Chris Rugaber
@ChrisRugaber
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Covering the Federal Reserve and the economy for the Associated Press. I root for the economy. Contact me on Signal at ChrisRugaber.01 and at [email protected].
Joined December 2010
Overheard in the newsroom: . "I just got something from a vanilla company. I guess 70% of the world's supply comes from Madagascar. We are going to have months and months worth of stories out of this. Hard to even know where to begin.". (Magagascar now facing 47% tariffs).
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Heck of a footnote in that Fed paper: "I leave aside the deeper concern that the primary role of mainstream economics in our society is to provide an apologetics for a criminally oppressive, unsustainable, and unjust social order."
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This chart, from @greg_ip in the WSJ, echoes the surveys of people who say their own finances are fine but the broader economy is bad. Here, it appears all the swing states are in good economic shape but the nation as a whole is somehow a mess:
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Wow Fed pushing back on Mnuchin: "The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.".
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From my bike ride this morning. Asked the protestor if I could take his photo, he said yes. Said I was sorry about everything; he said, “it’s your dream too.”
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The 4.8M job gains are good, but they appear to be nearly all recalls of temporarily-laid off workers. Permanent layoffs grew by another 600K. Before pandemic, that was a big number. #JobsReport.
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Worker shortages aren't much about "no one wants to work anymore," but a surge in retirements, according to recent Federal Reserve research cited by Chair Powell. It has had a big impact on their thinking. That research includes this chart: 🧵
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The U.S. has now just in the past few weeks lost nearly 10 million jobs, more than the 8.7 million lost in the Great Recession. Wow.
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3.4 million now say they are on permanent layoff, up from 2.9 million in July.
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WASHINGTON (AP) — Chicago Federal Reserve President Austan Goolsbee warned Wednesday that the Fed needs to cut its key interest rate before the job market weakened further or it would risk moving too late and potentially imperil the economy.
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Morgan Stanley revising forecast for Q4 growth to 1.7%, from 0.7%, in wake of unexpectedly strong retail sales report.
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Labor Department is broadening unemployment aid to include those who've turned down jobs because they weren't going to be adequately protected from COVID; news to come.
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Powell on extra $300 in jobless aid: "We can't really see a difference between states that haven't eliminated that.".
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Moody's Analytics' Mark Zandi says one-fifth of economy - manufacturing, farming, and shipping - is essentially in recession. #economy.
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Wages and salaries were up 1.5% in the third quarter, the highest on records dating back 20 years.
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Sen. Warren to Jerome Powell: "You know what's worse than high inflation with low unemployment? High inflation and a recession with millions of people out of work. I hope you consider that before you drive the US economy off a cliff.".
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Re: NYT scoop on WH limiting UI data: This is from Ohio agency: "We have been instructed by the [DOL] to embargo all daily unemployment claims data until after the national claims report is released. New weekly data in Ohio (and from any other state)" held til Thurs at 8:30 am.
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For all the talk of snarled supply chains, this is really interesting from Wells Fargo: Ports of LA and Long Beach are moving more cargo than ever, it's just they can't keep up with the demand.
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Bush says Fla. added 1.3M jobs but housing bubble was big driver - 3/4 jobs were gone 3 yrs later #GOPdebate: http://t.co/czzZXCTCvX.
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Both WH adviser Jared Bernstein and Richmond Fed Pres. Tom Barkin have cited a key reason inflation is down and likely to fall further: Consumers' unwillingness to pay high prices. Barkin: "I think consumers have gotten to the point where they’re just not accepting it." A 🧵.
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Consumer expectations for the economy falling at all income levels, according to the UMich survey update today:
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There is finally some disinflation happening. One key metric - prices excluding food, energy, and shelter: DOWN 0.1% in October from September, first monthly decline since May 2020. Y-o-y still up 5.9%, the lowest since Nov. 2021.
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Mixed messages: Biden calls the idea that his proposed higher corp. tax will cause some cos to relocate overseas "bizarre." At same time, Yellen is urging G20 to negotiate a global minimum corporate tax precisely to prevent businesses from seeking lower tax rates overseas.
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The fall of Rudy Giuliani: How ‘America’s mayor’ tied his fate to Donald Trump and got indicted (from @AP)
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Consumer spending report shows Americans are reducing savings to keep up with higher prices; saving rate fell to 4.4% in April, lowest since Sept. 2008.
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This is not a "media" problem; no one in so-called "mainstream media" is reporting things like this. For example:
New Harris-Guardian poll:. - 56% say US is in recession (reality: 7 straight quarters of positive GDP growth).- 49% say stocks are down YTD (reality: S&P500 up 12%).- 49% say unemployment at a 50-year high (reality: U3 has been under 4% longer than any period since the 1960s)
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Restaurant closures hit software firm, an example of how layoffs spread. .
Restaurant software provider Toast cuts 50% of staff as coronavirus forces eateries to close
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Bright spot in jobs report: Employers lifted wages 3.4% from a year earlier, largest gain in a decade. Still below typical gains in healthy economy of 4-4.5%.
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Fed governor Lisa Cook on American's negative economic outlook: . "Most Americans are not looking for disinflation [slower inflation]. They're looking for deflation. They want these prices to be back to where they were before the pandemic. I hear that from my family.".
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Sen. John Kennedy's office formally says that he will support Judy Shelton's nomination in the committee vote tomorrow, which means she almost certainly will be forwarded to full Senate. #Fed.
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Just a few months after a $15 an hour minimum wage failed in Congress, companies are increasingly adopting it to hire and keep workers: .
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Really surprised this point by @JosephPolitano isn't taking a higher profile in the "greedflation" debate:
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Arizona now the 13th state to say it will cut off the extra $300 in weekly jobless aid. It will throw in a $2,000 back to work bonus; it is keeping the two expanded federal programs.
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Really, really surprised to see the layoffs at @WSJ and particularly the specific names. Some very good econ reporters were let go. All as the economy is likely to be a key issue in the upcoming election. 😰😲🤯.
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Retail gain of 50,000 mostly reflects seasonal adjustments - the sector didn't hire as many as usual so didn't lay off as many. Construction adds most since March 2007, before recession #JobsReport.
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This data is freaking me out: There are 8x as many people receiving jobless aid as last time unemployment was this level:. Nov. 2014: .U rate: 5.8%.25-54 yr olds working: 76.9%.# receiving unemployment: 2.1mil. Apr 2021: .U rate: 6.1%.25-54s working: 76.9%.# receiving aid: 16 mil.
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Solid jobs report: Underemployment (U-6) falls to 17-year low of 7.5 percent as number of involuntary part-time workers falls. #JobsReport #nfpguesses.
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Am honored to be a 2023 Loeb Award Finalist in Beat Reporting for a series of stories from last year's Fed meeting at Jackson Hole. The first of 3 stories was about the inequality that is so evident in Teton County, the richest U.S. county by far (1/x): .
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What’s on Janet Yellen’s bookshelf? Bob Woodward’s “Fear,” hmm, Tim Geithner’s “Stress Test,” and Bernanke’s memoirs. Any others?
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“Two days after the election, there was no discussion of Trump having won the state during the meeting of Republican operatives. Instead, parts of the meeting focus on … packing up campaign offices and… final reports.” @sbauerAP
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Story by me: "In a stark sign of economic inequality . Americans as a whole are now earning the same amount in wages and salaries that they did before the virus struck — even with nearly 9 million fewer people working."
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These charts from a Fed paper, "The Great Retirement Boom," are pretty illustrative: . The paper is at:
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Chamber of Commerce weighs in, in support of the Fed's emergency lending programs:
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Judy Shelton's nomination has been formally withdrawn, per White House:
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As we note in Fed setup story today, Chair Powell sees labor shortages as another supply shock, but unlike other shocks, there's little sign of improvement. That means the Fed has to bring labor demand down to lower supply, as Powell said at Brookings.
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What's kept US retail spending healthy, even with higher prices and interest rates? Upper- and middle-income households, Federal Reserve research finds, particularly those flush with housing and stock market wealth. 1/2
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Powell acknowledges the economy will need more than the Fed: "Fiscal policy does play a major role when there is a downturn. You've seen that in past downturns." #FederalReserve.
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This is the Energizer bunny economy. US retail sales this morning are solid: . _ Retail spending up 0.4%, higher than August's 0.1%._ Sales at clothing stores, grocers, health care and sporting goods outlets all climbed. _ Restaurant sales up 1%, solid discretionary spending.
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Trump cites "motor city revving engines," though US auto sales actually slipped in 2017 after huge gains in 2016. #APFactCheck.
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GDP has contracted for six months, Americans are gloomy about the economy, while hiring has been strong. Nothing is simple about the post-pandemic economy: .
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Hate speech posted on economics website is traced to some leading universities, research finds. @paulgp @florianederer .
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Number of people working part-time involuntarily - ie, they want a full-time job - fell by more than 500k in past year. Should be sign of labor demand, assuming they are now full-time. #JobsReport.
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“The changes announced today by the Federal Reserve are long overdue and a good start but don’t go far enough,” said @DennisKelleher, president of @BetterMarkets.
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The expansion is now entering its 11th year and is the longest period of US growth on record. Still, middle-income Americans haven't recovered all the wealth they lost in the Great Recession. Only the top 30% have.
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Ebay is blaming its 1,000 layoffs on a "challenging macroeconomic environment." . Meanwhile, GDP expanded at a 4.9% annual pace in the third quarter and Atlanta Fed forecasts it grew 2.4% in 4th quarter (1st report on that tomorrow).
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Day after Trump leaves Paris pact, Walmart touts effort to cut g'house gases 1 billion tons by 2030 #walmartshares
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One last thing from this story: Meet Rocky Harper, 44, from Tuscon, who makes $800 a week at a package delivery company, and who illustrates how inflation can in some ways hit lower-income people harder than others (1/x).
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Has large student debt forced you to avoid credit cards, even home-buying? If so, I'd like to hear more: email crugaber@ap.org.
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Based on interviews with the unemployed, feel like we need a new category for labor force participation -- something like, "in labor force, but searching for only remote work.".
