Evelyn Reynolds

At the three-year range, expectations rose 0.3 percentage point to 2.7%, while the five-year outlook jumped even more, up 0.4 percentage point to 2.9%.
The indications are well ahead of the Fed’s 2% goal for 12-month inflation, indicating that the central bank may need to keep policy tighter for longer.

Customers shop at a Costco store on August 31, 2023 in Novato, California. According to a report by the Commerce Department, consumer spending rose 0.8% in July beating expectations of 0.7%. (Photo by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images News | Getty Images

Consumers increasingly doubt the Federal Reserve can achieve its inflation goals anytime soon, according to a survey Monday from the New York Federal Reserve.
While the outlook over the next year was unchanged at 3%, that wasn’t the case for the longer term. At the three-year range, expectations rose 0.3 percentage point to 2.7%, while the five-year outlook jumped even more, up 0.4 percentage point to 2.9%.

All three are well ahead of the Fed’s 2% goal for 12-month inflation, indicating the central bank may need to keep policy tighter for longer. Economists and policymakers consider expectations as a key factor in viewing the path of inflation, so the Survey of Consumer Expectations for February could be bad news.
“Longer-term inflation expectations appear to have remained well anchored, as reflected by a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets,” Fed Chair Jerome Powell said last week during testimony on Capitol Hill. “We remain committed to bringing inflation back down to our 2 percent goal and to keeping longer-term inflation expectations well anchored.”

Headline inflation as judged by personal consumption expenditures prices, the Fed’s preferred gauge, rose 2.4% in January — or 2.8% at the core level when excluding food and energy. Those readings represented progress in the Fed’s battle, though some economists have warned the “last mile” back to 2% would be the most difficult.
The Fed is expected to hold rates steady when it meets next week, with market pricing pointing to a cut in June followed possibly by three more before the end of the year, according to CME Group gauging of futures markets.
Other inflation measures in the February survey offered some hope.

Most notably, the outlook for rent costs decreased to 6.1%, down 0.3 percentage point for the lowest reading since December 2020. Shelter has remained the most stubborn of the inflation components but one Fed officials think will ease as the year goes on and tenants negotiate new leases.
Elsewhere, the one-year outlook for gas rose 0.1 percentage point to 4.3%, fell by 1.8 percentage points to 6.8% for medical care and was unchanged for food at 4.9%. The outlook for household spending over the next year rose to 5.2%, up 0.2 percentage point.
Respondents also indicated some unease over job prospects. The perceived probability for losing one’s job in the next year rose to 14.5%, an increase of 2.7 percentage points.

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Former President Donald Trump on Monday indicated he’s likely to reinstate duties on foreign goods should he win election to a second term.
Trump called out the Chinese automobile industry specifically for future targeting.
“China is right now our boss. They are the boss of the United States, almost like we’re a subsidiary of China,” he said.

Proclaiming that “I’m a big believer in tariffs,” former President Donald Trump on Monday indicated he’s likely to reinstitute duties on foreign goods should he win election to a second term.
In a CNBC interview, Trump cited both economic and political benefits from targeting foreign goods entering the U.S.

“I fully believe in them economically when you’re being taken advantage of by other countries,” the presumptive Republican nominee said during a “Squawk Box” interview, referring to tariffs. “Beyond the economics, it gives you power in dealing with other countries.”
The comments come as Trump is running a close race in the polls with President Joe Biden. With his latest slew of victories in the Republican primaries and all his opponents dropping out, Trump looks set to become the party nominee in a race where the economy will loom large.
During his administration, from 2017-21, Trump instituted a variety of tariffs on China, Mexico, the European Union and others. In particular, he slapped 25% duties on imported steel as well as aluminum.
In China’s case, many of the tariffs have remained in place under the Biden administration.
“China was taking advantage of us on the steel. They were destroying our entire steel industry, which was never doing very well over the last 25 years anyway … because it’s been eaten alive by foreign competition,” Trump said. “I put a 50% tax on China’s steel coming in. And every person in the steel industry, when they see me they started crying. They would hug me.”

Trump called out the Chinese automobile industry specifically for future targeting.
“China is right now our boss. They are the boss of the United States, almost like we’re a subsidiary of China,” he said.
China produced about 30 million vehicles in 2023 and saw about a 50% year-over-year increase in January, according to MarkLines. A group of Democratic senators from auto-producing states recently urged Biden to slap tariffs on Chinese electric vehicles entering the U.S.
Trump said he would seek tariffs to try to get China to build more of its cars in the U.S.
“The whole topic of tariffs is so simple. No. 1, it’s great economically for us, and it brings our companies back, because if you charge tariffs to China, they’re going to build … their car plants here and they’re going to employ our people,” he said. “We don’t want to get cars from China. We want to get cars made by China in the United States using our workers.”
Critics charge that tariffs are counterproductive because they make imported goods more expensive. Inflation, however, was subdued during Trump’s time in office, as the consumer price index rose less than 8% total over the four-year span, compared with about 18% under Biden.

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Saudi Arabia’s state oil giant Aramco reported a 25% decline in profit to $121.3 billion in 2023, down from $161.1 billion in 2022.
The result still represents Aramco’s second-highest ever net income.
The earnings come after the Saudi government transferred an additional 8% of Aramco shares, worth $164 billion, to Saudi Arabia’s Public Investment Fund.

