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    Commerce Dept. Is on the Front Lines of China Policy

    The department has confronted the challenge of China by restricting key exports, a policy that is likely to continue in the Trump administration.The Commerce Department has traditionally focused on promoting the interests of American business and increasing U.S. exports abroad. But in recent years, it has taken on a national security role, working to defend the country by restricting exports of America’s most powerful computer chips.While the Trump administration is likely to remake much of the Biden administration’s economic policy, with a renewed focus on broad tariffs, it is unlikely to roll back the Commerce Department’s evolution.“I’m truthfully not terribly worried that the Trump administration will undo all the great work we’ve done,” Gina Raimondo, the commerce secretary, said in an interview. “Number one, it’s at its core national security, which I hope we can all agree on. But two, it is the direction that they were going in.”It was the first Trump administration that took the initial steps toward the Commerce Department’s evolution, Ms. Raimondo noted, with its decision to put the Chinese telecommunications company Huawei on the “entity list.” Companies on the list are deemed a national security concern, and transfers of technology to them are restricted.Ms. Raimondo came into the commerce job focused on confronting the challenge of China by building upon the Trump administration’s actions.She has overseen a significant expansion of U.S. economic and technology restrictions against China. The Biden administration transformed the tough but sometimes erratic actions the Trump administration had taken toward Beijing into more sweeping and systematic limits on shipping advanced technology to China.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Fed is on course to cut interest rates in December, but what happens next is anyone’s guess

    The not-too-hot, not-too-cold nature of the November nonfarm payrolls release gave the central bank whatever remaining leeway it may have needed to cut interest rates.
    Whether it should, and what it does from there, is another matter.
    “There’s no reason to cut rates right now. They should pause,” said economist Joseph LaVorgna, who served as a senior economist during President-elect Donald Trump’s first term.
    The only thing left on the docket that could dissuade the Fed from a December cut is the release next week of separate reports on consumer and producer prices.

    Jerome Powell, chairman of the US Federal Reserve, during the New York Times DealBook Summit at Jazz at Lincoln Center in New York, US, on Wednesday, Dec. 4, 2024.
    Yuki Iwamura | Bloomberg | Getty Images

    Friday’s jobs report virtually cements that the Federal Reserve will approve an interest rate cut when it meets later this month. Whether it should, and what it does from there, is another matter.
    The not-too-hot, not-too-cold nature of the November nonfarm payrolls release gave the central bank whatever remaining leeway it may have needed to move, and the market responded in kind by raising the implied probability of a reduction to close to 90%, according to a CME Group gauge.

    However, the central bank in the coming days is likely to face a vigorous debate over just how fast and how far it should go.
    “Financial conditions have eased massively. What the Fed runs the risk of here is creating a speculative bubble,” Joseph LaVorgna, chief economist at SMBC Nikko Securities, speaking on CNBC’s “Squawk Box,” said after the report’s release. “There’s no reason to cut rates right now. They should pause.”
    LaVorgna, who served as a senior economist during Donald Trump’s first presidential term and could serve in the White House again, wasn’t alone in his skepticism about a Fed cut.
    Chris Rupkey, senior economist at FWDBONDS, wrote that the Fed “does not need to be tinkering with measures to boost the economy as jobs are plentiful,” adding that the central bank’s stated intention to keep reducing rates looks “to be increasingly unwise as the inflation fire has not been put out.”
    Appearing along with LaVorgna on CNBC, Jason Furman, himself a former White House economist under Barack Obama, also expressed caution, particularly on inflation. Furman noted that the recent pace of average hourly earnings increases is more consistent with an inflation rate of 3.5%, not the 2% the Fed prefers.

    “This is another data point in the no-landing scenario,” Furman said of the jobs report, using a term that refers to an economy in which growth continues but also sparks more inflation.
    “I’ve no doubt the Fed will cut again, but when they cut again after December is anyone’s guess, and I think it will take more of an increase in unemployment,” he added.

