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France 24
a day ago
- Business
- France 24
US retail sales rise amid limited consumer tariff hit so far
Overall sales climbed 0.5 percent to $726.3 billion from June, in line with expectations. Gains in motor vehicles and parts and furniture offset declines in electronics and building materials. Analysts described the report as solid, but some pointed to a greater risk of weakening in retail sales in the second half of 2025 following disappointing recent labor market data. Consumer spending is a major driver of the world's biggest economy. "This report will ease some of the worries about the health of consumers' spending following the tariff shock," said a note from Oliver Allen, senior US economist at Pantheon Macroeconomics. "That said, growth in consumption still looks relatively weak, and the softening labor market and further likely pass-through of tariffs suggest a sharp reacceleration is unlikely." The report comes as surveys point to a partial recovery in consumer sentiment compared with the spring, following a dive in the stock market after President Donald Trump in early April unveiled plans for sweeping, large tariff increases with trading partners that have since been watered down somewhat. A survey released Friday from the University of Michigan suggested consumers are girding for a worse hit ahead, with year-ahead inflation expectations rising to 4.9 from 4.5 percent. Overall, the report showed a dip in consumer sentiment in August to 58.6 points from 61.7 in July. The reading bottomed out at 52.2 in the spring. "Consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused," said survey director Joanne Hsu. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future." Retailers absorb hit Since the spring, Trump has suspended many of the most onerous tariffs and announced preliminary trade deals with some major partners such as Japan and the European Union. But the net effect of his evolving policy is still a lofty tariff rate by historical standards -- even if it is not as high as earlier threats. Moreover, Trump is continuing to unveil new levies. On Friday, the president told reporters he would set tariffs "next week and the week after" on semiconductors and steel. Data released earlier this week showed a bigger uptick in wholesale prices compared with consumer prices. Some analysts warned that dynamic could mean that those pricing pressures will soon be passed on to consumers. Aware of the vulnerability of consumers, many retailers are so far accepting lower profit margins and absorbing some of the tariffs "with the intention of eventually offsetting it through cost reductions elsewhere," said Neil Saunders of GlobalData. "While some price increases are almost certain, the overall tariff response is shaping up to be far more mixed than initially anticipated," Saunders added. This approach is seen with auto dealers so far, with auto sales rising 1.6 percent, according to Friday's data. "Consumers maintain a moderate rate of spending and even picked up the pace in the past two months as the tariff-price pass-through has been limited thus far," said Kathy Bostjancic, chief economist at Nationwide Financial. Time will tell whether there is a greater hit to consumers down the line. Carl Weinberg, chief economist at High Frequency Economics, said US data Friday that showed an uptick in import prices in July constituted "new evidence of price pressure building in the pipeline," adding that "consumer spending is slowing."
New York Times
01-08-2025
- Business
- New York Times
Employers Pulled Back on Hiring, Adding 73,000 Jobs
Employers continued to create jobs but pulled back on hiring, a sign that more businesses are putting expansion plans on hold as they deal with economic uncertainty. The economy added 73,000 jobs last month, the Labor Department reported on Friday, lower than economists' expectations. The unemployment rate slightly rose to 4.2 percent, up from 4.1 percent the month before. In a sign that the labor market may not have been as robust as it seemed earlier this year, job gains from the past two months were also revised down by a total of 258,000, an unusually high number. The labor market has so far continued to hold up this year. But the slower growth in payrolls signal that cracks in the job market are deepening. Economists have warned that chaotic tariff policies, immigration restrictions and job losses in the federal government could further dampen growth. 'I think we're looking at a labor market that's not absolutely falling off a cliff, but it's getting materially weaker,' said Oliver Allen, a senior U.S. economist at Pantheon Macroeconomics. Employers added fewer jobs in July than expected, reflecting a labor market that has been moderately cooling this year as high interest rates have weighed on businesses. Last year, the economy added an average of about 168,000 jobs each month. Economists expect President Trump's policies to more substantially hit the labor market in the coming months. Higher tariffs on dozens of countries are set to go into effect on Aug. 7. The Trump administration has reached deals with some trading partners, but officials are still finalizing the details and hashing out agreements with other countries. Lower immigration and efforts to ramp up deportations could also strain labor supply for industries that depend on foreign-born workers. Economists say the steady pace of job gains reflect the uncertainty that businesses have faced as on-and-off again tariff policies have made it difficult to move forward with expansion plans. 'It's hard to pull the trigger on hiring when you're uncertain about where tariffs are going to land,' said Diane Swonk, the chief economist at KPMG. 'It's the uncertainty that causes the paralysis.' The jobs report comes two days after the Federal Reserve held interest rates steady. The central bank has taken a wait-and-see approach and shown little urgency to lower rates, in part because of the labor market's durability. Two members of the Board of Governors, however, dissented.
Daily Mail
02-07-2025
- Business
- Daily Mail
Housing market hits milestone not seen since 2009
The housing market has reached a milestone it has not seen for 15 years, and it could be good news for buyers. The number of newly built homes on the market is at the highest level it has been since 2009. Home builders are struggling to find buyers in the frozen housing market, as elevated interest rates disincentive existing owners moving, and keep mortgages out of reach for many first time buyers. Coupled with house prices remaining at their most unaffordable level in recent history, the result is an unusually high inventory of new-build homes available. Home builders are offering discounts and perks as they try to offload them, according to Marketwatch. The typical home buyer cannot afford to pay current prices and current interest rates on a mortgage. 'The big story in the housing sector remains the inventory situation,' Stephen Stanley, chief economist at Santander U.S wrote in a note to investors. Stanley says the inventory is now 'bloated' and has been since last spring when the market tends to pick up pace. Despite builders efforts to entice buyers, success has been limited, according to Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. 'Mortgage rates remain too high for sales to climb significantly higher, while the softening labor market likely will limit the flow of potential home buyers,' Allen wrote in a note. 'With housing payments at an all-time high, many buyers are feeling priced out,' Redfin chief economist Daryl Fairweather (pictured) told earlier this year. 'But sellers still need to move, which means they're increasingly offering concessions to get deals done — especially on condos and townhomes.' Major builder Lennar have said they will look to lower prices in order to move its existing inventory. And Lennar is not alone. Around 30 percent of builders cut home prices in January, the National Association of Home Builders (NAHB) reported — by an average of 5 percent. 61 percent of builders also offered sales incentives in January, the NAHB survey revealed. Incentives include mortgage-rate buydowns and smaller floor plans. Sales of newly built homes did grow in 2024 compared to 2023, according to federal government data, but inventory remains elevated. By contrast, 2024 was the worst year for sales in 30 years for the resale home market. Inventory in the resale home category is also rising, up 16.2 percent from a year ago, which gives buyers more options too. The South and West of the country are the most attractive regions for prospective new construction buyers, a new report from revealed. The regions have larger shares of new build homes available on the market, lower new construction premiums, and more opportunities for mortgage rate buydowns, the report found.
The Star
12-06-2025
- Business
- The Star
American inflation seen picking up with some tariff pass-through
The consumer price index is seen rising 0.3% from April after increasing 0.2% the previous month, excluding the volatile food and energy categories. — Bloomberg NEW YORK: Forecasters say underlying US inflation likely picked up in May, reflecting a modest impact from tariff pass-through for goods that are mostly imported, while some services like airfares saw smaller price gains or outright declines. The consumer price index (CPI) is seen rising 0.3% from April after increasing 0.2% the previous month, excluding the volatile food and energy categories. On a yearly basis, the estimated 2.9% increase would mark a reversal of a downtrend so far this year, based on the median forecast in a Bloomberg survey of economists. 'Only a few goods prices likely rose as a result of the new tariffs in May – June will be a different story – while some providers of discretionary services probably cut prices or kept them low to sustain demand,' Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a note. Economists have been monitoring how higher costs from the trade war initiated by the Trump administration's tariffs are being passed along to consumers. The impact has been minimal in the CPI report through April as businesses absorbed some of the costs and relied on inventories bought before higher levies were put in place. But companies, including Walmart Inc, have since said that they would start increasing prices on some goods. Tariffs should have a broader impact on the data than in April, when the clearest sign of duties-driven price hikes was the 8.8% monthly spike in audio equipment, Bank of America economists Stephen Juneau and Jeseo Park wrote in a note. Other categories to watch are apparel, new cars and other heavily tariffed goods such as household appliances. 'Pre-tariff inventory building and hope that the current scale of tariffs may be reduced have helped to restrain cost increases thus far,' Wells Fargo economists Sarah House and Nicole Cervi said in a note. 'That said, as the higher tariff regime persists, shielding consumers from the costs is likely to become more challenging.' Federal Reserve chair Jerome Powell and his colleagues have indicated they have time to assess the impact of trade policy on the economy, inflation and job market. The Fed is widely expected to leave interest rates unchanged at its meeting next week. Disinflation in services categories probably helped keep a lid on the overall CPI figures, according to forecasters. Airfares and hotel prices have remained subdued in recent months, said BNP Paribas' Andrew Schneider, adding he expects deflation for both in May. A decline in foreign tourism may be contributing to the softness, Schneider wrote in a note. The drop in prices in some services categories are reflecting a pullback from consumers in discretionary spending, according to Anna Wong at Bloomberg Economics. She, too, expects a decrease in airline ticket prices. 'Consumers and the government sector have been pulling back on travel this year, and airfares continued their deflationary trajectory in May,' Wong wrote in a note. — Bloomberg
Yahoo
05-06-2025
- Business
- Yahoo
Unemployment claims rise to highest level in 8 months, signaling slowdown
Initial claims for U.S. unemployment benefits last week rose to their highest level in eight months, a sign the labor market might be losing steam as concerns over tariffs take hold of U.S. businesses and consumers. New applications for jobless benefits in the week ending May 31 reached 247,000, up 8,000 from the week prior, data from the Labor Department shows. The figure exceeded economists' predictions of 235,000 claims, according to financial data firm FactSet. Overall filings for unemployment claims remain at historic lows. The total number of Americans receiving unemployment benefits for the week of May 24 was 1.9 million, down 3,000 from the week prior. Still, the uptick in initial jobless claims last week is "hard to dismiss," Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, said, as the climb could point to broader shifts in the workforce ahead of the May jobs report, to be released tomorrow. "Moreover, a relatively weak hiring rate means that the share of newly unemployed workers who are struggling to find a new job quickly is slowly creeping up, too," he said in an email note. "The further downward pressure on hiring from tariff-related uncertainty will add to these growing strains on the jobs market." Jobless claims have mostly floated between 200,000 to 250,000 since the COVID-19 pandemic in 2020 upended the labor market. "Jobless claims continue to rise, but they are rising at a slow pace, so it's a trend worth watching, but too soon to sound the alarm," said Chris Zaccarelli, chief investment officer for Northlight Asset Management. Firings overseen by the Trump Administration's Department of Government Efficiency, commonly known as DOGE, are the leading cause of job cuts in 2025, with over 280,000 federal workers abruptly terminated from jobs so far this year, according to outplacement firm Challenger, Gray & Christmas. Other signs of potential slowdown A national employment report released yesterday by ADP, a payroll and human resources software provider, found that the U.S. economy added 37,000 jobs in May, the lowest pace of hiring since May 2023. "After a strong start to the year, hiring is losing momentum," said Nela Richardson, chief economist at ADP, in a statement Wednesday. Another sign of a cooling labor market: The number of Americans who quit their jobs fell in April, while layoffs climbed, according to the most recent data from the U.S. Bureau of Labor Statistics. That's despite the fact job openings for the month increased, reaching 7.4 million in April. Layoffs at large U.S. companies Several major companies have revealed layoffs this year including Walmart, which announced in late May that it was reducing 1,500 employees from its global tech workforce in a bid to increase efficiency rapidly evolving technological advances. On Thursday, Consumer goods retailer Procter & Gamble, the company behind many major household brands including Tide detergent, Bounty paper towels and Pampers diapers, announced this week that it would cut 7,000 employees from its workforce over the next two years, as it competes in an "increasingly challenging environment." Workday, Dow, CNN, Starbucks, Southwest Airlines, Walt Disney Co., Microsoft and Facebook parent company Meta have also announced layoffs this year. While job cuts by U.S.-based employees were down 12% in May from the previous month, according to new data from Challenger, Gray & Christmas, they are up 47% from the same month last year. "Tariffs, funding cuts, consumer spending and overall economic pessimism are putting intense pressure on companies' workforces," said Andrew Challenger, senior vice president of the outplacement firm. Many companies have lowered their sales and profit expectations for 2025 in their recent earnings statements. And consumer confidence remains shaky, despite some signs of relief. The Labor Department is expected to report Friday that employers added 130,000 jobs last month, down from 177,000 in April. The unemployment rate is expected to stay at a low 4.2%, according to a survey of forecasters by the data firm FactSet. Sneak peek: Where is Jermain Charlo? What to know about President Trump's travel ban on nationals from 12 countries Hegseth orders Navy to rename USNS Harvey Milk, Jeffries calls it "a complete and total disgrace"
