Latest news with #BlueChipEconomicIndicators
USA Today
30-07-2025
- Business
- USA Today
The economy grew sturdy 3% in the second quarter as tariffs again skewed the numbers
President Donald Trump's global trade war has again distorted the broadest snapshot of the U.S. economy – this time creating a brighter picture. The economy grew solidly in the second quarter but forecasters traced the showing to the reversal of a tariff-related import surge that caused output to shrink early this year. Consumer spending and business investment increased modestly and growth is projected to slow further in the second half of the year as more of Trump's import fees filter into retail prices. The nation's gross domestic product, the value of all goods and services made in the U.S., grew at a seasonally adjusted annual rate of 3% in the April-June period, the Commerce Department said July 30. Economists surveyed by Bloomberg had forecast a 2.4% increase. But the performance was artificially boosted by a sharp drop in imports, just as the 0.5% decline in GDP the first three months of the year – the economy's first contraction in three years – was rooted in a historic spike in shipments from foreign countries. With Trump's double-digit tariffs looming, American retailers and manufacturers raced to order foreign goods early in the year before the levies took effect. That led to an unprecedented flood of imports, which must be subtracted from GDP - the goods that consumers, companies and the public sector bought – because they're made overseas. Since those purchases were pulled forward, companies didn't need to order as many goods from other countries last quarter and imports plunged, reversing the math that dampened output earlier and bolstering U.S. growth. Is the economy doing well right now? The bigger picture: Forecasters expect the economy to slow in coming months as Trump's tariffs reignite inflation and sap consumer purchasing power. Economists project growth of less than 1% in both the third and fourth quarters, according to those surveyed by Wolters Kluwer Blue Chip Economic Indicators. Forecasters predict the Labor Department on Aug. 1 will announce that 109,000 jobs were added in July, according to the median estimate of a Bloomberg survey. That would be down from 147,000 in June and an average of 130,000 so far this year. Although the White House has struck trade deals in recent weeks with countries such as the United Kingdom, the European Union, Indonesia, Vietnam and Japan, the average US tariff rate still has shot up to about 20% from less than 3% early in the year, Nationwide economist Kathy Bostjancic estimates. That likely will push annual inflation from 2.7% to 3% by year's end, she said. Absent the duties, inflation likely was headed back toward the Federal Reserve's 2% goal, economists figure. Additional tariffs that further drive up inflation could take effect by a Aug. 1 deadline if administration officials don't reach deals with dozens of countries. When can we expect the Fed to lower interest rates? Economists don't expect the GDP report to move the needle on a Federal Reserve decision on interest rates slated to be announced at 2 p.m. ET. The Fed is expected to hold rates steady for a fifth straight meeting despite persistent pressure from Trump to decrease rates, though futures markets are betting on a mid-September rate cut. Normally, a sturdy GDP figure might make the Fed even less inclined to lower rates. The Fed shaves rates to support a weak economy and raises rates, or keeps them high longer, to fight inflation. But since the data was again skewed by tariff effects, officials are likely to put less weight on the numbers. For now, Fed officials are more focused on maintaining their wait-and-see approach to rate reductions as they assess how much the import charges push up inflation in coming months - barring a downturn in the labor market.