    Factors in the decision

    In the interim, policymakers will have a mountain of information to plow through.
    To start: November’s payrolls data showed an increase of 227,000, slightly better than expected and a big step up from October’s paltry 36,000. Adding the two month’s together — October was hampered by Hurricane Milton and the Boeing strike — nets an average of 131,500, or slightly below the trend since the labor market first started to wobble in April.
    But even with the unemployment rate ticking up 4.2% amid a pullback in household employment, the jobs picture still looks solid if not spectacular. Payrolls still have not decreased in a single month since December 2020.
    There are other factors, though.
    Inflation has started ticking up lately, with the Fed’s preferred measure moving up to 2.3% in October, or 2.8% when excluding food and energy prices. Wage gains also continue to be robust, with the current 4% easily surpassing the pre-Covid period going back to at least 2008. Then there’s the issue of Trump’s fiscal policy when he begins his second term and whether his plans to issue punitive tariffs will stoke inflation even further.
    In the meantime, the broader economy has been growing strongly. The fourth quarter is on track to post a 3.3% annualized growth rate for gross domestic product, according to the Atlanta Fed.
    There’s also the issue of “financial conditions,” a metric that includes such things as Treasury and corporate bond yields, stock market prices, mortgage rates and the like. Fed officials believe the current range in their overnight borrowing rate of 4.5%-4.75% is “restrictive.” However, by the Fed’s own measure, financial conditions are at their loosest since January.
    Earlier this week, Fed Chair Jerome Powell praised the U.S. economy, calling it the envy of the developed world and said it provided cushion for policymakers to move slowly as they recalibrate policy.
    In remarks Friday, Cleveland Fed President Beth Hammack noted the strong growth and said she needed more evidence that inflation is moving convincingly toward the Fed’s 2% goal. Hammack advocated for the Fed to slow down its pace of rate cuts. If it follows through on the December reduction, that will equate to a full percentage point move lower since September.

    Looking for neutral

    “To balance the need to maintain a modestly restrictive stance for monetary policy with the possibility that policy may not be far from neutral, I believe we are at or near the point where it makes sense to slow the pace of rate reductions,” said Hammack, a voting member this year on the Federal Open Market Committee.
    The only thing left on the docket that could dissuade the Fed from a December cut is the release next week of separate reports on consumer and producer prices. The consumer price index is projected to show a 2.7% gain. Fed officials enter their quiet period after Friday when they do not deliver policy addresses before the meeting.
    The issue of the “neutral” rate that neither restricts nor boosts growth is central to how the Fed will conduct policy. Recent indications are that the level may be higher than it has been in previous economic climates.
    What the Fed could do is enact the December cut, skip January, as traders are anticipating, and maybe cut once more in early 2025 before taking a break, said Tom Porcelli, chief U.S. economist at PFIM Fixed Income.
    “I don’t think there’s anything in today’s data that would actually stop them from cutting in December,” Porcelli said. “When they lifted rates as much as they did, it was for a completely different inflation regime than we have right now. So in that context, I think Powell would like to continue the process of normalizing policy.”
    Powell and his fellow policymakers say they are now casting equal attention on controlling inflation and supporting the labor market, whereas previously the focus was much more on prices.
    “If you want until you see cracks from a labor market perspective and then you start to adjust policy down, it’s too late,” Porcelli said. “So prudence would really suggest that you start that process now.” More

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    Fannie and Freddie, the Big Mortgage Backers, Face Climate Risks

    Fannie Mae and Freddie Mac know increasing floods and wildfires are a problem. Dealing with them, however, would require trade-offs.As sea levels rise and natural disasters become more intense, homes in low-lying coastal areas or tinder-dry mountains are starting to lose value.That’s a problem for the finances of Fannie Mae and Freddie Mac, the government-sponsored enterprises that back half of the nation’s outstanding mortgages — and keep the residential real estate market liquid by buying mortgages from banks and repackaging them into securities.In the first year of the Biden administration, financial regulators seemed to recognize the risk, identifying the mortgage market as one of the main channels through which climate change could destabilize the financial system.Since then, reports have been published, comments gathered and summits held. But when it comes to insulating the two enterprises and borrowers from climate-related catastrophe, the Federal Housing Finance Agency — which regulates Fannie and Freddie — has issued only vague guidance.“It came out and I thought, where’s the rest of it?” said Carlos Martín, director of the Remodeling Futures Program at the Harvard Joint Center for Housing Studies.The issue comes with risk for taxpayers as well, since the federal government took Fannie and Freddie into conservatorship in 2008 after the financial crisis. Fannie and Freddie have reserve capital buffers, but large losses could force the government to intervene.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Walter Mosley’s Fictional Hero Teaches Us About Race and Real Estate

    About a third of the way through “Farewell, Amethystine,” the latest novel in the author Walter Mosley’s series about a private investigator named Ezekiel (Easy) Rawlins, Easy sets out for a late-night meeting with a gun and a hunch.The book is on a narrative precipice in which our gumshoe has knocked on enough doors and been told enough lies that both he and the reader understand that the simple missing-person case presented in Chapter 2 is about to become violent.But before it goes down, Easy pauses the action to make a weird declaration: He doesn’t need this job. He makes more than enough money renting real estate.Easy is a Black World War II veteran who fled the Jim Crow South for a better life in Los Angeles. In “Devil in a Blue Dress,” the 1990 classic that started both the series and Mosley’s career, Easy takes his first case so he can pay his mortgage and uses a windfall to add a rental property. The ups and downs of real estate continue as a recurring theme and story engine, especially in the early books, where the remedy for some tax lien or underwater mortgage is often to solve whatever mystery is driving the plot.Now, two decades of buying and holding later, Easy is flush. As he explains in “Farewell, Amethystine,” his 12 buildings have a total of 101 rental units that a friend manages for a 0.8 percent fee. Subtract that commission along with mortgage payments and general upkeep, and his take-home is $26,000 a year in 1970 (the year the novel takes place), which, adjusted for inflation, would be about $217,000 today.“I wasn’t rich,” Easy says. “But I sure didn’t need to be going out among the hammerhands and scalawags in the middle of the night.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Unemployment rate jumps more than a percentage point for Black women in November

