improve affordability. However, addressing high mortgage rates is crucial for housing market recovery. The average rate on the popular 30-year fixed mortgage raced to a six-month high in early May. Home sales dropped 0.7 per cent to an annual rate of 4.11 million units. This is above the economists' predictions but is still a considerable drop. US Federal Reserve's hawkish stance also plays a role. The decision to maintain interest rates comes amid a 'wait-and-watch' approach, as the central bank waits for economic cues to normalise. This could be a gamble since geopolitical turmoil, which adds to the bearish outlook, continues to hurt consumer sentiments. However, a recent S&P survey found a silver lining for the US economy and a potential boost for the Fed's policies. The survey finds that expansion in June is set to hit a 2-year high. Employment also surged for the first time in three months. The survey signals a rosy outlook and robust economic recovery for the US by year-end. This surge in optimism is led by a manufacturing rebound. The survey highlights that the 'slow and steady' economic growth aligns with the Fed's expectations to begin rate cuts later in the year. Still, the housing market continues to hurt the US economic recovery.

US economy to rebound in 2024? Housing market struggles, manufacturing rebounds

The number of Americans enrolling for unemployment benefits slowed for the first time last week. This highlights a continued trend of the job market cooling down.

This comes as the housing market struggles under high interest rates. Permit applications for future residential building projects fell to their lowest level in about four years.

Loosening the labour market has offset inflation pressures, and financial markets now anticipate one or more rate cuts this year despite the Fed's hawkish stance. The US Fed has maintained its benchmark interest rate since July of last year.

But the Fed's decision is keeping the housing market under pressure. The policy has kept borrowing costs elevated for home purchases. Overall homebuilding starts fell 5.5 per cent last month to the lowest level since June 2020. This was led by a sharp drop in multi-family projects. Single-family housing, accounting for the bulk of homebuilding, also slumped 5.2 per cent. The overall sentiment among homebuilders also weakened this month.

This data came on a day when US stock markets touched record highs. This was boosted by strong gains in AI tech stocks, led by Nvidia. Investor optimism on an AI-led stock rally continues to power the S&amp;P 500 &amp; Nasdaq to new highs.

Meanwhile, Unemployment rose to 4 per cent in May for the first time since January 2022.

The number of Americans enrolling for unemployment benefits slowed for the first time last week. This highlights a continued trend of the job market cooling down.

The number of Americans enrolling for unemployment benefits slowed for the first time last week. This highlights a continued trend of the job market cooling down. This comes as the housing market struggles under high interest rates. Permit applications for future residential building projects fell to their lowest level in about four years. Loosening the labour market has offset inflation pressures, and financial markets now anticipate one or more rate cuts this year despite the Fed's hawkish stance. The US Fed has maintained its benchmark interest rate since July of last year. But the Fed's decision is keeping the housing market under pressure. The policy has kept borrowing costs elevated for home purchases. Overall homebuilding starts fell 5.5 per cent last month to the lowest level since June 2020. This was led by a sharp drop in multi-family projects. Single-family housing, accounting for the bulk of homebuilding, also slumped 5.2 per cent. The overall sentiment among homebuilders also weakened this month. This data came on a day when US stock markets touched record highs. This was boosted by strong gains in AI tech stocks, led by Nvidia. Investor optimism on an AI-led stock rally continues to power the S&P 500 & Nasdaq to new highs. Meanwhile, Unemployment rose to 4 per cent in May for the first time since January 2022.

US labour market continues to cool amid housing struggles

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