Yahoo
10-07-2025
- Business
- Yahoo
Cleveland Federal Reserve sees slow, steady economic outlook, with a side of uncertainty
The United States' gross domestic product growth is expected to be below average through early 2026 with inflation likely to increase in the near term, according to federal economic data and Blue Chip Economic Indicators from advisory firm Wolters Kluwer. In Ohio, job growth has not kept pace with the stronger national trend since February 2020 and payroll employment remains below pre-pandemic levels in some metro areas, according to a presentation by Lisa Barrow, vice president of the Federal Reserve Bank of Cleveland. She shared the national and regional data to the Stark Tuscarawas Workforce Development Board during the board's Zoom meeting on July 9. The Reserve Bank's region covers all of Ohio and parts of West Virginia, Pennsylvania and Kentucky. Barrow said that Ohio employers likely will continue to face challenges because of an aging population that contributes to a labor force growth rate below the nationwide rate. The labor force, defined as people over the age of 16 who are working or seeking work, grew by 3.7% nationwide and 0.9% in Ohio between February 2020 and May 2025 ― with data for the Cleveland-Elyria metro area only extending to December 2024. "Uncertainty is unusually high," Barrow added, particularly in reference to trade policy and tariffs. More than half of the respondents to a recent Federal Reserve Bank of Cleveland survey expect tariffs to decrease demand and increase input costs and selling prices. As a result, 62% of the regional businesses already have or plan to pass the cost increases on to customers. JoAnn Breedlove, executive director of the Workforce Development Board, said the federal bank's newsletters advertised the option for a presentation, for which she extended an invitation to area elected officials. "As she expressed, things are ever-changing," Breedlove said. Additional highlights from the economic presentation include: The nation's gross domestic product growth was -0.5% in the first quarter of this year, a figure attributed to a surge in imports. There was a 4.8% increase in payroll employment nationwide and a 1.7% increase in Ohio between February 2020 and May 2025. The Canton-Massillon metro area saw a 0.3% increase in employment for the same period. Education and health service careers, followed by construction, saw the greatest year-over-year growth in Ohio. Reach Kelly at 330-580-8323 or This article originally appeared on The Repository: Cleveland Federal Reserve provides challenging economic outlook Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
5 Ways Tariffs Could Affect the Upper-Middle Class
While the upper middle class is more insulated than lower-income groups from ever-changing tariff policies, they can still expect some pain on the horizon. Be Aware: Find Out: Watch out for these five ways tariffs could affect the upper middle class — and plan accordingly. Inflation has remained more muted than expected, as importers rushed to stockpile inventories in the first quarter of 2025. But those inventories are already dwindling, and the third quarter could see inflation heat up again. 'Tariffs will impact the upper-middle class's buying power as both core material and discretionary materials increase in costs,' explains Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'Items like electronics, clothing, household products and cars will be impacted.' Read More: That loss of purchasing power will prevent the upper-middle class from buying the brands and small luxuries they enjoy. In some cases, it will become harder or even impossible to find some imported goods. That could mean certain wines doubling in price, or no longer imported at all. Or French cheeses, or perfumes, or fast fashion lines that are no longer affordable enough to justify their low-build quality. The June Blue Chip Economic Indicators survey by Wolters Kluwer shows economists projecting slower growth in both 2025 and 2026. As recently as February, economists projected GDP growth of 2.2% for 2025 and 2.0% for 2026. By June, the consensus forecast for both dropped to an anemic 1.4%. Recession risk also remains elevated. The survey of economists forecasts a 41% chance of recession in the US over the next 12 months. Slow or negative GDP growth adds to the risk of job loss for the upper-middle class just like everyone else. Or, more likely, the risk of reduced income or no rise in income — even as inflation drives up costs. Again, that could leave many in the upper-middle class with less purchasing power. Stagnating economic growth certainly doesn't do investment portfolios any favors. From 2015 to 2024, the S&P 500 has delivered an average annual return of 14.1%, according to data from The Motley Fool. The next decade may not prove so fruitful for investors. 'Upper-middle-class investors hold ETFs and mutual funds packed with global manufacturers and importers,' notes Eric Croak, the certified financial planner (CFP) behind Croak Capital. 'Tariffs squeeze margins on those companies. Dividends shrink, share prices dip, future earnings soften. These investors could find themselves stuck between cashflow drag and asset underperformance.' Many upper-middle class families want to cover college costs for their children. Expect that to get harder, between tuition, books and housing inflation, combined with weaker income and investment growth. But higher education also stands to become more expensive due to less subsidization by foreign students. 'Many colleges and universities depend on foreign students who pay full tuition as a means to subsidize other students' grants and scholarships,' added Hafezi. 'Less money for scholarships and grants, combined with higher costs and inflation, will drive up costs for American families.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 8 Common Mistakes Retirees Make With Their Social Security Checks How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 5 Ways Tariffs Could Affect the Upper-Middle Class Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