Logo of Aramco, officially the Saudi Arabian Oil Group, Saudi petroleum and natural gas company, seen on the second day of the 24th World Petroleum Congress at the Big 4 Building at Stampede Park, on September 18, 2023, in Calgary, Canada. 
Artur Widak | Nurphoto | Getty Images

Saudi Arabia’s state oil giant Aramco reported a 25% decline in profit to $121.3 billion in 2023, down from $161.1 billion in 2022, and boosted its mega dividend payout despite “economic headwinds.”
Aramco raised its base dividend for the fourth quarter by 4% to $20.3 billion dollars, and lifted its performance-linked dividend by 9% to $10.8 billion, resulting in a $31 billion dollar payday for the Saudi government and Aramco stakeholders.

Despite the earnings decline, the result still represents Aramco’s second-highest net income on record, far outpacing the profitability of its largest global peers.
“The year-on-year decrease can be attributed to lower crude oil prices and volumes sold, as well as reduced refining and chemicals margins, partially offset by a decrease in production royalties during the year and lower income taxes and zakat,” Aramco said in a statement. 
Aramco said total revenue also fell 17% to $440.88 billion, down from $535.19 billion last year. Free cash flow also fell to $101.2 billion in 2023, compared to $148.5 billion in 2022. 
“It was a year that saw global oil demand reach record levels despite geopolitical volatility, economic headwinds, and inflationary pressures,” Aramco CEO Amin Nasser told the earnings call on Sunday. 
“We expect the global oil market to remain healthy over the remainder of this year, and we expect it to be fairly robust with growth of about 1.5 million barrels,” Nasser added. Saudi Arabia led OPEC+ countries last week in a decision to extend voluntary oil output cuts until the end of June.

Changing Hands

The earnings come after the Saudi government transferred an additional 8% of Aramco shares, worth $164 billion, to Saudi Arabia’s Public Investment Fund (PIF). Yasir Al-Rumayyan is both the chairman of Aramco’s Board of Directors and the governor of the PIF. 
The share transfer to PIF is one of the largest transactions Aramco has undertaken since listing, and will allow the PIF to benefit from Aramco’s mega dividend payout policy. 
Aramco paid $97.8 billion in dividends in 2023, up 30% from 2022. The full year performance-linked dividend for 2024 is expected to be $43.1 billion alone.
The share transfer “doesn’t change anything,” Aramco Chief Financial Officer Ziad Al-Murshed told the earnings call. “We’re healthy and we have no need to issue new equity,” he said in response to a question about speculation of a secondary or additional public share offering. 

PIF already owned 4% of Aramco, and controls Sanabil, a financial investment firm, which owns 4% of Aramco as well. The PIF’s 16% state in Aramco, worth an estimated $328 billion, will strengthen the fund’s financial position and boost its ability to deploy capital to invest on behalf of the Saudi state, which is gradually diversifying its economy away from oil.
The new Aramco stake also pushes PIF closer to achieving its end-2025 target of $1 trillion in assets under management.

More Investment

Aramco confirmed it would halt plans to raise its oil production capacity from 12 million barrels per day to 13 million barrels per day — a move expected to reduce capital investment by approximately $40 billion between 2024 and 2028.
“The recent directive from the government to maintain our Maximum Sustainable Capacity at 12 million barrels per day provides increased flexibility, as well as an opportunity to focus on increasing gas production and growing our liquids-to-chemicals business,” Nasser said. 
Aramco’s average hydrocarbon production was 12.8 million barrels of oil equivalent per day in 2023, including 10.7 million barrels per day of total liquids.
Aramco aims to ramp up its investments in other ventures including gas and gas infrastructure. It has a target to increase gas production by more than 60% by 2030, compared to 2021 levels. Its flagship gas investment is the Jaffoura project — the largest gas play in the Middle East — with an estimated 200 trillion standard cubic feet of natural gas.  More

Black women saw their unemployment rate fall to 4.4% from 4.8%.
Among Hispanic women, the unemployment rate jumped to 5% from 4.3%.
Valerie Wilson, director at the Economic Policy Institute’s Program on Race, Ethnicity and the Economy, said that the labor market is showing positive signs for Black women.

A sign posted outside a restaurant looking to hire workers in Miami on May 5, 2023.
Joe Raedle | Getty Images News | Getty Images

Unemployment among Black women fell in February as the number of those looking for work increased, data released Friday by the U.S. government showed.
The U.S. unemployment rate edged higher last month to 3.9% from 3.7% in January, according to the U.S. Bureau of Labor Statistics on Friday. Adult women age 20 and older in the labor force followed that trend, with the unemployment rate ticking up to 3.5% from 3.2%.

The percentage of unemployed Black women, however, fell to 4.4% from 4.8%. This comes as the labor force participation rate within the group — which measures how many workers are currently employed or searching for work — rises to 63.4% from 62.9%.

Valerie Wilson, director at the Economic Policy Institute’s Program on Race, Ethnicity and the Economy, said that the labor market is showing positive signs for Black women. She pointed to the decrease in the unemployment rate, while the employment/population ratio edged higher to 60.6% from 59.9%.
“That seems unambiguously that things are moving in a positive direction,” she told CNBC.
As for why the cohort was able to buck the trend, Wilson said it could be due to the specific industries that added jobs last month.
“We saw increases in health care and government services, which are sectors where we see a significant number of Black women being employed,” she said. “The fact that those were two sectors that added jobs and had the highest job growth in the last month is probably a factor in that increased participation rate and reduced unemployment rate.”

For Hispanic women, unemployment rose to 5% from 4.3%.
Overall, with the unemployment rate still sitting below 4%, this month’s report paints the picture of a strong labor market, Wilson said.
“At this point, at that lower rate of unemployment, you’re not going to get huge shifts as long as that growth is still positive on the net,” she said. While economists could still see slight moves from month to month, at the current pace of U.S. job growth, the labor market should remain stable and steady.
— CNBC’s Gabriel Cortes contributed to this report.

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