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    Private job creation totaled a stunning 233,000 in October, far more than expected, ADP says

    ADP said private companies hired 233,000 new workers in the month, better than the upwardly revised 159,000 in September and far ahead of the Dow Jones estimate for 113,000.
    It was the best month for job creation since July 2023.
    The numbers counter expectations for a slowdown in October on the heels of two brutal hurricanes and strikes at Boeing and ports on the Eastern seaboard.

    Private-job creation burst to its highest level in more than a year during October, despite a devastating storm season in the Southeast and major labor disruptions, ADP reported Wednesday.
    The payrolls processing firm said companies hired 233,000 new workers in the month, better than the upwardly revised 159,000 in September and far ahead of the Dow Jones estimate for 113,000. ADP said it was the best month for job creation since July 2023.

    “Even amid hurricane recovery, job growth was strong in October,” ADP chief economist Nela Richardson said. “As we round out the year, hiring in the U.S. is proving to be robust and broadly resilient.”
    The numbers counter expectations for a slowdown in October on the heels of two brutal hurricanes — Helene and Milton — that ravaged the Southeast, with Florida and North Carolina getting slammed in particular.
    On top of that, labor disruptions with port workers and Boeing were expecting to hit payrolls as well, with some economists suggesting that October would be an outlier report that Federal Reserve officials would largely dismiss when meeting next week.
    However, the ADP report indicates that the labor market has held up. In addition to hiring rising, wages grew 4.6% from a year ago.
    Moreover, gains were widespread. Leading sectors included education and health services (53,000), trade, transportation and utilities (51,000), construction and leisure and hospitality, which added 37,000 apiece, and professional and business services, which contributed 31,000.

    Manufacturing was the only sector to report losses, down 19,000 on the month, as the Boeing strike since Sept. 13 has sidelined 33,000 of the company’s workers.
    Job creation was strongly concentrated in companies with 500 or more employees, which added 140,000 of the total. Businesses with fewer than 50 workers were little changed, contributing just 4,000 of the total.
    The ADP report traditionally tees up the more closely watched nonfarm payrolls count from the Bureau of Labor Services. That report, which comes Friday, is projected to show growth of just 100,000 and an unemployment rate holding steady at 4.1%.
    However, the ADP and BLS reports can differ substantially, with the latter including government workers. The BLS report showed private job gains of 223,000 in September and 254,000 total payrolls growth. More

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    U.S. Economy Grew at 2.8% Rate in Third Quarter

    In a key economic report released just days before the presidential election, growth was again driven by robust consumer spending.Consumers are spending. Inflation is cooling. And the U.S. economy looks as strong as ever.Gross domestic product, adjusted for inflation, expanded at a 2.8 percent annual rate in the third quarter, the Commerce Department said on Wednesday. That came close to the 3 percent growth rate in the second quarter and was the latest indication that the surprisingly resilient recovery from the pandemic recession remained on solid footing.“The economy right now is firing on nearly all cylinders,” said Joe Brusuelas, chief economist at the accounting and consulting firm RSM.The report was the first of three crucial indicators on the nation’s economy scheduled for release this week, just days before the presidential election and the next policymaking meeting of the Federal Reserve.The strength in the third quarter was again driven by robust consumer spending, which grew at a 3.7 percent rate, adjusted for inflation. Rising wages and low unemployment meant that Americans continued to earn more, while inflation continued to ease: Consumer prices rose at a 1.5 percent annual rate in the third quarter and were up 2.3 percent from a year earlier.As recently as a few weeks ago, many economists were concerned that spending was about to slow as the job market weakened and household savings dwindled. But revised data released last month showed that incomes and savings were stronger than initially reported, and recent data on the job market has been strong. That suggests that spending could continue to grow — especially because data released by the Conference Board this week showed that consumers were at last feeling more confident in the economy.“Most consumers continue to be working,” said Dana Peterson, chief economist for the Conference Board. “If you’re a consumer and you’re working, then you’re going to spend.”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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    Euro zone growth hits two-year high of 0.4%, beating expectations

    The euro area economy grew 0.4% in the third quarter, ahead of expectations for a 0.2% expansion.
    Spain and Ireland recorded the strongest growth rates, while Europe’s largest economy, Germany, avoided a recession.
    The readings come with the European Central Bank expected to cut interest rates four times this year.

