Tag Archives: Economy

Sri Lanka Economic Crisis some calling “A mini Arab Spring”

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Sri Lanka’s cabinet has resigned en masse during economic crisis
  • There have been new calls today for both the president and prime minister to step down after the entire Cabinet resigned on Sunday.
  • Shortages of food, medicine and fuel have sparked countrywide protests, and security forces have fired tear gas and water cannons at protesters marching on the president’s home.
  • Vandana Menon, a reporter with The Print, says “I’ve never seen total unity like this before. It’s like a mini Arab Spring in Sri Lanka.”
  • Oh, there’s a huge fuel crisis, and you can see vehicles queuing up at petrol stations. Hospitals have had to stop surgeries last week because of power cuts and shortages of medicines.

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Continued crisis is spiking stress and anxiety across America

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Joe Biden’s America: Anxiety Spikes as Americans Report High Levels of Stress Due to Rising Prices
  • Americans are experiencing a spike in anxiety due to rising prices, supply chain issues, and global uncertainty, the American Psychological Association’s annual “Stress in America” poll revealed.
  • The survey found a whopping 87 percent of Americans identifying “rise in prices of every day items due to inflation (e.g. gas prices, energy bills, grocery costs)” as a significant source of stress.
  • 87 percent said that it “feels like there has been a constant stream of crises without a break over the last two years,” and 73 percent say they are “overwhelmed by the number of crises facing he world right now.” Further, 69 percent are worried the Russian invasion of Ukraine will lead to nuclear war, and the same percentage fear these are the beginning stages of a WWIII.

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Sen. Rick Scott: Biden is Considering Turning from Russia to Iran, Venezuela to Save Our Economy

Important Takeaways:

  • Rick Scott: Biden Is Making Iran, Venezuela Our Partners ‘To Save our Economy’
  • Broadcast of CNBC’s “Squawk Box,” Sen. Rick Scott (R-FL) criticized the Biden administration for reportedly looking to boost energy production in Iran and Venezuela and stated that doing so would make the authoritarian Maduro regime and Iran’s dangerous regime partners “to save our economy” and argued that every day America waits to boost domestic energy production
  • ”This idea that we’re going to go do business with Maduro, he’s killing his own citizen[s], or Iran, that wants to kill all the Jews and demolish Israel, we’re going to go — they’re going to be our partner to save our economy? Come on.”

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Mastercard, Visa and Many Other Companies Cut Ties with Russia

Matthew 24:6 “And you will hear of wars and rumors of wars. See that you are not alarmed, for this must take place, but the end is not yet.”

Important Takeaways:

  • Mastercard and Visa cut off Russian banks from their networks: Exodus of foreign firms plunges Russia’s economy into freefall as ruble hits record low and Moscow residents continue scramble for hard currency
  • Visa and Mastercard have blocked multiple Russian banks from their network
  • It means that many Russians awoke Tuesday unable to use their bank cards
  • Everyday Russians have been making runs on banks to withdraw cash
  • The ruble has plunged in value amid punishing Western sanctions
  • Scores of companies are pulling out of Russia in response to Ukraine invasion
    • Other Companies cutting ties with Russia:
      • Adidas
      • BP
      • Dell
      • DHL
      • Disney
      • Ericsson
      • FedEx
      • GM
      • Harley-Davidson
      • HSBC
      • MasterCard
      • Nokia
      • Shell
      • Sony
      • Uber
      • UPS
      • Visa
      • Volvo
      • Warner Bros.

