Economy

Tech layoffs, fallout from Hollywood strikes and an uptick in rural joblessness challenge a state with one of the nation’s highest unemployment rates.For decades, California’s behemoth economy has outpaced those of most nations, holding an outsize role in shaping global trends in tech, entertainment and agriculture.While that reputation remains, the state has a less enviable distinction: one of the nation’s highest unemployment rates.Nationwide, the rate is 3.7 percent, and in January, the country added 353,000 jobs. California’s job growth has been slower than the nationwide average over the last year, and the unemployment rate remains stubbornly high — 5.1 percent in the latest data, a percentage point higher than a year earlier and outpaced only by Nevada’s 5.4 percent.With layoffs in the tech-centered Bay Area, a slow rebound in Southern California from prolonged strikes in the entertainment industry and varying demand for agricultural workers, California is facing economic headwinds in the new year. And residents feel it.The state has historically had higher unemployment than the U.S. average because of a work force that is younger and fast growing, said Sarah Bohn, a senior fellow at the Public Policy Institute of California. Still, she noted, the labor force shrank in California in the past six months — a troubling trend.“When looking at this shrinking, are there less opportunities and people have just stopped looking for work?” Ms. Bohn asked. “What will this mean for consumers and businesses?”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

This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesFirebrand left-wing politician George Galloway has won the Rochdale by-election, claiming in his victory speech that he’ll be Starmer’s “worst nightmare”.Global carbon dioxide emissions from energy surged to a record high in 2023, hitting 37.4bn tonnes, according to the International Energy Agency.Germany and France called for an international investigation into the deaths of dozens of Gazans seeking humanitarian aid after Israeli troops opened fire close to an aid convoy.For up-to-the-minute news updates, visit our live blogGood evening.Inflation in the United States and the 20-country eurozone is easing, fuelling speculation that central banks may cut interest rates later this year after record-high rates since the Covid-19 pandemic and Russia’s full-scale invasion of Ukraine in February 2022. US inflation eased to 2.4 per cent in the year to January, according to data published yesterday on personal consumption expenditures, slipping from December’s rate of 2.6 per cent. The core rate for PCE, which excludes changes in food and energy prices and is the Fed’s preferred measure of underlying inflation, was also in line with expectations at 2.8 per cent.In the eurozone, inflation eased to 2.6 per cent in February. The figure was higher than the 2.5 per cent expected by economists as the cost of living for consumers continued to rise at persistently strong rates.In the US, rate setters remain cautious. The Federal Reserve is unwilling to lower borrowing costs from current levels of 5.25 per cent to 5.5 per cent until it is confident price pressures have sustainably returned to its 2 per cent target.Meanwhile, the European Central Bank is set to meet next week to discuss the future direction of interest rates amid signs the economy remains mired in stagnation. “The ECB is concerned about persistence in domestically generated inflation,” said Tomasz Wieladek, an economist at investor T Rowe Price, adding that services inflation was “clearly too strong”.Senior ECB policymakers have played down the likelihood of an imminent rate cut while they assess if wage pressures are moderating enough to push inflation towards its 2 per cent target.The inflation data lifted investor confidence in Europe, with the pan-European Stoxx 600 up 0.5 per cent and close to a record high. Shares in New York were higher in late-morning trading, with the S&P 500 up 0.2 per cent and the tech-heavy Nasdaq 0.4 per cent higher.Need to know: UK and Europe economyUK house prices rose more than expected in February, posting their first annual increase in more than a year, according to mortgage lender Nationwide.A total of 117 MPs across all major political parties have written to the chancellor Jeremy Hunt urging him to allocate funding to compensate victims of the infected blood scandal in his spring Budget next week.Thomas Jordan, the long-standing chair of the Swiss National Bank, has announced his resignation, bringing to an end a turbulent tenure of unorthodox policymaking. Jordan, who is the longest-serving governor of any major central bank, will step down in September. Tech mania has gripped Turkey’s stock market with equities gaining 20 per cent in dollar terms as runaway inflation sends local savers piling into shares.Need to know: global economyEconomic growth in Brazil stalled in the fourth quarter as consumer spending and agricultural production declined, signalling a slowdown in Latin America’s largest economy. Annual GDP growth was 2.1 per cent in the three months to December 31, down 0.1 percentage points from the previous quarter, the government statistics agency said earlier today.China’s manufacturing activity has slowed for the fifth consecutive month with the country’s manufacturing purchasing managers’ index slipping to 49.1 in February from 49.2 in January.The cobalt market has been overwhelmed by a record glut as Chinese companies boost their output, with the surplus of the key electric car battery metal set to last until 2028, according to an influential market report.A US-born former Hollywood financier Philip Adkins is supplying Russia’s liquefied natural gas station in the Arctic Circle. The project, which is heavily sanctioned by the US in an attempt to curb Moscow’s influence on global energy markets, could significantly increase Russia’s share in the global LNG market.Need to know: businessElon Musk has sued OpenAI and its chief executive Sam Altman for breach of contract, alleging they have compromised the start-up’s original mission of building artificial intelligence systems for the benefit of humanity.Figure AI aims to introduce artificial intelligence-powered humanoid robots to the workforce More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The UK goods trade has suffered its steepest five-year fall on record, highlighting how Brexit has reduced flows both into and out of Britain, say economists.The volume of UK goods imports and exports was 7.4 per cent smaller in 2023 than in 2018, the largest five-year decline in goods trade since comparable records began in 1997, according to FT calculations of data published by the Office for National Statistics on Friday. The ONS reported that the volume of imports fell 7.4 per cent compared with 2022 and was down 3.8 per cent compared with 2018. Meanwhile, exports fell 4.6 per cent year on year, with substantial drops in exports to both EU and non-EU countries. Over five years, export volumes fell 12.4 per cent.Emily Fry, economist at the Resolution Foundation think-tank, said after years of data being affected by the pandemic and the energy price shock, the 2023 figures were a real “big sign” of the impact of Brexit. “A clear implication of this [data] is that the new trade barriers that were put in place by Brexit are having an effect on trade,” she said. Economists point out that the performance of the UK goods trade has been worse than that of other advanced countries. “The UK’s weak trade performance is unusual among advanced economies,” said John Springford, deputy director of the Centre for European Reform think-tank. He added that most countries saw an increase in goods trade after the pandemic, but “the UK did not participate in the boom thanks to the trade barriers that it imposed upon itself”. “The obvious culprit is Brexit,” he said. In its latest economic and fiscal outlook, the Office for Budget Responsibility, the spending watchdog, noted in 2023, UK trade intensity — exports and imports as share of the economy — was 1.7 per cent below its 2019 level, driven by poor goods performance. This contrasted with an average increase of 1.9 per cent across other G7 economies. “This may suggest that Brexit frictions and post-pandemic disruptions have weighed more on trade in goods than on services,” the OBR concluded.Jonathan Portes, professor of economics and public policy at King’s College London, said that while UK goods exports have performed “poorly” over recent years compared to other economies, Britain’s services exports have “grown strongly”. But he added that it was “unclear how much of the underperformance in goods trade related to Brexit”. “Goods exports have been weak for both EU and non-EU countries — although Brexit is almost certainly partly responsible,” he said.Springford said the weakness of UK trade with both EU and non-EU countries may have been because Britain had missed out on the strong growth of intra-EU trade in recent years. “We can infer that the UK’s goods exports to the EU would have grown more than its exports to the rest of the world if Brexit hadn’t happened,” he said.Fry said it was “particularly concerning” to see exports of key high-value manufacturing sectors shrink after the ONS data showed the real value of chemical exports had dropped 15 per cent compared with 2018.The data “implies that those industries aren’t performing particularly well after Brexit and that could have kind of longer term implications for poor national productivity”, she added. More