    People walk down the iconic Alcalá street on a very hot afternoon in Madrid, Spain.
    Miguel Pereira | Getty Images News | Getty Images

    The euro zone economy grew 0.4% in the third quarter, flash figures published by the European Union’s statistics agency showed Wednesday.
    Economists polled by Reuters had expected growth of 0.2%. following the bloc’s 0.3% expansion in the second quarter.

    Spain saw one of the highest growth rates, increasing 0.8% on the previous quarter, as Ireland — which generally records volatile figures due to the high proportion of international corporations stationed there — rose 2%.

    The euro zone’s biggest economy, Germany, recorded a surprise growth of 0.2% in the third quarter. That allowed Europe’s largest economy to avoid the recession that had been forecast by some economists, as it struggles with a downturn in its key manufacturing sector.
    “Although a technical recession was avoided, the German economy remains barely larger than it was at the start of the pandemic,” analysts at ING said in a Wednesday note, calling the nation a “magnet for negative macro news.”
    Analysts say euro zone business activity and consumer confidence should cautiously pick up in the coming months, amid lower interest rates and cooling inflation.
    The European Central Bank cut rates for the third time this year at its October meeting, after headline inflation came in at 1.7% in September, according to a final reading. The ECB cited persistent signs of weak activity in the euro area as a key factor in the central bank’s decision to enact an October cut.

    Markets have fully priced another 25-basis-point cut from the ECB in its last meeting of the year in December. The ECB’s key rate, the deposit facility, is currently at 3.25%.

    ECB President Christine Lagarde said during her October press conference that the central bank’s Governing Council had only debated a 25-basis-point cut.
    Nonetheless, the possibility that the central bank could opt for a larger half-percentage-point reduction — as the U.S. Federal Reserve did in September — has been increasingly discussed over the last month. That has come as some ECB policymakers have acknowledged they may soon have to grapple with the ECB’s pre-Covid-19 issue of inflation that is persistently below the institution’s 2% target.
    Franziska Palmas, senior Europe economist at Capital Economics, said stronger-than-expected growth would not deter the ECB from a December rate cut and forecast a reduction of 50 basis points.
    Palmas said euro zone GDP growth would slow in the fourth quarter, with Germany still underperforming in manufacturing and with Italy struggling with the end of construction industry tax incentives, while inflation would undershoot the ECB’s forecasts for the three-month period.
    However, Kamil Kovar, senior economist at Moody’s Analytics, said the latest GDP figures would be followed by an uptick in headline inflation which would “shut down any talk about a jumbo sized cut.”
    Euro zone inflation figures for October are due on Thursday.
    “The report puts to rest any questions of whether the euro zone is currently in recession — it is not, and such worries were always overblown,” Kovar said, calling growth “splendid in Spain and solid in France,” due in part to the summer Olympics. More

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    Vista’s Robert Smith: How to prevent AI from further widening the racial wealth gap

    Human resources and technology concept for AI augmenting team work.
    Leowolfert | Istock | Getty Images

    The rise of artificial intelligence (AI) has been stunning in both its speed and impact. According to data from Goldman Sachs, investment in AI is expected to reach $100 billion in the U.S. and $200 billion globally by next year. Last year, in private equity alone, generative AI (GenAI) investments reached $2.18 billion – double from the year before.
    Yet, while we often hear about the boundless promise of AI – as we should – we also need to pay more attention to the careers, lives and communities it will disrupt, including those who have so far been left out. For example, according to a recent McKinsey study, Black Americans are 10% more likely to be working jobs slated for AI automation. In addition, the same study anticipates that AI will disrupt 4.5 million jobs for Black workers. This disruption has the potential to impact billions of dollars in Black economic potential and growth. If current trends hold, the new wealth created by GenAI alone will increase the racial wealth gap by $43 billion annually, according to McKinsey.