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The Breadbasket of Europe Russia/Ukraine War Escalates Cost at the Store

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Russia’s invasion of Ukraine will likely ratchet American food prices even higher, experts say
  • Russia’s invasion of Ukraine could push U.S. food prices even higher, as the region is one of the world’s largest producers of wheat and some vegetable oils. And the disruptions could drag on for months or even years, as crop production in the area could be halted and take a long time to restart.
  • This week’s events “are proof that this will be a multiyear issue,” said Michael Swanson, Wells Fargo’s chief agricultural economist. “It’s my assumption that Ukrainian crops won’t get planted, or not anywhere near what they typically plant. And the Russian crops will be planted but will be embargoed in many markets. This is not something that will be resolved in weeks or months.”
  • “There will be a disruption; there is already a blockade on Black Sea ports,” she said. “In the near term this should have an impact on European Union wheat shipments, then it will have an impact on the U.S.”
  • Ukraine is the world’s fourth-largest exporter of both corn and wheat. It is also the world’s largest exporter of sunflower seed oil, an important component of the world’s vegetable oil supply. Together, Russia and Ukraine supply 29 percent of all wheat exports and 75 percent of global exports of sunflower oil, said Kelly Goughary, senior research analyst Gro-Intelligence, an agriculture data platform.

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Aftermath of Tonga U.N. official says 80% of population were affected by the recent eruption

Important Takeaways:

  • Tonga needs over $90 million to start repairs from volcano
  • A U.N. official says 80% of Tonga’s 105,000 people were affected by the undersea volcanic eruption and ensuing tsunami that lashed the Pacific island nation on Jan. 15
  • Cyclone season is still in full swing, and there are almost weekly earthquakes in the region, the latest a magnitude 5.0 quake only a few hours earlier just 47 kilometers (30 miles) from the capital,
  • 14 U.N. agencies and the international community are supporting Tonga’s relief and recovery efforts, providing almost 40 tons of water and sanitation supplies, reconnecting Tonga with the rest of the world through emergency telecommunications services and logistics, and providing food, school materials and psychological support.
  • The $90.4 million in estimated losses doesn’t take into account future losses from tourism, agriculture or commerce.

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Study shows America is too dependent on China for Pharmaceuticals

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Gary Cohn, then chief economic advisor to President Trump, argued against a trade war with China by invoking a Department of Commerce study that found that 97 percent of all antibiotics in the United States came from China. “If you’re the Chinese and you want to really just destroy us, just stop sending us antibiotics,” he said.
  • If we are dependent on China for thousands of ingredients and raw materials to make our medicine, China could use this dependence as a weapon against us.

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Kellogg reaches tentative deal with union after 2 months of strike

(Reuters) -Kellogg Co said on Thursday it has reached an agreement with the union on a new five-year contract for its employees at a few breakfast-cereal plants in the United States, potentially bringing a near two-month long strike to an end.

The tentative agreement, reached after multiple rounds of talks with the union, includes wage increases and benefits for all employees and better terms for temporary employees.

The latest agreement allows for all temporary employees with four or more years of service to move to permanent positions with better pay and benefits.

Union members had previously opposed Kellogg’s two-tier employment system that did not offer temporary workers, who make up 30% of its workforce, a pathway to become permanent staff.

Employees at Kellogg’s cereal plants including Michigan, Nebraska, Pennsylvania and Tennessee went on strike on Oct. 5 after their contracts expired, as negotiations over payment and benefits stalled due to differences between the company and about 1,400 union members.

The new deal, which will be voted on by Kellogg employees on Dec. 5, will also offer permanent employees with better post-retirement benefits.

During lengthy negotiations with union members, Kellogg had hired permanent replacements for some of its plant workers on strike, and also warned of a dent to its annual profit due to the disruption.

Kellogg is one of the several major U.S. companies that has faced worker strikes in the recent past as the labor market tightens and inflation reaches record highs.

Last month, farm equipment maker Deere & Co reached an agreement with workers after a six week strike.

(Reporting by Maria Ponnezhath in Bengaluru; Editing by Arun Koyyur and Shinjini Ganguli)

 

U.S. economy gaining steam as manufacturing forges ahead; shortages still a constraint

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. manufacturing activity picked up in November amid strong demand for goods, keeping inflation high as factories continued to struggle with pandemic-related shortages of raw materials.

