Russia to Cut Oil Output, Sending Prices Higher Russia said it plans to cut production by around 500,000 barrels a day, or about 5%, next month, sending crude prices higher in a move that Moscow said was in response to Western oil sanctions.
(…) Some analysts, though, said the move reflected Russia’s challenges in selling its oil amid the Western sanctions. (…) An additional EU ban on Russian refined products and a G-7 price cap on those products came into force Sunday. (…)
In January, Russian oil production stood at 10.9 million barrels a day, just slightly under the 11 million barrels a day recorded in February 2022, according to Viktor Katona, lead crude analyst at Kpler, a commodities-data firm. (…)
China’s Consumer Inflation Picks Up as Recovery Gathers Pace
The consumer price index rose 2.1% from a year earlier, the National Bureau of Statistics said Friday, up from 1.8% in December and matching the median estimate in a Bloomberg survey. Core inflation, which doesn’t include volatile food and energy prices, rose to 1% — the highest since June — a sign of stronger demand in the economy. (…)
Services prices rose 1%, slightly faster than December’s 0.6% increase. (…)
Producer deflation deepened in January, with prices falling 0.8% from a year earlier, largely because of softer commodity costs. Economists surveyed by Bloomberg had expected a 0.5% decline. (…)
Chinese property brokers despair as homebuyers sit on sidelines “It will take a long time for confidence to be restored,” said the executive at the Wuhu developer
U.S. Jobless Claims Climbed Last Week but Remain Historically Low
Initial jobless claims, a proxy for layoffs, increased by 13,000 to a seasonally adjusted 196,000 last week, the Labor Department said Thursday. In 2019, when the labor market was also tight, claims averaged about 220,000 a week.
The four-week moving average of weekly claims, which smooths out volatility, fell slightly to 189,250. (…)
Mass Layoffs or Hiring Boom? What’s Actually Happening in the Jobs Market Restaurants, hotels and hospitals are finally staffing up, more than making up for losses in tech and other sectors. “Knock on wood, things are running like they were before the pandemic,” said one restaurant executive.
(…) Employers in healthcare, education, leisure and hospitality and other services such as dry cleaning and automotive repair account for about 36% of all private-sector payrolls. Together, those service industries added 1.19 million jobs over the past six months, accounting for 63% of all private-sector job gains during that time, up from 47% in the preceding year and a half.
By comparison, the tech-heavy information sector, which shed jobs for two straight months, makes up 2% of all private-sector jobs. (…)
The sectors driving job growth include hotels, hospitals and restaurants, which laid off workers amid pandemic shutdowns and social distancing in 2020. After demand surged during reopenings, they started hiring again. But they struggled to land enough new employees and retain existing ones. (…)
Now, with the effects of the pandemic diminishing, many executives and business owners in services industries say they are finding it easier to recruit and fill jobs. (…)
In January alone, restaurants and bars added a seasonally adjusted 99,000 jobs. The healthcare industry grew by 58,000, and retailers added 30,000 jobs as fewer holiday-season workers were let go than in past years. (…)
Business owners, executives and economists say there are several reasons more workers are searching for jobs: bigger paychecks and benefits, diminishing fear of getting sick, and financial worries amid high inflation. The result is that employers, including small-business owners, are finding it easier to fill jobs.
With Covid-19 cases down, fewer workers are concerned about getting or spreading Covid than in the previous two winters when the virus surged. That might be boosting searches for jobs that require close personal contact, such as restaurant server, cafeteria worker and hairdresser. Job seekers also are less likely to be sick with or caring for someone sick with Covid, according to the U.S. Census Bureau.
Hiring in the healthcare services sector, including by hospitals, outpatient centers and nursing homes, has provided a boost to overall jobs numbers because the sector accounts for 16% of all private-sector payrolls.
Healthcare payrolls have grown at a robust pace in recent months as more candidates step forward to meet demand. Job applications for healthcare positions on recruiting platform iCIMS rose 7% from January 2022 through December, while they declined in industries such as manufacturing, finance and technology. (…)
More women are flowing back into the labor force, which could help service-sector employers fill positions that traditionally have been held by women. Labor-force participation for women in their prime working years of 25 to 54 returned to prepandemic levels in January. (…)
“We’re definitely seeing a renaissance in terms of people…coming back to the [restaurant] industry.” (…)
Just when Mr. Powell said “Shortage of workers feels more structural than cyclical.”
- “The rate of e-commerce growth in our core markets has decelerated. Inflationary pressures have affected discretionary consumer spending and post-COVID spending patterns are still evolving,” [Paypal] acting finance chief Gabrielle Rabinovitch said in a call with analysts.
Treasury Yield-Curve Inversion Reaches Deepest Level Since 1980s
The yield on the shorter-dated Treasury at one point exceeded the longer-dated note’s by as much as 86 basis points. The two-year rate was 4.10% on Feb. 2, before stronger-than-expected January employment data sparked a reassessment of how much higher the Fed’s policy rate might need to go to stifle inflation. (…)
Overnight index swaps have pushed pricing for a peak in the federal funds rate to about 5.1% in July, suggesting a target range of 5% to 5.25%. But trades in interest-rate options this week hedging the risk of a 6% rate have rattled the policy-sensitive two-year note. (…)
(NDR via CMGWealth)
U.S. Poised to Further Tighten Technology Exports to China After Balloon Incident China risks losing even more access to Western technology, as Washington and its allies consider punishing Beijing with stiffer restrictions on products it needs to advance its military and economic might.
There’s more:
- The Chairman of the House Armed Services Committee is vowing to expel all Chinese goods and materials from the United States’s defense supply chains. Chairman Mike Rogers (R-Ala.) said that he would lead the effort to expunge China-sourced goods during a Feb. 8 hearing of the committee on the subject of defense-industrial base security. “The greatest concern I have with the defense industrial base is our continued reliance on China as the source of raw materials,” Rogers said. “I won’t stop until we’ve completely rid the defense supply chain of Chinese goods and materials.” (via ZeroHedge)
Government’s Borrowing Costs Rise During Debt-Ceiling Clash An era of ultracheap debt is over in Washington as higher borrowing costs widen the U.S. deficit and fuel a partisan clash over raising the debt ceiling and how much borrowing could be too much.
The Treasury’s spending on interest on the debt is up 41% to $198 billion in the first four months of this fiscal year compared with $140 billion in the same period last year, according to a Congressional Budget Office estimate of spending through January.
Paying more for interest on the debt has been among the government’s largest spending increases so far this year, the CBO said. (…)
In projections last year, the CBO said that spending on net interest on the debt as a percentage of U.S. gross domestic product would roughly double from 1.6% in 2022 to 3.3% in 2032. Those estimates, which the nonpartisan agency will update next week, assumed that the Fed would raise the federal-funds rate to 1.9% by the end of 2022 and reach 2.6% by the end of 2023. (…)
TECHNICALS WATCH
- Nothing to fear but fear itself
@LanceRoberts
- S&P 500 Large Cap Index – 13/34–Week EMA Trend
- To give you a sense of how extreme the optimism has become. Here is a daily tracking (orange line) of the Daily Trading Sentiment number. The dotted line across the top shows prior extreme highs. (Steve Blumenthal)