    We have already seen firsthand how the rapid adoption of technology can exacerbate gaps and create new divides. One only needs to look at the creation and adoption of computers and the internet. In 1987, economist Robert Solow famously claimed that “you can see the computer age everywhere but in the productivity statistics.” Today, we almost take for granted how much productivity the digital age has brought. But, that digital age has also created a digital divide, which exacerbates racial economic gaps. And, one of the legacies of failing to address this digital divide and ensure broadband access to Black and other communities without access to resources and opportunities has been limited engagement with these tools.

    How to prevent another wealth gap

    As we stand at the beginning of this next revolution in AI and its early waves of value creation, our urgent task is to prevent another gap. We can do that by empowering all people to take part and be leaders in this evolving field, allowing our economy to reap greater benefits. That begins with infrastructure that supports AI enablement for all, including education on AI tools, access to the internet and power to compute.
    One model for this is the work being done by Student Freedom Initiative (SFI). As a first step, we must commit to eliminating the existing digital broadband divide. SFI has been working hard to close the digital divide in Black communities, including Historically Black Colleges and Universities (HBCUs), 82% of which reside in broadband deserts. This is a critical gap that must be closed to provide the next generation of diverse leaders with the resources, education and technical access needed to master this evolving tech.
    We must also double our efforts to provide education around these tools. A combination of critical thinking and technical skills is increasingly becoming a prerequisite for effectively interacting with GenAI. Our education system, particularly secondary and higher education institutions, must play a key role in equipping students with these essential skills.
    In partnership with Stats Perform, a global leader in AI solutions for the sports industry and a portfolio company of my global investment firm, Vista Equity Partners, SFI launched an “AI in Basketball” course at Morehouse College last year. This course provided hands-on instruction in AI-use cases, which helped prepare those students to be leaders in this field. It also offered students internship opportunities to use what they learned in a real-world setting, allowing them to build experience and competitive resumes for AI careers. Soon, we will be expanding these courses to other HBCUs, creating on-ramps to this growing industry. 

    Another notable example of this is the work being done at internXL, which offers opportunities like free training and certifications in artificial intelligence, data science, and machine learning, including access to over 500 AI training courses. The internXL initiative also connects highly-qualified HBCU students with AI experts and employers for internships, enabling them to gain practical experience in the field. And internships are critical – studies show that an internship at a hiring organization, or in the same field, are among the highest differentiators used in choosing between qualified candidates. This work is bridging access gaps and ensuring that underrepresented talent thrives in the rapidly growing and in-demand field of AI.
    Finally, we must also ensure widespread access to compute, or processing power, to run these new tools and their applications. If we use the example of smartphones, compute was made possible thanks to telecommunication organizations updating their infrastructure to handle 4G, 5G and LTE – all of which have been underinvested in across Black communities. If we want to fully harness the potential impact of AI on our economy, all communities need to have access to these tools and the infrastructure that underpins the technology. This includes computing power, requisite energy sources, and large language models and other machine learning and reasoning tools.