Signs that the economy was gathering momentum halfway through the fourth quarter were underscored by other data on Wednesday showing private employers maintained a strong pace of hiring last month. But there are fears that the Omicron variant of COVID-19 could hurt demand for services as well as keep the unemployed at home, and hold back job growth and the economy.

“Manufacturing should continue to contribute positively to GDP growth over the next year as businesses replenish inventories and supply-chain issues improve,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “There are risks, including the potential for businesses overbooking orders now and the Omicron variant magnifying price and supply chain issues.”

The Institute for Supply Management (ISM) said its index of national factory activity increased to a reading of 61.1 last month from 60.8 in October.

A reading above 50 indicates expansion in manufacturing, which accounts for 12% of the U.S. economy. Economists polled by Reuters had forecast the index rising to 61.0.

“The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement,” said Timothy Fiore, ISM chair of the manufacturing business survey committee.

Global economies’ simultaneous recovery from the COVID-19 pandemic, fueled by trillions of dollars in relief money from governments, has strained supply chains, leaving factories waiting longer to receive raw materials.

The Federal Reserve’s Beige Book on Wednesday described economic activity as growing at “a modest to moderate pace” during October and early November, but noted that “growth was constrained by supply chain disruptions and labor shortages.”

All of the six largest manufacturing industries in the ISM survey, including computer and electronic products as well as transportation equipment, reported moderate to strong growth.

Makers of computer and electronic products said “international component shortages continue to cause delays in completing customer orders.” Transport equipment manufacturers reported “large volume drops due to chip shortage.” Furniture producers said “business is strong but meeting customer demand is difficult due to a shortage of raw materials and labor.”

But there are some glimmers of hope. Prices for steel plate and hot-rolled coil appear to be nearing a plateau, according to manufacturers of fabricated metal products. Supply of plastic resins is improving, accounts from electrical equipment, appliances and components, as well as plastics and rubber products manufacturers suggested.

The ISM survey’s measure of supplier deliveries slipped to 72.2 from 75.6 in October. A reading above 50% indicates slower deliveries.

The long delivery times kept inflation at the factory gate bubbling. The survey’s measure of prices paid by manufacturers fell to a still-high 82.4 from 85.7 in October.

Factories are easily passing the increased production costs to consumers and there are no signs yet of resistance.

Fed Chair Jerome Powell told lawmakers on Tuesday that “the risk of higher inflation has increased,” adding that the U.S. central bank should consider accelerating the pace of winding down its large-scale bond purchases at its next policy meeting in two weeks.

The Fed’s preferred inflation measure surged by the most in nearly 31 years on an annual basis in October.

Stocks on Wall Street rebounded after Tuesday’s sell-off. The dollar was steady against a basket of currencies. Prices for longer-dated U.S. Treasury prices rose.

STRONG ORDERS

The ISM survey’s forward-looking new orders sub-index climbed to 61.5 last month from 59.8 in October. Customer inventories remained depressed.

With demand robust, factories hired more workers. A measure of manufacturing employment rose to a seven-month high.

Strengthening labor market conditions were reinforced by the ADP National employment report on Wednesday showing private payrolls increased by 534,000 jobs in November after rising 570,000 in October. That was broadly in line with expectations.

This, combined with consumers’ robust perceptions of the labor market last month suggest job growth accelerated further in November. First-time applications for unemployment benefits declined between mid-October and mid-November.

But a shortage of workers caused by the pandemic is hindering faster job growth. There were 10.4 million job openings at the end of September.

Workers have remained home even as companies have been boosting wages, school reopened for in-person learning and generous federal government-funded benefits ended.

“Overall, the risk remains that renewed health concerns will keep workers, especially those with caregiving responsibilities, from returning to the labor force, preventing a return to pre-pandemic strength,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.

According to a Reuters survey of economists nonfarm payrolls probably increased by 550,000 jobs in November. The economy created 531,000 jobs in October.