5 Ways Tariffs Could Affect the Upper-Middle Class
While the upper middle class is more insulated than lower-income groups from ever-changing tariff policies, they can still expect some pain on the horizon. Be Aware: Find Out: Watch out for these five ways tariffs could affect the upper middle class — and plan accordingly. Inflation has remained more muted than expected, as importers rushed to stockpile inventories in the first quarter of 2025. But those inventories are already dwindling, and the third quarter could see inflation heat up again. 'Tariffs will impact the upper-middle class's buying power as both core material and discretionary materials increase in costs,' explains Babak Hafezi, founder of Hafezi Capital and professor of international business at American University. 'Items like electronics, clothing, household products and cars will be impacted.' Read More: That loss of purchasing power will prevent the upper-middle class from buying the brands and small luxuries they enjoy. In some cases, it will become harder or even impossible to find some imported goods. That could mean certain wines doubling in price, or no longer imported at all. Or French cheeses, or perfumes, or fast fashion lines that are no longer affordable enough to justify their low-build quality. The June Blue Chip Economic Indicators survey by Wolters Kluwer shows economists projecting slower growth in both 2025 and 2026. As recently as February, economists projected GDP growth of 2.2% for 2025 and 2.0% for 2026. By June, the consensus forecast for both dropped to an anemic 1.4%. Recession risk also remains elevated. The survey of economists forecasts a 41% chance of recession in the US over the next 12 months. Slow or negative GDP growth adds to the risk of job loss for the upper-middle class just like everyone else. Or, more likely, the risk of reduced income or no rise in income — even as inflation drives up costs. Again, that could leave many in the upper-middle class with less purchasing power. Stagnating economic growth certainly doesn't do investment portfolios any favors. From 2015 to 2024, the S&P 500 has delivered an average annual return of 14.1%, according to data from The Motley Fool. The next decade may not prove so fruitful for investors. 'Upper-middle-class investors hold ETFs and mutual funds packed with global manufacturers and importers,' notes Eric Croak, the certified financial planner (CFP) behind Croak Capital. 'Tariffs squeeze margins on those companies. Dividends shrink, share prices dip, future earnings soften. These investors could find themselves stuck between cashflow drag and asset underperformance.' Many upper-middle class families want to cover college costs for their children. Expect that to get harder, between tuition, books and housing inflation, combined with weaker income and investment growth. But higher education also stands to become more expensive due to less subsidization by foreign students. 'Many colleges and universities depend on foreign students who pay full tuition as a means to subsidize other students' grants and scholarships,' added Hafezi. 'Less money for scholarships and grants, combined with higher costs and inflation, will drive up costs for American families.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 8 Common Mistakes Retirees Make With Their Social Security Checks How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 5 Ways Tariffs Could Affect the Upper-Middle Class
USA Today
23-04-2025
- Business
- USA Today
'I'm alarmed': With recession fears rising, jobless benefits still fall short: Report
'I'm alarmed': With recession fears rising, jobless benefits still fall short: Report Show Caption Hide Caption Can you get unemployment if you quit? What to know about benefits. Being out of work doesn't mean you automatically qualify for unemployment benefits. Here's what to know before applying. During the COVID-19 recession, 22 million laid-off workers sought unemployment benefits, sparking chaos in the payment system and compounding the financial woes of jobless Americans. Five years later, with many forecasters predicting another downturn is likely in 2025, a far less burdened benefits system remains plagued by myriad problems that could hamper payments to Americans who lose their jobs in an economic slump, according to a new report. Nearly 1 in 5 unemployment insurance recipients say their benefits were inadequate, with a third complaining they've struggled with food insecurity despite the payments, according to a survey and study by the National Employment Law Project. Large shares of beneficiaries also lament delayed payments, jammed phone lines, hard-to-navigate websites and incorrectly denied benefits, among other issues, according to the survey, which was conducted in partnership with online polling firm YouGov in September. The firms surveyed 1,480 workers who were unemployed at some point from 2019 to 2024 and the results were provided exclusively to USA TODAY. 'I'm alarmed,' said Amy Traub, senior researcher and policy analyst for NELP and a co-author of the study. 