The president and his team are seeking ways to help Americans afford to rent and buy homes, as high borrowing costs dampen views of the economy.President Biden and his economic team, concerned that elevated mortgage rates and housing costs are hurting Americans and hindering his re-election bid, are searching for new ways to make housing more available and affordable.Mr. Biden’s forthcoming budget request will call on Congress to pass a raft of initiatives to build more affordable housing and help certain Americans afford to purchase a home. The president is also expected to address housing affordability for both homeowners and renters in his State of the Union address next week, according to people familiar with the speech planning.On Thursday, administration officials announced a handful of relatively modest executive actions, including steps to increase the supply of manufactured homes. White House officials said this week that they would announce “additional actions we are taking to lower housing costs.”The increased focus on housing affordability comes as congressional Republicans assail Mr. Biden over high mortgage rates and housing costs, and as allies of the president warn that those costs are hurting working-class voters he needs to win in November.There is little Mr. Biden can do immediately and directly to affect mortgage rates. Those are heavily influenced by the Federal Reserve’s interest rate policies, and the White House is careful not to appear to be pressuring the central bank to cut rates. Fed officials have signaled that they expect to begin cutting rates this year.New research from economists at Harvard University and the International Monetary Fund — including Lawrence H. Summers, the former Treasury secretary — suggests high mortgage rates and other borrowing costs are contributing to Americans’ relatively gloomy mood about the economy, despite low unemployment and healthy growth. By weighing on consumer confidence, those costs could be depressing Mr. Biden’s re-election hopes.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