The Labor Department is scheduled to publish its closely watched employment report for November on Friday.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

U.S. retail sales surge as Americans kick off holiday shopping, brighten economic outlook

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales surged in October as Americans eagerly started their holiday shopping early to avoid empty shelves amid shortages of some goods because of the ongoing pandemic, giving the economy a lift at the start of the fourth quarter.

The solid report from the Commerce Department on Tuesday suggested high inflation was not yet dampening spending, even as worries about the rising cost of living sent consumer sentiment tumbling to a 10-year low in early November. Rising household wealth, thanks to a strong stock market and house prices, as well as massive savings and wage gains appear to be cushioning consumers against the highest annual inflation in three decades.

“It’s more important to look at what consumers do than what they say,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “They are concerned about higher inflation, but they are still in good shape and are continuing to spend.”

Retail sales jumped 1.7% last month, the largest gain since March, after rising 0.8% in September. It was the third straight monthly advance and topped economists’ expectations for a 1.4% increase. Sales soared 16.3% year-on-year in October and are 21.4% above their pre-pandemic level.

Several of the top U.S. retailers this week have noted an earlier start to holiday shopping. While this could lead to declines in November and December, economists and retailers expect holiday sales this year will be the best in a while.

“Today’s numbers show that consumers are getting a jump on their holiday shopping,” said Matthew Shay, president of the National Retail Federation in Washington. “We continue to urge consumers to shop early and shop safely, and we fully expect this holiday season to be one for the record books.”

Retail sales are mostly made up of goods, with services, including healthcare, education and hotel accommodation, making up the remaining portion of consumer spending. The nearly two-year long COVID-19 pandemic has caused an acute shortage of labor, delaying deliveries of raw materials to factories as well as shipments of finished goods to markets.

October’s broad increase in sales partly reflected higher prices as monthly consumer inflation surged 0.9% in October, which boosted the annual rate to 6.2%.

Stocks on Wall Street were trading higher on the data and also as Walmart forecast a strong holiday quarter. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

BROAD GAINS

Sales were led by motor vehicles, with receipts at auto dealerships advancing 1.8% after gaining 1.2% in September. The rise reflected the first increase in unit sales in six months, as well as higher prices. The tight supply of automobiles because of a global semiconductor shortage is driving up prices.

Sales at service stations increased 3.9%, boosted by more expensive gasoline. Online retail sales rebounded 4.0%. Receipts at building material stores advanced 2.8%. There were also increases in receipts at furniture outlets as well as sporting goods, hobby, musical instrument and book stores. Sales at electronics and appliance stores rebounded 3.8%.

But sales at clothing stores fell 0.7%. Sales at restaurants and bars were unchanged despite an ebb in COVID-19 infections, driven by the Delta variant. Restaurants and bars are the only services category in the retail sales report. These sales were up 29.3% from last October.

Economists speculated that either high inflation was forcing consumers to cut back on eating out or that spending had permanently shifted in favor of goods.

“If services spending has largely recovered, strong goods demand increasingly looks to be a structural shift in consumer preferences, rather than a temporary COVID-related outcome,” said Andrew Hollenhorst, chief U.S. economist at Citigroup in New York.

Excluding automobiles, gasoline, building materials and food services, retail sales shot up 1.6% last month after rising 0.5% in September. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Adjusting for inflation, retail sales are up at a roughly 5% annualized rate from the third-quarter average.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity rose at a tepid 1.7% rate last quarter. Economists at JPMorgan boosted their fourth-quarter GDP growth estimate to a 5% rate from a 4% pace. Goldman Sachs raised its estimate by 0.5 percentage point to a 5.0% rate. The economy grew at a 2% rate in the third quarter.

The economic picture was further brightened by a separate report from the Federal Reserve on Tuesday showing manufacturing output surged 1.2% last month to its highest level since March 2019, after falling 0.7% in September.

“The economy has thrown off whatever lethargy it might have had in the summer, and it is growing quite strongly,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

Businesses are also making steady progress replenishing depleted inventories, which should help to keep factories humming and support the economy. Business inventories increased 0.7% in September, a third report from the Commerce Department showed.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)