Aurelia Butler

Hatzius argued that the most severe negative impacts have already been felt, and the majority of the drag on GDP growth from the Fed’s monetary tightening was experienced in 2022 and early 2023. The recent rise in long-term interest rates has extended the economic deceleration for a few more quarters, but Goldman anticipates these influences will soon fade.Goldman Sachs suggests that the lag between monetary tightening and GDP growth is shorter than commonly assumed, initiating when markets predict tightening. Hatzius maintains a positive outlook on the economy, forecasting that inflation can decrease without causing substantial harm to the economy.He also predicts continued growth in real disposable household income, which will be beneficial for consumers. With inflation enduring slightly above 2%, Hatzius expects the Fed will abstain from any rate changes until Q4 of 2024.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

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NEW YORK (Reuters) -Unions representing hospitality workers in Las Vegas said they reached a “historic” tentative deal with Caesars (NASDAQ:CZR) Entertainment for a new contract for 10,000 employees on Wednesday, two days before a strike threatened to shut down the Strip.The negotiations come as unions across industries press employers for better pay and benefits, buoyed by a shortage of workers. Casino resort operators have been earning record profits from a steady post-pandemic recovery in Las Vegas tourism.The Culinary Workers and Bartenders Unions said the tentative five-year contract is of a “historic nature” given the wage increases in the first year and funds allotted to healthcare and pensions, according to Ted Pappageorge, Culinary Union Secretary-Treasurer.Caesars Entertainment, the second-biggest Las Vegas casino operator by number of employees, said the deal provides “meaningful wage increases” and aligns with plans to bring more union jobs to the Strip. The Las Vegas unions, considered among the most powerful in the United States, said it has also reduced the workload for housekeepers for the first time in 30 years and has negotiated language to be able to campaign and support non-union workers on the strip. “As a package, we think this is the best contract we’ve ever had,” Pappageorge told reporters on a call. Visits to the city in September were 4% lower than in the same period in 2019, according to data from the Las Vegas Convention and Visitors Authority. Room rates, however, have surged more than 47%.The city is gearing up for events including the Formula 1 Las Vegas Grand Prix this month, which is expected to draw thousands of tourists.”Companies that can’t afford a strike shutdown are going to face the most pressure to make big concessions,” said Erik Gordon, a University of Michigan business professor. “It’s taken a little too long in my opinion,” said Daniel Busby, 33, a fry cook at the Paris Las Vegas Hotel and Casino operated by Caesars, before the deal was reached. “We are just asking to be able to live a little bit more comfortably.” The unions have been in talks with the casinos for about seven months and 95% of their members had voted at the end of September to authorize a city-wide strike.TALKS WITH MGM, WYNN CONTINUETalks with casino operators MGM Resorts (NYSE:MGM) International and Wynn Resorts (NASDAQ:WYNN) are yet to yield an agreement ahead of Friday’s deadline for a strike. A strike at MGM and Wynn would affect nine casino resorts and 25,000 workers, a majority of whom are employed by MGM. MGM said it expects to reach an agreement with the unions Wednesday and the deal will result in the largest pay increase in the history of its contracts with the unions, MGM chief executive officer, William Hornbuckle told investors on an earnings call. Wynn said its next bargaining session with the unions is scheduled for Thursday.MGM has said every 1% increase in wages will equal about $10 million of additional labor costs, according to Truist analyst Barry Jonas. Jonas estimated that wage increases could lift annual costs by $40 million to $60 million for Caesars and double that amount for MGM, based on their employee figures.The Culinary and Bartenders unions represent some 53,000 workers based in Vegas.Caesars and MGM shares gained 1%, while Wynn Resorts dropped 0.3%. More

WASHINGTON (Reuters) – The U.S. Senate voted 50-48 to overturn President Joe Biden’s decision to waive some “Buy America” requirements for government-funded electric vehicle charging stations but the White House said he would veto the measure.The White House argued the Republican bill would eliminate entirely the domestic manufacturing requirement for government-funded electric vehicle (EV) chargers “thereby harming domestic manufacturing and American jobs.”Senate Democrats Sherrod Brown, Joe Manchin, Jon Tester and independent Kyrsten Sinema joined Republicans in voting to reject the regulation.The Federal Highway Administration (FHWA) in February agreed to waive some requirements until July 2024, saying it would enable “EV charger acquisition and installation to immediately proceed.”Congress has set aside $7.5 billion to fund electric vehicle charging stations. The funding is crucial to the Biden administration’s plans to ramp up electric vehicle sales.The White House said the bill to rescind the waiver would also overturn the FHWA decision to extend Buy America rules to EV chargers.As a result, the 1983 Reagan administration decision to exempt manufactured products from Buy America requirements would again apply, meaning EV chargers would not be covered by any Buy America requirements, the White House said.Republican Senator Marco Rubio challenged the White House argument, arguing the administration could separately rescind the 1983 decision at any time. Rubio said the waiver would allow government funds to “go into the hands of Chinese companies to build electric vehicle charging stations.”Under the 2021 bipartisan infrastructure law, infrastructure projects like EV chargers must obtain at least 55% of construction materials, including iron and steel, from domestic sources and U.S. manufactured.The rules do not start imposing the 55% requirement until July 2024 and EV chargers produced by then can receive funding if installation begins by October 2024.EV chargers require iron and steel for some of their most crucial parts, including the internal structural frame, heating and cooling fans and the power transformer. Chargers with cabinets that house the product require even more steel, making up to 50% of the total cost of the chargers in some cases.U.S. states and companies warned global demand for EV chargers is straining the supply chain, making it difficult, if not impossible, to meet made-in-America standards and expedite construction of new chargers. More