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Big drop in involuntary part-time workers, suggests businesses finally converting them to full-time as unemployed pool falls. #Jobs.
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Biden on Elon Musk's economic worries, just now: He notes that Ford and Stellantis (formerly Chrysler) are investing in EV manufacturing: "Lots of luck on his trip to the moon, I don't know.".
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@TheStalwart Fed Governor Lisa Cook's take today: . "Most Americans are not looking for disinflation [slower inflation]. They're looking for deflation. They want these prices to be back to where they were before the pandemic. I hear that from my family.".
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The two-speed, unequal recovery: The proportion of home buyers that are purchasing 2nd homes rose to 15% in July, back to pre-pandemic levels.
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Are you sick with COVID, missing work and not getting paid? If so, would love to speak with you for a story. Email me at crugaber@ap.org.
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Can it really be true that only 28% of New York Times readers recognized a photo of Jerome Powell? And yet that was more than correctly identified Zendaya?
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After 10 years of recession and slow recovery, employers re-learing the basics of labor market: (From Fed's Beige Book):
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Realized with a start on my birthday yesterday that I am no longer in the prime-age workforce! Oh well, 55 is the new 40. Doing my part to boost 55-64 EPOP. (How econ geeks think about their birthdays).
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As Dow 20,00 is celebrated, let's keep in mind the 10 percent wealthiest Americans own 81.4 percent of stock market wealth.
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Canadian flight bookings to US for this summer have plunged 70%. From Torsten Slok at Apollo:
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St. Louis Fed President James Bullard back on hawkish beat today: "Markets are underpricing the risk that the FOMC will have to be more aggressive rather than less aggressive in order to contain the very substantial inflation that we have in the US.".
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Powell in Denver: "We've learned that the unemployment rate can be lower than we anticipated. I balk at the idea that we're running the economy hot, this feels very sustainable.".
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Whoah: JPMorgan now saying that a 1 percentage point hike on Wednesday "is a non-trivial risk" because 0.75 ppts would no longer be a surprise.
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How does the government drive down prices in a “capitalist way”?
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Powell asked at @WSJ forum - What if your rate hikes destabilize financial markets, without bringing down inflation much? Powell: "I don't see that happening.".
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This story turned out to be pretty relevant, it seems: .
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Paul and I in an English pub in Sorrento ready to watch Italy v Croatia. Go Azzurri!
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Atlanta Fed President Raphael Bostic said in an interview with The AP that rate cuts may come "sooner than I would have thought before.". "I've got more confidence that we are likely to get to our target for inflation. And we’ve seen labor markets weaken considerably." 1/n.
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Had his catalytic converter stolen, costing him $1,300, after moving to a new neighborhood to save on rent. He and his fiancee have delayed getting married. His $800 paycheck -- he is supplementing with gig work -- “used to be really good money and is now just above dirt-poor.”.
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Fewer foreign students paying full cost = Americans paying more. Plus, foreign students studying in US counts as export, reducing deficit.
Universities are already feeling the effects of Trump and Brexit in their application numbers
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"My plan starts with a simple proposition: Respect the Fed," Biden said. "Respect the Fed and its independence.".
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Are you working part-time, but can't get more hours or find a full-time job? If so, I'd like to hear your story: email me - crugaber@ap.org.
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Big jump in women's labor force participation, among women 20 & over. It will be critical for women to come back into workforce to drive ongoing hiring.
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As @Claudia_Sahm has tweeted, Fed staff are almost certainly scouring granular local data now - they have local industrial production data, and the spending data I wrote about here: #coronavirus #FedCut .
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Are you looking for work, seeing lots of job ads but not getting much response? If so, would love to discuss: Email me crugaber@ap,org; Thx.
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Key potential silver lining in all the layoffs, which we write about here: Some companies are trying to keep links with laid-off workers, which would ease rehiring and speed a recovery:
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Hotel and restaurant workers heavily represented in jobless claims, Labor Department says; but broadening to more industries, including retail, construction, wholesale.
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Our poll was spot on in April when it found 78% of laid-off workers thought their job losses were temporary; the BLS jobs report had the same figure; AP-NORC poll now says nearly half think their job loss is permanent.
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With this jobs report, the economy has recovered all the private-sector jobs lost to the pandemic recession (government jobs still lag). This does not include, the jobs that would normally have been created in the past 2 years; but this is faster than previous recoveries.
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Powell clearly expects workers in restaurants, travel, hotels, etc. to stay unemployed for an extended period and thinks government should support them until they are recalled or can transition to new jobs.
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1st quarter GDP shows economy shrank 0.3% at AR. But under hood things look better: . _ Consumer spending and biz investment up 3%._ Consumer spending by itself slowed to 1.8% growth, from 4% in previous quarter._ This quarter all about front-running tariffs - 41.3% import surge.
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The richest one-tenth of households captured nearly three-quarters of the growth in wealth in the ten-year expansion:
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"Race is a variable that economists are lazy about,” said Raphael Bostic, Atlanta Fed president and 1st Black president of a regional bank in 108-year history of Fed. From Minneapolis Fed session on #RaceandEconomics, with @drlisadcook and @wspriggs.
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