SAO PAULO (Reuters) -Brazil ended 2023 with economic growth of 2.9%, official data showed on Friday, way above what economists expected for most of last year but maintaining in the fourth quarter a slowing trend that should cripple its expansion in 2024.In a boost for President Luiz Inacio Lula da Silva in his first year in office, gross domestic product (GDP) in Latin America’s No.1 economy defied gloomy forecasts that in early 2023 pointed to a mere 0.8% calendar-year growth amid stiflingly high interest rates.Activity in the country got a boost from agriculture in early 2023, with booming exports of commodities like soybeans, while a resilient job market and the positive impact of welfare programs on consumption helped it for most of the year.Economists expect that to change in 2024 as Brazil faces a drop in agricultural output and borrowing costs remain high, with the central bank’s benchmark interest rate now at 11.25% even after a total 250 basis points of cuts since August.In the fourth quarter of 2023, according to statistics agency IBGE, Brazil’s GDP was flat, in line with the previous quarter but slightly missing the 0.1% growth expected by economists polled by Reuters.On an annual basis, growth in the October-December quarter came in at 2.1%, also below the 2.2% rise economists had expected.”The stagnation in Brazil’s GDP in the fourth quarter and the decline in household consumption confirmed that the economy lost momentum sharply,” Capital Economics’ chief emerging markets economist William Jackson said.”While we expect a pick-up in growth in the coming quarters, we’re now more confident in our below-consensus 2024 GDP growth forecast of 1.3%.”The Brazilian government, meanwhile, reaffirmed on Friday it expects 2024 growth of 2.2%, saying in a statement that the latest figures were “compatible” with its forecast of an increased activity expansion in the first quarter.Lula is even more optimistic and has been saying he is convinced the country will manage to post economic growth of at least 3% this year, once again overshooting market expectations that currently stand at around 1.75%.The fourth quarter results reflected a faster expansion in Brazil’s industrial sector, led by extractive segments like mining and oil, which offset a further deceleration of agricultural output. Services were up moderately. More

March futures on the S&P/TSX index were up 0.4% at 7:05 a.m. ET (12:05 GMT), while their Wall Street peers were subdued. [.N]Energy shares were poised to extend gains to a fifth session on a 1% rise in oil prices as markets awaited an OPEC+ decision on supply agreements for the second quarter. [O/R]Gold prices hit a one-month high after data suggested easing U.S. price pressures, while copper prices slid. [GOL/] [MET/L]The Toronto Stock Exchange’s S&P/TSX composite index ended up 0.6% on Thursday and 1.6% higher for the month, its fourth straight monthly gain, marking its longest monthly winning streak since 2021.Favorable inflation data from the U.S. and domestic gross domestic product (GDP) data on Thursday revived some hopes of an interest cut by the Federal Reserve and the Bank of Canada in the early half of the year.Earnings from Canadian Natural (NYSE:CNQ) Resources, TD Bank Group and Canadian Imperial Bank of Commerce, which beat quarterly profit estimates also added to the rally on the TSX in the previous session.Looking forward, a monthly reading of manufacturing activity is due in the United States and in Canada after the opening bell on Friday.Meanwhile, Canadian Western Bank (TSX:CWB) reported its first-quarter profit above analysts’ estimates.COMMODITIES AT 7:05 a.m. ETGold futures: $2,063.5; +0.4% [GOL/]US crude: $79.51; +1.6% [O/R]Brent crude: $83.16; +1.5% [O/R] More

