Latest news with #DianeSwonk
Yahoo
03-08-2025
- Business
- Yahoo
The Fed is concerned. This economist explains exactly why.
KPMG US chief economist Diane Swonk joins Market Domination with Josh Lipton to discuss what the Federal Reserve is concerned about when it comes to price stability and tariffs. To watch more expert insights and analysis on the latest market action, check out more Market Domination. Sign in to access your portfolio
CNBC
01-08-2025
- Business
- CNBC
KPMG's Diane Swonk explains why the employment rate has remained low
Diane Swonk, chief economist at KPMG, and CNBC's Steve Liesman join 'The Exchange' to discuss the possibility of a rate cut, the shrinking labor force, and more.
Yahoo
01-08-2025
- Business
- Yahoo
US job growth stalls: Just 73,000 jobs added in July, with ‘stunning' downward revisions to recent months
The US job market slowed substantially in July and was much weaker than previously thought in previous months, suggesting President Donald Trump's trade policy may be stifling hiring. The US economy added just 73,000 jobs last month, and the monthly totals for May and June were revised down by a combined 258,000 jobs. The prior two months' revisions were 'stunning,' said Diane Swonk, chief economist at KPMG, in an interview with CNN. May's estimated 144,000 net gain was revised down by 125,000 to 19,000; and June's preliminary tally of 147,000 was slashed by 133,000 to 14,000, respectively, according to data released Friday from the Bureau of Labor Statistics. 'It's stalling out right now,' Swonk said of the US labor market. With those monumental revisions, the meager job gains in June were the weakest since December 2020, the last time the labor market had monthly job losses. Outside of the 2020 pandemic recession, job growth is running at the weakest pace since 2010. 'This is absolutely the worst major economic report since the end of the pandemic era,' Joe Brusuelas, chief economist at RSM US, wrote to CNN via email. The Dow opened lower by 515 points, or 1.15%. The broader S&P 500 fell 1.2% and the tech-heavy Nasdaq Composite slipped 1.6%. Traders now expect a 67% chance of a rate cut from the Federal Reserve in September, up from a 38% chance on Thursday, according to the CME FedWatch Tool. Trump's 'unorthodox economic agenda and policies may be starting to make a dent in the labor market, and especially troubling was the massive downward revisions of over a quarter million jobs in May and June,' Christopher Rupkey, chief economist at FwdBonds, wrote in a note Friday. The unemployment rate rose to 4.2% from 4.1%. Economists were expecting the report to show a slowdown in job growth, as hiring across the vast majority of industries has been weak for months. High uncertainty over Trump's economic policies — specifically a volatile trade policy and shifting tariff rates — have been blamed for putting a stranglehold on employers' growth plans. Economists anticipated that 115,000 jobs were added in July and that the unemployment would rise to 4.2%, according to FactSet consensus estimates. However, they weren't expecting the past three months to be this weak. 'This (jobs report) is really bad because you can see the impact of trade and immigration policy hurting demand for hiring,' Brusuelas said. This story is developing and will be updated. CNN's Matt Egan contributed to this report. Sign in to access your portfolio
Washington Post
15-07-2025
- Business
- Washington Post
Americans are downsizing their summer vacations
Americans are downsizing their summer vacations — taking shorter trips, driving instead of flying, and generally staying closer to home in an uncertain economy. Families appear to be pulling back on travel spending, after years of splurging on vacations and other experiences after the pandemic-era shutdowns. Fewer households are booking airline tickets or hotel rooms now than they were a year ago, Bank of America data shows. And the number of people taking vacation time off work in June dropped to its lowest level since the pandemic, according to Labor Department data. That pullback follows months of economic warning signs. Americans say they are feeling worse about the economy than they have in years, as new trade and immigration policies take hold. Many are bracing for a spike in prices from new tariffs, while others are worried about losing their jobs in a slowing labor market. Renewed tariff threats last week — including rates as high as 50 percent on goods from Brazil, Japan and Canada starting Aug. 1 — have added to fears that a new round of inflation may be around the corner. Consumer spending dropped in May, as households put more of their incomes in savings in anticipation of higher costs. In all, Americans expect to spend an average $3,132 on summer vacations this year, about 25 percent less than the $4,199 they set aside last summer, according to an annual survey conducted by Ipsos for Generali Global Assistance. 'The spending slowdown is real,' said Diane Swonk, chief economist at KPMG. 'Consumers are stressed, and this is where we're seeing it first: in domestic flights, hotels, and a lot of other service-sector spending.' Although the wealthiest Americans are still splurging on international travel and booking hotel rooms that cost $800 a night or more, most others are retrenching, Swonk said. U.S. hotel occupancy rates fell 1.7 percent in June from a year earlier, marking the fourth straight month of declines, according to real estate analytics firm CoStar. To keep up, hotels and resorts across the country are going to greater lengths to woo locals and road-trippers, rolling out 'daycation' deals, free parking and discounted spa services to tap into a growing pool of Americans who want a break without breaking the bank. 'This summer, it's definitely staycation season,' said Madelyn Lydon, assistant director of marketing at the Arizona Biltmore, a resort in Phoenix. The hotel is offering a 40 percent discount and free parking for visitors from seven nearby states in hopes of attracting more road-trippers. Same-day bookings have picked up, along with demand for day passes, Lydon said, as more people choose the resort and its pools as a last-minute substitute for longer, pricier vacations. Years of inflation, coupled with rising health care, insurance and utility costs, have pinched household budgets. Credit card balances, at $1.2 trillion, are near an all-time high, and delinquency rates are rising on mortgages and student loans as more Americans fall behind on everyday expenses. Getting away for the summer this year has required extra scrimping for Chelsea Padilla, a middle school teacher near Galveston, Texas, whose monthly mortgage bill recently rose by $200 because of higher taxes and insurance costs. Instead of traveling with her family of five, she has stuck to a smaller getaway with just her 16-year-old daughter this month. She bought plane tickets to Destin, Florida, using credit card points. And unlike the nice hotel suite they splurged on last summer, Padilla found a no-frills property a few miles from the beach that included free breakfast. They ate fruit and snacks from the grocery store for lunch, and they usually split an entrée for dinner to save money. 'It's became a real balance between the pressures of rising costs and still being able to enjoy our lives,' said Padilla, 41. 'We're being as thrifty as we can.' Southwest Airlines, American Airlines and JetBlue have all warned that slowing domestic demand could weigh on profits this year. Delta Air Lines last week reported a 4 percent drop in main cabin bookings in the first six months of the year, compared with a year earlier. (Notably, premium tickets, for first- and business-class seats, rose by 6 percent during the same period.) Last summer, Sam Head and his family went on three vacations, twice to Florida and once to Las Vegas. This year, the Milwaukee-based family is sticking to a long weekend in Wisconsin Dells to visit multiple water parks. Business at Head's recruiting firm has slowed dramatically, he said, which has made him nervous about the economy. Instead of splurging on travel, Head said, he is focused on saving up a year's worth of extra cash. 'Do I worry about where things are going? Of course. I already see it in my numbers,' the 35-year-old said. 'We're cutting back on any nondiscretionary spending so we can keep more money in our pockets.' Most Americans — 56 percent — say they plan to travel less this summer, according to a national poll by SSRS. Many said they were opting for shorter or 'more budget-conscious' trips because of financial concerns, with 54 percent saying they would be trying to save more money this year. In New Paltz, New York, Danielle Dippel, 40, and her boyfriend spent months arranging a week-long vacation in Kennebunkport, Maine — then promptly scrapped that plan when financial jitters got in the way. Between government funding cuts at her job at a historical site and growing economic uncertainty, Dippel said it no longer made sense to spend $2,000 on a summer trip. Instead, the couple plans to drive four hours to Newport, Rhode Island, where they will spend four nights. 'We're trying to cram everything into three days,' Dippel said. 'It's about $700 cheaper. And we won't have to be away from our cat very long.'
Axios
09-07-2025
- Business
- Axios
Tariffs are already squeezing corporate margins, new survey finds
Someone has to pay the cost of tariffs — and a new survey out Tuesday finds many companies are already feeling the pain. Why it matters: Businesses trying to insulate customers from trade costs can only eat them for so long before raising prices, fueling the tariff-driven inflation many economists fear. Driving the news: Some 57% of companies were already experiencing a tariff-driven decline in gross margins as of May, per the KPMG Tariff Pulse Survey. Most of those hits were small — though a quarter of respondents said their margins had already fallen by 6% or more. The firm surveyed senior and C-Suite executives at 300 companies across industries, all with annual revenue of $1 billion or more. Zoom in: If higher prices haven't shown up for customers yet, the survey makes clear they're coming. 77% of respondents said their companies are considering price increases of at least 5% in the next six months. What they're saying: " The survey underscores the Federal Reserve's fear that the bulk of the tariff-induced inflation has yet to hit," KPMG economist Diane Swonk said in a statement. "The personal consumption expenditures index, the Fed's favored inflation measure, is forecast to peak above 4% in the second half of 2025; that is more than double the Fed's 2% target." The intrigue: Earnings season for public companies kicks off next week, and investors will be closely watching to see whether — and how badly — corporate profits are being squeezed.
