Investors cheered weaker-than-expected job numbers, which suggest inflation is abating. Voters will be harder to please.
. When a reporter asked if the US economy was entering a period of stagflation, Powell said, “I don’t see the stag or the 'flation.”, as the term arose in Britain in the 1960s and the United States in the 1970s, refers to a struggling economy with inflation and unemployment rates both near or in the double digits. Today, inflation is 3.5% and unemployment is 3.9%, which is why Powell scoffed at the idea.
The great economic surprise of 2023 is that the economy did not cool down, even as the Fed jacked up rates. GDP adjusted for inflationBut now the slowdown may finally have arrived. First quarter GDP growth slowed to a 1.6% annual pace. The April job numbers are the lowest since last October and much more normal than the elevated growth of much of the last two years. “The labor market is cooling slowly from being overheated,” Capital Economics explained in a May 3 research note.
Now there are nascent signs that workers are beginning to notice a tightening labor market. In Conference Board consumer surveys, the portion saying jobs are plentiful has fallen this year, while the share saying jobs are hard to get has risen. If that trend continues, voters might start to punish Biden for a tougher job market before they start to credit him for falling inflation.
Jerome Powell Biden Consumer Confidence Index Inflation Rate Stagflation Wage Growth Gas Prices Federal Reserve Board
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
This week in Bidenomics: Battle of the bridgesA key Biden ally thinks he spends too much time touting infrastructure voters don't much care about. Left unsolved: What should Biden be doing instead?
Read more »
Bidenomics: Energy Prices Skyrocket Nearly 30% Under Biden, 13 times Faster Than Previous 7 YearsA look at how energy price inflation, driven by 'climate crisis' policies, is impacting California and the United Kingdom....versus Ohio, where fossil fuel based energy is leading to a decrease in electricity prices.
Read more »
This week in Bidenomics: Inflation staycationThe disappearance of inflation is one break President Biden seems unlikely to get in his reelection bid.
Read more »
GE, 3M Spinoffs Join S&P 500, Divide Investors Over ValuationGE and 3M spinoffs have been added to the S&P 500 index, causing a divide among investors over their valuation. Israel's Gantz has called for early elections, increasing tensions with Netanyahu. Ray Dalio defends his long-term investment in China. Mining for EV metals in Africa threatens gorillas and chimpanzees. Apollo is in talks to finance a renewed offer for Neiman by Saks. Trump is trying to court Palm Beach billionaires as the power of his rallies fades. Business bankruptcies are increasing as a slow wave of failure speeds up. Telecom Italia may receive €1 billion from Italy after a ruling. L'Oreal is considering acquiring a stake in the €3 billion perfume brand Amouage. A survey finds that nearly half of Canadians feel stuck at work. It's time to shift parked RRSP contributions into drive. Food waste is no longer an option as grocery prices rise and budgets tighten. Dale Jackson discusses tax tools that can help keep more money invested. Financial commentators suggest tapping into home equity for retirement income. A study finds that using emojis in service transactions can increase tipping by up to 30%. Learn how to avoid financial scams.
Read more »
Elliott's Cohn says Etsy offers significant, multi-year upside for investorsElliott Investment Management's managing director Jesse Cohn said on Wednesday he believes e-commerce platform Etsy will generate 'significant, multi-year...
Read more »
Analysis-Peltz loses at Disney but his investors win; changes may still be aheadExplore stories from Atlantic Canada.
Read more »