NEW YORK (Reuters) -U.S. Council of Economic Advisers Chair Jared Bernstein said on Wednesday he did not “thus far” see the Israel-Gaza war as an exogenous shock that could derail U.S. economic growth, but noted that Washington was watching its impact on oil prices.Bernstein said he remained generally upbeat about the U.S. economy, and did not expect a possible government shutdown to result in a recession, although it was hard to be sure without knowing the length of any potential disruption.”I’d say from the tailwind perspective, we’re looking at a pretty clear transition to steady and stable growth,” he told the Reuters NEXT conference in New York, citing a “gangbuster” of GDP growth, low unemployment rates and real wage gains.”On the headwind side, certainly being in a higher rate environment is something we have to be mindful of. There is obviously a terrible new conflict in a part of the world that is sensitive for energy production, so we have to watch the price of oil, which has actually come down recently.”The price of U.S. crude initially jumped after the militant Hamas group’s Oct. 7 attack on Israel, but it has since fallen to about $75 per barrel, the lowest since July.The U.S. economy has defied nearly universal expectations that the Federal Reserve’s aggressive rate hikes – beginning in March 2022 – would bring activity to a halt and trigger a recession and a rise in joblessness.Instead, the economy in the most recent quarter grew at a 4.9% annualized rate, more than double the pace that Fed policymakers see as its long-term trend potential of 1.8%. However, there are signs emerging that the 5.25 percentage points of rate hikes the Fed has imposed is beginning to weigh on parts of the economy and could finally slow consumer spending, which has continued to rise at a rate above its pre-pandemic trend.Job growth recently has slowed as well and the unemployment rate in October rose to 3.9%, the highest in nearly two years, but it remains near historic lows. Fed officials in their most recent projections in September estimated on balance that the jobless rate would edge up a bit further next year – to 4.1% – before leveling off around 4%.Bernstein said the U.S. economy was outperforming virtually all its competitors and urged Congress to pass the necessary appropriations bills to keep the government running.”Congress has a responsibility to keep the lights on … at a time when we really don’t need any own-goal kicks. There’s a lot of stuff going on in the world. We’ve got a very strong backdrop to a U.S. economy that’s outperforming virtually all our competitors,” he said. “We’d like to keep it that way.”Asked about recent negative polls reflecting concern about President Joe Biden’s handling of the economy, Bernstein said Americans had to reset their price expectations given an increase in their buying power.Bernstein said the Biden administration had taken a series of steps to ease prices while maintaining a strong labor market. More

(Reuters) – National Australia Bank (OTC:NABZY) on Thursday reported a rise in annual cash profit as it benefited from higher interest rates, but cautioned elevated competition and inflationary pressures that crimped second-half earnings by 10% would persist.The country’s second-largest lender reported stronger annual earnings on deposits and capital against the backdrop of higher interest rates, which has allowed Australian lenders to widen their margins and capitalise on higher borrowing costs.But for the half-year ended Sept. 30, cash earnings sank as the impact of monetary policy tightening and inflationary pressures crippled households and the economy.”This has seen our financial results soften in 2H23 compared with 1H23,” NAB CEO Ross McEwan said in a statement. “While the economic transition has further to go, we are well placed to navigate this environment.”NAB’s net interest margin, a key metric of profitability, shrank to 1.71% as of Sept. 30, from 1.77% seen at March-end. The lender’s full-year cash profit of A$7.73 billion ($4.95 billion) for the year ended Sept. 30 was up 8.8% from a year earlier and marginally lower than consensus estimates of A$7.80 billion. The annual performance of its business and institutional banking divisions stood out with of 10.1% and 14.9% in cash profits respectively, while the personal banking division was a drag on its results, posting a 9.1% decline in cash earnings to A$1.45 billion.The bank reported a jump in its credit impairment charge for the year to A$802 million, up from just A$125 million a year ago, which it said reflected volume growth and worsening asset quality.The bank declared a final dividend of 84 Australian cents per share, up from 78 Australian cents apiece a year earlier.($1 = 1.5620 Australian dollars) More

(Reuters) -Swedish electric vehicle maker Polestar (NASDAQ:PSNY) trimmed its 2023 delivery forecast on Wednesday to the lower end of its earlier guidance and halved its gross margin target, amid fears of a slowdown in EV demand and global economic uncertainty.High interest rates to cool stubborn inflation have hampered sentiment as consumers looking to buy EVs face higher borrowing costs that largely offset price cuts by automakers to stimulate demand. Polestar, which operates in 27 markets globally, said it would now deliver about 60,000 vehicles this year, down from between 60,000 to 70,000. It had reiterated that forecast just last month after slashing the target in May from the 80,000 it had estimated earlier. The U.S.-listed company, founded by China’s Geely and Volvo (OTC:VLVLY) Cars, also said it would achieve a gross margin of 2% in 2023, down from its prior 4% forecast.The company said on Wednesday it would double down on cutting costs to boost margins and that it had secured additional term loans from Volvo and Geely totaling $450 million, maturing June 2027. “These actions and these initiatives are done in the context of what is currently a more challenging market environment and that’s reflected in our volume aspirations,” Polestar Chief Financial Officer Johan Malmqvist said in an interview with Reuters.CEO Thomas Ingenlath said Polestar, with its focus on premium rather than mass market sales, was chasing profitability rather than volumes and would shy away from cutting prices. Wednesday’s revised forecast from Polestar came after market leader Tesla (NASDAQ:TSLA)’s CEO Elon Musk last month flagged his concerns over expanding factory capacity until interest rates fall, in line with similar caution from General Motors (NYSE:GM) and Ford (NYSE:F). EV startup Lucid (NASDAQ:LCID) cut its full-year production forecast on Tuesday “to prudently align with deliveries.”Even as pandemic-driven supply chain bottlenecks eased, Polestar has grappled with a delayed production start and growing competition, especially from Chinese players, forcing the company to cut jobs to keep a lid on costs.After the additional loans from Volvo and Geely and efforts to reduce costs, Polestar said it would need external funding of about $1.3 billion in debt and equity until cash flow breaks even in 2025.The company said it sees gross margin in the high teens with a total annual volume of about 155,000 to 165,000 vehicles in 2025.Polestar reported cash and cash equivalents of $951.1 million as of the end of September, compared with $1.06 billion three months prior.Revenue for the third quarter rose 41% to $613.2 million, driven primarily by increased prices of its vehicles, but higher expenses led to operating losses swelling 33% to $261.2 million. More

TOKYO (Reuters) – Almost half of Japanese companies see the conflict between Israel and Palestinian militants Hamas potentially hitting their earnings, citing concerns about a further rise in oil and commodity prices, the latest Reuters corporate survey showed.On the issue of ending negative interest rates, which have been a key pillar of Japan’s central bank’s accommodative monetary policy, nearly half of Japanese firms said they expected it to happen by the middle of next year.Forty-eight percent of firms polled by Reuters said the Israel-Hamas conflict would affect their earnings negatively, the poll showed, roughly on par with the 49% who expected no particular impact and outstripping the 3% who saw a positive effect.”Worsening of the Middle East situation will lead to a sharp rise in raw material and fuel prices,” a manager at a chemical manufacturer wrote in the survey.In the survey, 46% of firms that responded to a question about how much oil prices are likely to rise in the near future said they expected them to increase to $120 a barrel or higher. North Sea Brent crude is now around $81 a barrel.The poll highlighted wider worries about conditions in the Middle East. Among concerns about instability in the Middle East, two-thirds of respondents cited rises in raw material prices other than oil.About half of them said they feared more global inflation, while two-fifths saw potential shortages of oil products and those made of them, according to the survey.The monthly Reuters Corporate Survey of 502 large and mid-sized non-financial Japanese firms, in which 251 responded, showed 46% of companies expected the Bank of Japan (BOJ) to end negative interest rates by the June 2024 quarter or earlier.The BOJ last week eased its hold on long-term rates by watering down a 1% cap set for the 10-year yield as a reference rather a rigid ceiling.Sources have said its next focus is to end its negative interest rate policy and push short-term rates to zero, from the current -0.1%.In the survey, 40% of firms said the negative interest rate policy was having a positive impact on their companies’ management.The survey was conducted for Reuters by Nikkei Research on Oct. 24-Nov. 2, with firms responding on condition of anonymity to allow them to speak more freely. More