Aurelia Butler

WASHINGTON (Reuters) – U.S. consumer confidence rose to a six-month high in August amid optimism over the economic outlook, but Americans are becoming more anxious about the labor market after the unemployment rate jumped to near a three-year high of 4.3% last month.The better-than-expected reading in consumer confidence, reported by the Conference Board on Tuesday, reflected improved perceptions of business conditions over the next six months, and the survey suggested the odds of a recession had continued to decline. Consumers’ uneasiness over the labor market is mirrored by concerns at the Federal Reserve, with Fed Chair Jerome Powell last Friday signaling interest rate cuts were imminent.”This report supports a rate cut on both the decline in inflation expectations and a softening labor market, but is not so weak as to suggest a recession at this point,” said Conrad DeQuadros, senior economic adviser at Brean Capital.The Conference Board’s consumer confidence index increased to 103.3 this month, the highest level since February, from an upwardly revised 101.9 in July. Economists polled by Reuters had forecast the index would be little changed from the previously reported 100.3. Confidence was higher among consumers aged 35 years and older, and those with annual incomes above $100,000. The cutoff date for the survey was Aug. 21. The rise in confidence could have been influenced by President Joe Biden dropping out of the November presidential race and the nomination of Vice President Kamala Harris to head the Democratic Party ticket.The Conference Board made no mention of any political impact. The University of Michigan this month, however, attributed the rise in its consumer sentiment measure in August to increased optimism among Democrats compared with Republicans.Former President Donald Trump is the Republican Party candidate in the upcoming election.The Conference Board’s Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, improved to 82.5. That was the highest level since August 2023 and was up from 81.1 in July. It was the second straight monthly reading above 80. A reading below 80 usually signals a recession ahead.Consumers were less upbeat, however, about the labor market. The share of consumers who viewed jobs as “plentiful” slipped to 32.8% from 33.4% in July. Some 16.4% of consumers said jobs were “hard to get,” up from 16.3% last month.The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, fell to 16.4, the narrowest since March 2021, from 17.1 in July. This measure correlates to the unemployment rate in the Labor Department’s monthly employment report. The unemployment rate has risen for four straight months.”While we wouldn’t necessarily use it to predict month-to-month changes in the unemployment rate, the fact that it keeps worsening is not a good development,” said Abiel Reinhart, an economist at J.P. Morgan, referring to the labor market differential. “The message here is that the July unemployment increase was not just a fluke.”Stocks on Wall Street were little changed. The dollar fell against a basket of currencies. U.S. Treasury yields rose.RATE CUTS COMINGConsumers’ 12-month inflation expectations dropped to 4.9%, the lowest level since March 2020, from 5.3% in July. Financial markets expect the U.S. central bank to kick off its easing cycle next month with a 25-basis-point rate reduction, though a half-percentage-point cut cannot be ruled out. The Fed has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for more than a year, having raised the policy rate by 525 basis points in 2022 and 2023. With job growth ebbing, consumers were more pessimistic on their income prospects over the next six months. The share of consumers expecting their incomes to increase fell to 16.9% from 17.2% in July. The proportion anticipating a decline rose to 12.7% from 11.6% last month.Rising worries about finances weighed on buying plans for the next six months. At face value that would suggest softer consumer spending in the months ahead, but there is not a strong correlation between confidence and spending.”Politically-driven shifts in sentiment tend to be poorly correlated with spending decisions,” said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.Buying plans for motor vehicles fell as did those for major household appliances. The share of consumers intending to purchase a house was the smallest since early 2013. Higher mortgage rates and home prices have pushed the dream of owning a home out of the reach of many Americans.But relief could be in sight as the reduced affordability has increased the supply of homes on the market, helping to curb house price inflation.A separate report from the Federal Housing Finance Agency on Tuesday showed single-family home prices dipped 0.1% on a month-on-month basis in June after being unchanged in May. They increased 5.1% in the 12 months through June, the smallest year-on-year rise since July 2023, after advancing 5.9% in May. New housing supply has surged to levels last seen in early 2008. The existing homes inventory has also risen to the highest level in nearly four years. An outright decline in house prices is unlikely, however, in the absence of significant labor market deterioration.”Annual home price growth is on track to slow to just above 3% by year end, and we expect it to stabilize around that pace,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. More

LAGOS (Reuters) – More than 31.8 million Nigerians are acutely short of food due to security challenges and the removal of fuel subsidies, the government said on Tuesday, citing a study by several of the country’s international development partners. The scale of the shortages, which have led to malnutrition among women and children, was set out by the development partners at a meeting with the government on Monday and Tuesday, the ministry of budget and economic planning said in a statement.The findings indicate a sharp rise from the 18.6 million people assessed as vulnerable to acute food insecurity from October to December 2023 by the U.N. World Food Programme.”The surge in food commodity prices, which is as a result of the removal of fuel subsidy in addition to security challenges, has placed millions of Nigerians in a precarious situation,” the ministry said.Raids by bandits wielding guns and machetes have forced many farmers to leave their fields, contributing to higher food prices and soaring inflation as Nigeria faces the worst cost of living crisis in a generation.President Bola Tinubu, who took office in May 2023, removed fuel subsidies to cut down on government spending, in a move that led to a rise in the cost of transportation.The study was produced by development partners including the U.N. Food and Agriculture Organization, the Global Alliance for Improved Nutrition and the German development agency GIZ.The study used statistics from a nutrition analysis by the Cadre Harmonise, a regional food security framework.Sanjo Faniran, Nigeria’s national convener of Food Systems and director of social development in budget and economic planning ministry, said the study helped to identify gaps, successes and challenges, and offer recommendations. More

QUETTA (Reuters) – A Pakistani truck driver, who rescuers initially thought was dead, was recovering on Tuesday after hospital staff receiving bodies realised he was alive despite being shot five times in one of the most widespread attacks by ethnic militants in years.On Monday, Munir Ahmed was driving with three colleagues in a convoy of four trucks through the southern province of Balochistan.The drivers did not notice anything amiss and had not heard of any violence until they were about an hour outside of the provincial capital, Quetta. Suddenly, armed men crowded the dusty stretch of highway, waving at them to stop, ordering the drivers out of their trucks and lining them up on the roadside.Ahmed, 50, began to recite Islamic verses in fear.”We were all horrified,” he said. The gunmen opened fire and threw the men’s bodies into a stream, leaving them for dead. Meanwhile attackers along other roads were stopping buses, pulling off passengers and killing men in front of their families, the provincial chief minister later said. The Baloch Liberation Army (BLA), an armed militant group seeking secession of the resource-rich province bordering Iran and Afghanistan, took responsibility for the assaults.Authorities said at least 70 people were killed in the attacks and subsequent military operations, including 23 civilians pulled out of their vehicles.Rescuers put Ahmed and the lifeless bodies of his three colleagues into a vehicle to take to hospital, where medical staff realised he had survived. A nurse said he had been hit by five bullets in the arm and back but was in stable condition. Lying flat in a hospital bed, far from home in Punjab with his arm heavily bandaged, Ahmed said his memory of the attack was hazy and he was upset by his colleagues’ deaths, uncertain what would happen next after such a violent disruption to his livelihood. More

BRASILIA (Reuters) – Brazil’s Senate Economic Affairs Committee (CAE (NYSE:CAE)) will not hold a confirmation hearing next week for the candidate chosen by President Luiz Inacio Lula da Silva to head the central bank, the committee’s chair said.”It can wait. It won’t happen next week, I guarantee that,” Senator Vanderlan Cardoso told Reuters on Monday night. “We need the right moment, when discussions between the Senate and the government are better. Right now, we’re in a slightly delicate moment,” Cardoso said.Cardoso emphasized that the government has yet to present any names for the central bank and suggested that the mood might be more favorable for the Senate to quickly approve the nominations after the first round of municipal elections in early October.He also said that the government did not honor an agreement regarding a legislative decree that eases gun ownership rules, contributing to a sense of unease he believes could be resolved once the issue is settled.In practice, the process is likely to take longer than the government initially suggested. Finance Minister Fernando Haddad mentioned in mid-August that the issue was on Lula’s agenda for “the coming weeks.”Government members told Reuters, on anonymity, that anticipating the nomination would effectively spotlight the next central bank chief, even though Lula’s pick would only take office early next year, thereby diminishing the weight of statements from governor Roberto Campos Neto. Lula, who has criticized Campos Neto multiple times since taking office last year, needs to appoint his substitute, along with the next directors of regulation and institutional relations, who also take office in January 2025.Given the widespread expectation that current central bank monetary policy director Gabriel Galipolo will be chosen to head the central bank, the current vacancy in his role would also need to be filled in this reshuffle.Two other sources with knowledge of the matter told Reuters that the government is rethinking when Lula might unveil his appointments to the central bank’s board after senators signaled that it would be better to wait, citing the reduced presence of senators in Brasilia due to the election period.One of the sources said recent disputes between branches of government over the release of parliamentary appropriations could sour the mood for the confirmation hearings. More