'The unemployment insurance system is really falling far short in its function of supporting unemployed workers.' The gaps exist even though Congress provided $1 billion in the American Rescue Plan of 2021 to shore up jobless benefits. Traub said the money did foster more timely payments and website improvements but there are still shortcomings in those and other areas. States finance unemployment payments themselves while the federal government bankrolls the system's technology and infrastructure. Both are funded by payroll taxes that are generally paid by employers. Why do we have unemployment insurance? Besides helping workers make ends meet when they lose their jobs, jobless benefits bolster consumer demand, helping avoid – or dig the economy out of – a recession, the NELP report says. And the payments ensure that workers have enough time to find a job that best suits their skills, improving the efficiency of the labor market and economy. Economists surveyed say there's a nearly 50% chance of a recession because of President Donald Trump's sweeping tariffs on imported goods, according to a survey by Wolters Kluwer Blue Chip Economic Indicators. JPMorgan Chase has put the odds at 60%. Among the lingering trouble spots with the system: Benefits fall short Nineteen percent of the unemployment recipients polled said the money they received wasn't enough to meet their financial needs, the survey showed. To be sure, the checks go a long way toward helping laid-off workers stay afloat. Of unemployment applicants who didn't receive benefits, 51% experienced hunger, 40% struggled to pay their rent or mortgage and 37% had a hard time paying medical bills, according to the survey. By contrast, among those obtaining payments, 33% went hungry at times, 29% had issues with housing payments and 30% couldn't pay medical costs. Yet it's troubling that about a third of beneficiaries still had difficulty covering basic expenses, Traub said. 'During the next recession, if we have large numbers of workers who lose their jobs, we want to be sure they're not going hungry or losing their homes,' she said. A big reason many recipients can't cover such necessities is the wide disparities among states in their benefit disbursements, Traub said. In early 2024, for example, Alabama workers received an average benefit of $252 a week, replacing 29% of their prior wage on average, while workers in Washington state got an average $721 a week, or 49% of their previous pay. On average across the U.S., unemployment covered 36% of a worker's previous pay. Also, most states provide up to 26 weeks of benefits – a standard that's typically expanded in a recession – but 13 states dole out checks for 12 to 21 weeks, including Arkansas, Iowa, Michigan, Oklahoma, South Carolina, Alabama, Kansas and Florida, according to the Center on Budget and Policy Priorities. Jammed phone lines, uncooperative websites, late payments During the COVID-19 pandemic, an unprecedented surge of applicants struggled to obtain payments. Surprisingly, freshly laid-off workers nowadays, numbering about 200,000 each week, still face obstacles. From 2022 to 2024, about 22% of applicants said they couldn't reach their state unemployment office by phone, the same share as during the pandemic (2020-2021); 20% complained of hard-to-navigate websites vs. 23% during the health crisis; and 17% pointed to delays receiving payments, compared to 21% during the crisis. Many states beefed up staffing during the COVID-19 pandemic, shifting workers from other parts of state unemployment agencies to customer service, but moved them back to their old positions as the spike in applications ebbed, Traub said. In many cases, that left a reduced but still sizable share of workers struggling to access benefits. Employers discourage workers from applying Nearly 1 in 5 workers said an employer tried to deter them from applying for benefits, with 14% saying such steps included telling them they weren't eligible and 5% threatening retaliation if they applied. Employers may have the incentive to dissuade staffers from filing for unemployment because the taxes they pay to support the benefits system are based on the number of their workers who successfully file claims. 'It's not really up to the employer who's eligible and who's not,' Traub said. Incorrectly denied benefits About 17% of applicants polled said they were improperly denied benefits since the pandemic. The question of whether applicants are entitled to payments can get thorny, hinging on whether they were laid off or fired for cause, and whether they met thresholds for the number of hours they worked and the wages they earned in previous months, Traub said Discrimination About 7% of applicants said they faced discrimination because of race or other reasons when they sought benefits, the survey showed. In a related issue, a growing number of states are using new ID verification systems to detect fraud, according to the report, which was coauthored by researchers Alexander Hertel-Fernandez and Sanjay Pinto. Twelve percent of Black workers report trouble verifying their identity, more than twice the share of white employees, according to NELP's survey. The NELP report pointed to facial recognition technology that's less accurate for people with darker skin and questions that rely on data from credit bureaus. Black workers are less likely to have substantial credit histories on file, the report said. Workers in Southern states face more hurdles Broadly, workers in Southern states are far more likely than those in other regions to complain of discrimination, delayed payments, low payment levels and inadequate duration of payments, the report said. It cited racism and a 'lack of adequate support for social infrastructure' that may more prevalent in the South. Among NELP's recommendations to bolster the system:
