The US Federal Reserve may have successfully engineered a "soft landing" for the US economy by reducing inflation without causing a recession, leading to hopes that interest rates will not need to rise further and may even be cut next year. The positive news has boosted US stocks, but it remains to be seen if President Biden will benefit politically. Meanwhile, the UK's economic condition is worse than that of the US, with lower growth and a lack of stimulus options, leading to concerns for the country's inflation battle.
Consumer prices in the US remained steady in October, with lower gas prices offsetting increases in other areas of the economy, according to the Consumer Price Index (CPI); however, turkey prices for Thanksgiving are expected to be 22% cheaper this year.
Cities like Houston, Dallas, Nashville, and Miami are emerging as new economic powerhouses in the US, with economic power shifting from coastal cities like New York and San Francisco due to factors such as cost of living, quality of life, and governance differentials.
The producer price index fell 0.5% in October, the largest decrease since April 2020, due to a drop in energy and food prices, indicating soft inflation in the pipeline.
The October Consumer Price Index (CPI) report shows a slowdown in inflation, with prices still rising but at a lower rate, leading to speculation that the Federal Reserve may not increase interest rates at its next meeting.
The New York Fed's Empire State business conditions index, a gauge of manufacturing activity in the state, saw a significant increase in November, reaching its highest level since April, suggesting a potential stabilization in the factory sector; however, details beneath the headline were not as strong, showing weaker new orders, unfilled orders, and expectations for the future.
Economists warn of risks to the global economy in 2023, including geopolitical tensions and persisting inflationary pressures, which could impact the workplace by cooling wage growth, making jobs harder to find, and reducing access to benefits, according to a report from Glassdoor.
Millions of Americans have experienced a pay cut due to high inflation, making them worse off than two years ago, despite rising wages, and leading to growing pessimism about their financial situation under President Biden's economic policies.
Ethio Lease, Ethiopia's only foreign-owned equipment leasing company, is winding down its operations in the country due to amendments in the central bank's directive that made it impossible for the company to write new leases.
Despite inflation slowing and wages rising, individuals should still exercise caution with their spending during the Christmas party season as prices continue to rise and the financial pressure on households remains high, with millions of people facing difficulties in paying for necessities such as energy bills and essential services, according to official data and charities.
China's Belt and Road Initiative (BRI) has led to developing countries owing $1.1 trillion to China, as 155 countries sign up to improve their trade opportunities, potentially challenging the dominance of the US dollar.
Despite recent data showing that inflation has eased and prices overall did not increase between September and October, public opinion towards President Joe Biden and the Federal Reserve continues to decline due to the fact that prices remain higher than pre-pandemic levels and are unlikely to return to previous levels.
The average cost of a Thanksgiving meal for 10 people has dropped 4.5% from last year, totaling $61.17, primarily due to lower turkey prices, although it is still 25% higher than in 2019.
The future of the US economy may lie in cities like Houston, Dallas, Miami, and Nashville, as economic and societal power shifts away from coastal cities to metropolitan areas in the Sunbelt region.
The UK government claims success in halving inflation, but economists argue that it is not due to government policy and is primarily driven by global factors such as lower energy costs and easing global inflationary pressures. The responsibility for managing and regulating inflation lies with the Bank of England, while the government has control over fiscal policy through measures such as taxes and spending. One potential factor contributing to lower inflation is the increase in income tax, which leaves less money for households to spend and reduces upward pressure on prices.
JPMorgan CEO Jamie Dimon believes that people are overreacting to short-term numbers regarding inflation and that inflation may persist longer than expected.
Ethiopia has reached an agreement in principle with its official bilateral creditors on an interim debt-service suspension and will begin negotiations to restructure a $1 billion Eurobond maturing next year due to economic pressures caused by inflation, currency shortages, and mounting debt repayments.
UK inflation fell to its lowest rate in two years in October, driven by lower energy prices, meeting the government's pledge to halve inflation by the end of the year; however, economists argue that energy price decreases and the Bank of England's interest rate hikes played a more significant role in the decline than government policies.
Inflation in Britain slowed to its lowest level in two years, with consumer prices rising 4.6 percent in October, driven by lower energy bills and a drop in household energy costs, while policymakers continue to monitor other measures of domestic price pressures and wage growth.
Despite positive movement in the stock market, a "death cross" on the Dow Jones Industrial Average has spooked traders and raised fears of a major drop, with the pattern historically being an indicator of an impending downturn.
Asian stocks surge to two-month highs on the expectation of stimulus in China and an end to rate hikes in the United States, while the dollar suffers losses after a benign U.S. inflation report.
The ongoing political blockade in Bangladesh, led by the opposition party, is wreaking havoc on the economy and causing significant disruptions to supply chains, pushing up transportation costs and resulting in higher prices for goods. This crisis is hurting ordinary Bangladeshis and exacerbating the country's already fragile economic situation, which has been further impacted by the effects of the COVID-19 pandemic and the war in Ukraine.
Thailand's new government plans to use a digital handout program to stimulate its economy and achieve 5% annual growth without major cutbacks or negative impact on credit ratings.