    While the overall jobless rate inched higher to 4.2%, the figure jumped sharply among Black women and rose to 6% in November.
    Though the data reflects a labor market that is still strong and gradually cooling, signs are showing that marginalized workers are not benefiting as much, according to the Washington Center for Equitable Growth’s Kevin Rinz.
    The overall labor force participation rate edged lower to 62.5%.

    Job seekers talk to a recruiter at the Albany Job Fair in Latham, New York, on Oct. 2, 2024.
    Angus Mordant | Bloomberg | Getty Images

    The unemployment rate climbed sharply for Black women in November.
    The overall jobless rate edged up slightly last month to 4.2% from 4.1% in October, according to the U.S. Bureau of Labor Statistics on Friday. But some groups experienced more significant rises in unemployment relative to others.

    Black women experienced the most significant increase, with the jobless rate surging to 6% from 4.9%. In comparison, the jobless rate for white women ticked up slightly to 3.4%, compared to 3.3% in October.

    “The increase for Black women has been more pronounced than for white women,” said Kevin Rinz, senior fellow and research advisor at the Washington Center for Equitable Growth.
    Black workers as a group also saw the highest unemployment rate last month, which jumped to 6.4% from 5.7%. For Black men, the jobless rate hit 6%, but it held steady at 3.5% for white men.

    “This a broader picture of a gradually cooling labor market that is still relatively strong by recent historical standards, but less able to deliver the gains for more marginalized workers that we saw immediately after the pandemic,” Rinz added, while highlighting the volatility in month-to-month data.
    The overall labor force participation rate — a measure of the population employed or seeking work — edged lower to 62.5%. For Black women, the figure slipped to 62.3% in November, compared with 62.6% in the prior month. The rate dipped to 68.7% last month, down from 69.3% among Black men.
    Other demographic groups that also experienced a rise in unemployment last month include Hispanic men. The unemployment rate climbed to 4.4% in November, up from 4% in October.

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    November Jobs Report Shows Gain of 227,000; Unemployment Rises

    Hiring bounced back after disruptions from storms and a major strike.Job creation bounced back in November after disruptions from storms and a major strike, reinforcing a picture of modest employment expansion over the past several months.The U.S. economy added 227,000 jobs, seasonally adjusted, the Labor Department reported on Friday. With upward revisions to September and October figures, the three-month average gain is 173,000, slightly higher than the average over the six months before that.The unemployment rate ticked up to 4.2 percent, from 4.1 percent in October, as fewer people were able to find work. But for those who had jobs, wages jumped more than expected and were 4 percent higher than they were a year earlier.Unemployment rate More

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    Here’s where the jobs are for November 2024 — in one chart

    Jobs rebounded in November, with nonfarm payrolls increasing more than expected.
    Employment growth came from many different areas of the economy, with health care and social assistance leading the way.
    The gains come after October’s employment performance across industries showed a mixed bag for the U.S. economy.

    Getty Images

    The jobs report for November came in better than expected, and that growth came from several different areas of the U.S. economy, according to the data.
    Health care and social assistance led the way yet again last month, seeing 72,300 new positions added in that area, per the Bureau of Labor Statistics. This comes after the group had the biggest contribution in October.

    When including private education with the health-care category, as some economists do, the group’s growth would have increased even more to 79,000.

    Leisure and hospitality had the second-biggest contribution last month, with 53,000 positions added. That also marks significant growth compared to its performance in October. The November gains were supported by employment in food services and drinking places, which trended up by 29,000.
    Meanwhile, government, a category that had the second-biggest contribution two months ago, came in just behind leisure and hospitality last month. In November, the group grew by 33,000 jobs.
    More notably, there was a stark rebound in manufacturing and professional and business services, two areas that suffered major losses in October as a result of the seven-week Boeing machinist strike and the effects of Hurricanes Helene and Milton. Last month, those categories saw gains of 22,000 jobs and 26,000 jobs, respectively.
    “After a prior month of hurricanes and worker strikes, we did get a bounce back in the headline payroll numbers plus positive revisions,” Byron Anderson, head of fixed income at Laffer Tengler Investments, said in a statement. “Jobs creation may not be as robust as in the past years, but we are not seeing a disaster in the job market.”