    Economic toll

    We know that the racial wealth gap will cost the U.S. economy $1 trillion to $1.5 trillion between 2019 and 2028. Imagine what it would mean for the economy if we took steps to prevent AI from becoming a new economic wedge, and it, instead, became a prolific source of generational wealth. What if we were able to ensure access to these tools for communities around the globe? So long as we take appropriate steps to prevent these tools from mimicking and reinforcing racial biases, the innovation and economic growth this would spur has the potential to close many gaps, generating prosperity for all.
    With AI’s current trajectory, there will be three distinct waves of opportunity through which value will be captured. We are already seeing the first wave of value creation benefiting hardware vendors. The second wave will go to super scalers like Microsoft, Google, Oracle and other large companies that have the ability to broadly offer connectivity to compute. The third wave will benefit enterprise software vendors who provide AI and GenAI solution sets on top of their existing products. These are three distinct verticals where we must focus our equity efforts to impact the long-term growth of AI and GenAI.
    The good news is that, unlike the digital revolution, we have the luxury of foresight. As AI evolves and established companies and new start-ups scale products, develop features and capture value at each stage, we must commit ourselves to ensuring that everyone has access to the incredible benefits of AI. If we fall short, we will not be equipped, nor able, to fully harness and unlock its potential. As we stand at these crossroads, we must think expansively and act decisively to ensure we build the infrastructure to support AI and GenAI enablement.
    Robert F. Smith is the founder, chairman and CEO of Vista Equity Partners. He serves as chairman of Student Freedom Initiative (SFI) and Carnegie Hall, founding director and president of the Fund II Foundation and co-lead of Southern Communities Initiative (SCI). In 2019, Smith eliminated the student debt of approximately 400 Morehouse College graduates and was named one of TIME 100’s Most Influential People in 2020. More

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    Consumer confidence surges as election nears, while job openings move lower

    The Conference Board’s consumer confidence index for October rose more than 11% to a reading of 138, its biggest single-month acceleration since March 2021.
    Job openings slid to 7.44 million in September, down more than 400,000 from the previous month’s downwardly revised level and the lowest since January 2021.

    Consumers grew more optimistic about the U.S. economy heading into the contentious presidential election even as job openings hit multi-year lows, according to separate reports released Tuesday.
    The Conference Board’s consumer confidence index for October rose more than 11% to a reading of 138, its biggest one-month acceleration since March 2021. Along with that, the board’s expectations index of future conditions jumped nearly 8%, to a reading of 89.1 that is well clear of the sub-80 level that indicates a recession.

    Economists surveyed by Dow Jones had been looking for a headline number of 99.5.
    “Consumers’ assessments of current business conditions turned positive,” said Dana Peterson, the board’s chief economist. “Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data.”
    That sentiment was seemingly at odds with a Bureau of Labor Statistics report showing that job openings slid to 7.44 million in September, off more than 400,000 from the previous month’s downwardly revised level and the lowest since January 2021. That number was also below a Wall Street forecast of 8.0 million.
    The drop in openings took the ratio of job vacancies to available workers below 1.1 to 1. In mid-2022, the number was greater than 2 to 1.
    Though the openings level moved lower, hires rose 123,000 on the month. Separations were little changed, while quits fell by 107,000.

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    G.M.’s Electric Vehicle Sales Surge as Ford Loses Billions

    Ford is struggling to make money on battery-powered models while General Motors, which started more slowly, says it is getting close to that goal.In the race to be second to Tesla in the U.S. electric vehicle market, Ford Motor leaped to an early lead four years ago over its crosstown rival, General Motors, with the Mustang Mach E, an electric sport utility vehicle with a design and a name that nodded to its classic sports car.But the contest looks much different today.Sales of G.M.’s battery-powered models are starting to surge as the company begins to reap its big investments in standardized batteries and new factories. Ford’s three electric models, including the F-150 Lightning pickup truck and a Transit van, are still selling well but are racking up billions of dollars of losses.The latest view into how Ford’s quick-start strategy has run into trouble came on Monday, when the company reported that its electric vehicle division lost $1.2 billion before interest and taxes from July to September. In the first nine months of the year, it lost $3.7 billion.Ford’s chief financial officer, John Lawler, said it was a “solid quarter,” noting that revenue had risen for the 10th quarter in a row, by 5 percent to $46.2 billion. But the company’s overall profit of $896 million in the third quarter was down 24 percent from a year earlier, largely because of problems with electric vehicles, warranty costs and other factors.“Our strategic advantages are not falling to the bottom line the way they should because of cost,” Mr. Lawler said.Ford made an early entry into the electric vehicle market compared to other established automakers with the Mustang Mach E.David Zalubowski/Associated PressWe 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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    How Elon Musk Might Use His Pull With Trump to Help Tesla