India faces the challenge of upskilling its massive youth population to tap into its demographic dividend and retain its global reputation as a tech hub, with the success or failure of this endeavor having significant implications for the country's economy and social stability. The government has implemented various initiatives to expand digital education and training opportunities, but there are still significant gaps in accessibility and quality across diverse regions.
Investors are optimistic that the Federal Reserve can control inflation without harming the economy, leading to a surge in stocks and bonds, as reflected by a benign U.S. inflation report.
The magnitude of cuts in interest rates by the Fed in 2024 will depend on whether inflation stabilizes or a recession occurs, with the potential for more aggressive easing in the latter scenario, according to Exante Data Founder and CEO Jens Nordvig.
Cathie Wood predicts that deflation is already occurring in the US and believes that the Federal Reserve will need to initiate a significant interest-rate cutting cycle in response.
Falling gas prices helped cool inflation last month, offsetting rising rents, leading to a rally on Wall Street.
San Francisco businesses, particularly small ones, are experiencing significant losses and a lack of new business due to the tight security measures and limited tourism during the Asia-Pacific Economic Cooperation summit.
Housing costs were the primary driver of October's inflation, but there was a significant slowdown compared to the previous year, indicating a positive trend in the housing market's impact on inflation.
Citadel founder Ken Griffin believes that the rise of remote work has weakened the social bonds and sense of loyalty in companies, potentially making it easier for companies to fire employees without hesitation.
The October inflation report showed that inflation has eased and price increases are slowing, reducing the need for further rate increases by the Federal Reserve.
The Sahm rule, developed by economist Claudia Sahm, has been touted as a highly accurate indicator for predicting recessions, but its effectiveness may be questioned in the post-pandemic economy where layoffs are due to an increase in labor supply rather than a reduction in demand, challenging the rule's applicability and prompting concerns about potential recession.
Economists warn that President Biden cannot rely on the state of the economy to help him in his 2024 re-election bid, as high prices and inflation persist.
Chicago Fed President Austan Goolsbee believes that the US may achieve the largest peacetime drop in inflation ever, surpassing the decline in 1982, due to factors such as the unwinding of supply chain disruptions and strong productivity growth. However, there is still a "disconnect" between data and people's assessments of the US economy, and a "golden path" scenario is not guaranteed. Goolsbee also highlights risks such as the Gaza-Israel conflict, banking turmoil, and China's economy weakening.
Home Depot's Chief Financial Officer, Richard McPhail, stated that the worst of the inflationary environment is behind them, providing hope for consumers and the economy as the company beats earnings expectations and shares rise. However, relief may not come soon enough for the holiday season, and McPhail predicts a drop in sales for 2023.
Inflation dropped to 3.2% in October, resulting in a surge in the stock market, and there were price declines in 11 out of 28 categories, with airfares experiencing the largest drop; however, staples like food and rent continue to be expensive for consumers.
A growing number of autoworkers are voting against the deals with General Motors and Ford, which could end the strike, despite significant pay increases, highlighting concerns over certain demands and benefits that were not met in the negotiations.
Disney's economic impact in Florida is valued at $40.3 billion, providing over 263,000 jobs, as the company faces a legal battle with Florida Gov. Ron DeSantis over the control of the district governing Walt Disney World.
The Bay Area's inflation rate in October was its slowest in over two years, but consumers are still feeling the impact of high prices, particularly in electricity costs, food away from home, and gasoline.
Treasury yields fell sharply as a weaker-than-expected increase in consumer prices suggested that the Federal Reserve's aggressive interest rate hiking cycle may be coming to an end.
Despite efforts to diversify and shorten supply chains, an analysis by the Bank for International Settlements shows that global supply chains have grown longer and more complicated, with the distance between American and Chinese firms increasing, indicating that supply chains still largely originate in China.
Treasury Secretary Janet Yellen disagrees with Moody's recent decision to shift the U.S. outlook from stable to negative, stating that the American economy is fundamentally strong and Treasury securities remain a safe and liquid asset.
Wall Street's main stock indexes rose as lower-than-expected inflation data increased expectations that the Federal Reserve was finished with interest rate hikes and could potentially cut rates next year.
A couple decided to live off-grid in an affordable home they built themselves on a 16-acre homestead, achieving financial independence and self-sufficiency.
Following the release of the CPI report for October, JPMorgan analysts expect the US economy to return to a 2% inflation rate, signaling the possibility of rate cuts by the Federal Reserve and potential benefits for stock prices.
U.S. inflation in October slowed down due to a decline in gasoline prices, resulting in a decrease in the rate of price growth.
Oil and gas prices are threatened by ongoing conflicts, extended production cuts, and increased demand for heat, but crude oil prices have been declining and gas prices may drop further if oil prices continue to fall.
Economic leaders are divided on which historical era best resembles the current economic climate, with Deutsche Bank citing the 1970s, the White House pointing to the post-World War II period, and UBS suggesting the 1990s; UBS also emphasizes that the current economy has entered a new regime and outlines the potential for a "roaring 20s" if certain conditions are met, but recognizes challenges such as supply issues and other risk factors.
The International Energy Agency (IEA) has raised its oil demand growth forecasts for 2023 and 2024 despite slower economic growth, although its 2024 outlook remains lower than that of OPEC, suggesting that oil supply could go into surplus in 2024.