    While there were some gains in other areas as well such as construction, Julia Pollak of ZipRecruiter noted that the gains are “very narrowly” concentrated and told CNBC that the growth in manufacturing is actually smaller than she expected to see.
    Retail trade, which lost 28,000 jobs, was also a key weak spot of the report. Unless there is a turnaround in other sectors soon, Pollak believes the pace of overall job growth will “slow further.”
    “Some people are calling this a bounceback, [but] I think one should not be misled by the seemingly healthy payroll gain,” the firm’s chief economist said in an interview. “We always knew going in that this report would overstate the underlying strength of the labor market [and] be inflated by the return of workers following strikes and storms.”
    On the other hand, Pollak pointed to financial activities as one bright spot. That group experienced a gain of 17,000 jobs in November.
    “Banks are getting … sort of bullish and excited about a Trump administration, which is seen as likely to relax financial regulations and take a more favorable approach towards mergers and acquisitions,” she added. “So, that is definitely one sector where we’re seeing more optimism and a bit more hiring in some places.”

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    Payrolls increased 227,000 in November, more than expected; unemployment rate at 4.2%

    Nonfarm payrolls rose by 227,000 for the month, compared with an upwardly revised 36,000 in October and the Dow Jones consensus estimate for 214,000.
    The unemployment rate edged higher to 4.2%, as expected.
    Traders accelerated their bets on an interest rate cut this month following the payrolls release.
    Job gains were focused in health care (54,000), leisure and hospitality (53,000), and government (33,000).

    Job creation in November rebounded from a near-standstill the prior month as the effects of a significant labor strike and violent storms in the Southeast receded, the Bureau of Labor Statistics reported Friday.
    Nonfarm payrolls increased by 227,000 for the month, compared with an upwardly revised 36,000 in October and the Dow Jones consensus estimate for 214,000. September’s payroll count also was revised upward, to 255,000, up 32,000 from the prior estimate. October’s number was held back by impacts from Hurricane Milton and the Boeing strike.

    The unemployment rate edged higher to 4.2%, as expected. The jobless figure rose as the labor force participation rate nudged lower and the labor force itself declined. A broader measure that includes discouraged workers and those holding part-time jobs for economic reasons moved slightly higher to 7.8%.
    The data likely gives the Federal Reserve a green light to lower interest rates later this month.
    “The economy continues to produce a healthy amount of job and income gains, but a further increase in the unemployment rate tempers some of the shine in the labor market and gives the Fed what it needs to cut rates in December,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.
    Job gains were focused in health care (54,000), leisure and hospitality (53,000), and government (33,000), sectors that have consistently led payroll growth for the past few years. Social assistance added 19,000 to the total.

    At the same time, retail trade saw a decline of 28,000 heading into the holiday season. With Thanksgiving coming later than usual this year, some stores may have held off hiring.

    Worker pay continued to rise, with average hourly earnings up 0.4% from a month ago and 4% on a 12-month basis. Both numbers were 0.1 percentage point above expectations.

    Stock market futures edged higher after the report while Treasury yields were lower.
    The report comes with questions over the state of the labor market and how that will impact Federal Reserve decisions on interest rates.
    Traders accelerated their bets on a rate cut following the payrolls release, with market-implied odds rising above 88% for a quarter percentage point reduction. when central bank policymakers make their next decision on Dec. 18.
    “Data this morning was a Thanksgiving buffet with payrolls spot on, revisions positive, but unemployment ticking higher despite the participation rate falling,” said Lindsay Rosner, head of multi-service investing at Goldman Sachs Asset Management. “This print doesn’t kill the holiday spirit and the Fed remains on track to deliver a cut in December.”
    Earlier this week, Fed Chair Jerome Powell said the generally strong state of the economy affords him and his colleagues the ability to be patient when making interest rate decisions. Other officials have said they see additional interest rate cuts as being likely but subject to changes in the economic data.
    While inflation is well off the boil from its 40-year high in mid-2022, recent months have shown prices drifting up. At the same time, the October jobs report and various other reports have pointed to a labor market that is still growing but slowing.
    The survey of households, which is used to calculate the unemployment rate, painted a different picture as the establishment survey that provides the headline payrolls count.
    According to the BLS, household employment fell by 355,000 on the month even as the labor force contracted by 193,000. The labor force participation rate, which measures the share of the working-age population either at work or looking for a job, declined to 62.5%, a decrease of 0.1 percentage point.
    Full-time job holders decreased by 111,000 while part-time workers were off by 268,000.
    The unemployment rate for Black workers jumped to 6.4%, an increase of 0.7 percentage point.

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