    Although Donald Trump has opposed policies that favor electric cars, if he becomes president he could ease regulatory scrutiny of Tesla or protect lucrative credits and subsidies.Former President Donald J. Trump has promised, if he is re-elected, to do away with Biden administration policies that encourage the use and production of electric cars. Yet one of his biggest supporters is Elon Musk, the chief executive of Tesla, which makes nearly half the electric vehicles sold in the United States.Whether or not Mr. Trump would carry out his threats against battery-powered cars and trucks, a second Trump administration could still be good for Tesla and Mr. Musk, auto and political experts say.Mr. Musk has spent more than $75 million to support the Trump campaign and is running a get-out-the-vote effort on the former president’s behalf in Pennsylvania. That will almost surely earn Mr. Musk the kind of access he would need to promote Tesla.But Mr. Musk would also have to confront a big gap between his Washington wish list and Mr. Trump’s agenda.While Mr. Musk rarely acknowledges it, Tesla has collected billions of dollars from programs championed by Democrats like President Biden that Mr. Trump and other Republicans have vowed to dismantle.In Michigan, a battleground state and home to many auto factories, the Trump campaign has run ads that claim that Vice President Kamala Harris, the Democratic presidential nominee, wants to “end all gas-powered cars” — a position that she does not hold.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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    Have Paychecks Kept Up With the Cost of Living?

    On average, pay has risen faster than prices in recent years. But the overall picture is complicated — and it’s not just facts versus “vibes.”Have Americans’ paychecks kept up with the cost of living over the past several years?It is a surprisingly difficult question to answer.According to most Americans, the answer is a clear “no.” In polls and interviews ahead of the presidential election, people of virtually all ideologies and income levels say inflation has made it harder to make ends meet, eclipsing whatever raises they have managed to win from their employers.According to economic data, the answer appears, at least on the surface, to be “yes.” Income and earnings have outpaced inflation since the start of the pandemic, according to a variety of both government and private-sector sources. That is especially true for the lowest earners — a partial reversal of the rising inequality of recent decades.But this is not a simple case of facts versus “vibes.” Economic statistics are based on broad averages. Dig deeper, and the story becomes more complicated. How a given family or individual has fared over the past five years depends on a litany of factors: whether the earners own their home or rent; whether they had to buy a car or send a child to day care; whether they were able to change jobs or demand a raise.“I feel like some people are being very dismissive, saying, ‘Oh, people are wrong — there has been all this real wage growth,’ but that is a simple average,” said Stefanie Stantcheva, a Harvard economist who has studied how people experience inflation. “It’s actually very, very hard to say people are wrong — I would almost never say that.”The bottom line: Most American workers are probably making more money today, adjusted for inflation, than they were in 2019. But not all have seen their pay keep up with their own cost of living, and many — perhaps most — are lagging behind where they would be if prepandemic trends had continued unabated. Those complications may help explain why so many Americans believe they have fallen behind.

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    Change since end of 2019 in various earnings measures
    Notes: After-tax income is per capita and excludes government transfer payments and is adjusted for inflation by the Personal Consumption Expenditures Price Index. Hourly earnings are for production and nonsupervisory workers and are adjusted for inflation by the CPI-W. Median weekly earnings are for full-time workers and are adjusted for inflation using the CPI-U. Average weekly earnings are for all workers and are also adjusted using the CPI-U. All series are monthly except for median weekly earnings, which are quarterly.Sources: Bureau of Labor Statistics, Bureau of Economic Analysis, Federal Reserve Bank of New YorkBy The New York Times

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    Change in inflation-adjusted weekly earnings by wage level, 2019-2024
    Note: Change is measured in the third quarter of each year, not seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York Times

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    Median weekly earnings vs. prepandemic trend
    Notes: Earnings are shown in 2023 dollars and are for full-time workers. Data is seasonally adjusted. Trend line is based on 2014 to 2019 data.Source: Bureau of Labor StatisticsBy The New York TimesWe 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