(Reuters) -U.S. stock index futures were muted on Friday after a rally in the previous session, driven by enthusiasm about the potential for artificial intelligence and an inflation reading that strengthened bets of interest rate cuts by June this year.The tech-heavy Nasdaq closed at a record high on Thursday, spurred by gains in AI-linked stocks such as heavyweight chip designer Nvidia (NASDAQ:NVDA) and its rival Advanced Micro Devices (NASDAQ:AMD), which hit an all-time peak.Shares of Nvidia, the key driver of the AI-led rally on Wall Street this year, were up 0.9% in premarket trade, while those of Advanced Micro Devices climbed 2.6% after a 9% surge in the previous session.The Wall Street rally found further support as the personal consumption expenditures (PCE) report came in-line with expectations on Thursday and showed annual inflation growth was the smallest in three years.Still, some analysts pointed to signs of stubborn price pressures posing a threat to prospects of rate cuts in the first half of the year.”Inflation is still sticky and bumpy. We know that the Federal Reserve won’t be able to cut the interest rate anytime before summer,” said Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank.Adding to the risk-off mood on Friday, New York Community Bancorp (NYSE:NYCB) slumped 25.5% after the regional lender said it had found “material weaknesses” in internal controls related to its loan review and revised its fourth-quarter loss 10 times above the previously stated numbers. Shares of other regional banks Zions Bancorp and Keycorp fell 2.0% and 1.3%, respectively.At 7:05 a.m. ET, Dow e-minis were down 41 points, or 0.11%, S&P 500 e-minis were down 4 points, or 0.08%, and Nasdaq 100 e-minis were up 3.25 points, or 0.02%.All three indexes clocked their fourth straight monthly gains on Thursday, while the S&P 500 notched a fresh closing high as euphoria around AI and a strong fourth-quarter earnings season propelled stocks to new heights in February.Investors now await data on manufacturing activity and consumer sentiment as well as remarks from Fed officials including Fed Bank of San Francisco President Mary Daly later in the day for further clues on the interest rate path.Among other stocks, cybersecurity firm Zscaler (NASDAQ:ZS) shed 7.5% as the company reported higher operating expenses in the second quarter.Dell Technologies (NYSE:DELL) jumped 22.3% after the personal computer maker forecast annual revenue and profit above Wall Street estimates, betting on demand for its AI servers.Autodesk (NASDAQ:ADSK) gained 8.7% as the company’s annual revenue forecast exceeded expectations on resilient demand for its design software products.Apple (NASDAQ:AAPL) slipped 0.8% after brokerage Goldman Sachs removed the iPhone maker’s stock from its conviction list.Everbridge (NASDAQ:EVBG) surged 24.1% after private equity firm Thoma Bravo increased its offer price for the software firm, valuing it at about $1.8 billion. More

LONDON SYDNEY (Reuters) -Global shares drifted around record highs on Friday after U.S. and euro zone inflation data and weak global factory surveys kept hopes of central bank rate cuts in coming months intact. With markets dominated by bets of both the U.S. Federal Reserve and the European Central Bank lowering borrowing costs in June, Europe’s Stoxx 600 index rose 0.2% in early dealings, extending an all-time record. Futures trading implied Wall Street’s S&P 500 stock index, which also hit a record in the previous session, would edge lower later in the day while contracts on the technology-heavy Nasdaq 100 were seen easing 0.2%.In Asia, Japan’s Nikkei index jumped 1.9% to hit a fresh all-time high, extending a surge of 7.9% the previous month when it breached levels last seen in 1989. Markets see a 76% probability that the Fed will start cutting interest rates in June and around a 60% chance of the ECB dropping its deposit rate the same month, even without a recession expected.”The period of double-digit inflation from which we are emerging is well and truly over,” said Florian Ielpo, head of macro at Lombard Odier in Geneva.U.S. personal consumer expenditures (PCE), the Fed’s preferred gauge for inflation, rose 2.4% in January, the smallest annual increase in three years, data on Thursday showed. Inflation across the 20-nation euro zone also eased to 2.6% in February from 2.8% a month earlier, according to Eurostat figures published on Friday. But a further softening of economic growth could change the market narrative if investors start to worry about companies’ earnings, said Jon Mawby, co-head of absolute and total return credit at Pictet Asset Management. Economists polled by Reuters expect the U.S. economy to grow by 2.1% this year and the euro zone to advance by 0.5%.”I think there’s a not insignificant probability that the softer data is telling the real (economic) story,” Mawby said. Global factory surveys on Friday showed manufacturing output had continued to fall in both Europe and Asia. HCOB’s February final euro zone manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, dipped to 46.5 from January’s 46.6, below the 50 mark separating growth in activity from contraction for a 20th month.UK manufacturing output contracted for the 12th month as job cuts accelerated while extended weakness in the German PMI was viewed as indicative of a recession. Government bond trading on Friday was steady, as investors balanced the lacklustre PMI surveys with the fact the euro zone inflation drop was not quite as steep as expected and core inflation remained stubbornly high. Germany’s 10-year Bund yield was flat at 2.46% after falling 6 basis points (bps) on Thursday.The 10-year Treasury yield, the benchmark for debt costs worldwide, inched 3 bps lower to 4.22%. Bond yields move inversely to prices. An index measuring the dollar against competing currencies was steady. The yen JPY=EBS > weakened beyond 150 per dollar after contrasting comments from Bank of Japan officials kept investors guessing about when it might end its negative interest rates policy. Oil prices were higher as traders awaited producer group OPEC+’s latest supply decision. Brent added 1.1% to $82.81 a barrel, while U.S. crude rose by the same amount to $79.11. The spot gold price was 0.6% higher at $2,054.70. More