Economy

The Dallas-based company expects full-year earnings per share to be in the range of $4.25 to $4.65, the mid-point of which was above analysts’ estimates of $4.34, according to LSEG data. The company’s shares rose 6.5% in premarket trade. The upbeat full-year forecast comes after the company, which provides services such as leasing, management and sale of properties, had trimmed its forecasts for two straight quarters in 2023 on weak commercial property markets. While property sales revenue across regions continued to year-on-year decline, with buyers and sellers firmly on sidelines of the market, property leasing revenues edged up 1%, led by growth in Europe.Other segments such as loan servicing and facilities management fueled the bulk of revenue growth.CBRE reported fourth-quarter revenue of $8.95 billion, beating analysts’ estimates of $8.44 billion. The company’s adjusted earnings per share of $1.38 also topped analysts’ estimates of $1.18. More

The Andean nation last month reduced its key rate by 100 basis points to 7.25%, with the monetary authority seeing inflation pressures easing. The cut, in line with estimates, was not a unanimous decision.However, the board members agreed that a larger cut “could be a big surprise that might generate unnecessary volatility,” the statement added.One member said that a cut of 125 bps points or more was, in his view, “the best response to the macro scenario and reduced risks of inflation being lower than desired”.The board members agreed that inflation was converging to the 3% target at a faster rate than had been expected some time ago.Economic activity in Chile is “on track with the forecasts made in December”, even though temporary disruptions in sectors such as fishing, mining, and manufacturing have been observed, the statement added. Despite the split vote, all members agreed that the proper implementation of monetary policy implied meeting the inflation target in an efficient manner, at the lowest possible cost in terms of activity. A poll of analysts released by the monetary authority on Monday showed the central bank is expected to lower the benchmark interest rate by another 100 basis points to 6.25% at its next meeting in April. More

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WASHINGTON (Reuters) – Rebuilding Ukraine’s economy after Russia’s invasion nearly two years ago is expected to cost $486 billion, 2.8 times its 2023 expected economic output, a new study by the World Bank, United Nations, European Commission and the Ukrainian government found.The estimate released Thursday covers the period from Russia’s invasion on Feb. 24, 2022, through Dec. 31, 2023, and quantifies the direct physical damage to buildings and other infrastructure, the impact on people’s lives and livelihoods and the cost to “build back better,” the World Bank said.That 10-year cost estimate is up from $411 billion last March, with housing needs topping the list at $80 billion or 17%, followed by transport needs of $74 billion or 15%, and commerce and industry at $67.5 billion, or 14%.”The $486 billion is an unfathomably large amount, and, of course, it reflects real needs,” said Arup Banerji, World Bank regional country director for Eastern Europe, although he noted that the high rate of damages seen in the first months of the war had slowed sharply.The report said direct damages from the war had reached almost $152 billion, with losses concentrated in regions such as Donetsk, Kharkiv, Luhansk, Zaporizhzhia, Kherson and Kyiv. Disruptions to economic output and trade, as well as other war-related costs, such as removing debris, would likely add another $499 billion, it said.The new estimate excludes reconstruction needs already met through the Ukraine state budget or through partners and international support.The losses it maps out are staggering, with about 2 million housing units – about 10% of the total housing stock of Ukraine – either damaged or destroyed, as well as 8,400 km (5,220 miles)of motorways, highways, and other national roads, and nearly 300 bridges.The report said Ukraine needed some $15 billion to cover the most urgent repair, recovery and reconstruction priorities in 2024, of which about $5.5 billion had already been met through the state budget and donor support.Banerji lauded the Ukrainian government for squeezing “every cent they could” out of their budget to cover costs, including social transfers to keep citizens from falling into abject poverty. They also planned to undertake some 200 separate reforms to governance, energy and other areas, he said.”As it becomes clear that the war will be longer than most of us imagined or feared … the Ukrainians themselves (are) saying we need to do the reforms for our economy to grow, to attract private sector investment … to increase our tax revenues,” he said. “Ukraine is starting to take much more ownership of its own future.”He said the Ukrainian economy had proven remarkably resilient in the face of the war. News that over $4 billion in foreign direct investment had flowed into Ukraine in the first three quarters of 2023 showed that foreign investors saw good opportunities, he said.Four of five firms continued to operate in Ukraine, despite the war, with many relying on digital operations or moving sites to stay in business, he added.The report noted that as of December, about 5.9 million Ukrainians remained displaced outside of the country, compared with 8.1 million reported in the last needs assessment in 2023. The number of internally displaced persons had also gone down to around 3.7 million, compared with 5.4 million in spring 2023. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.This article is an on-site version of Martin Sandbu’s Free Lunch newsletter. Sign up here to get the newsletter sent straight to your inbox every ThursdayI’m Tej Parikh, the FT’s economics leader writer, and I am standing in for Martin Sandbu, who is away this week. With another splash of “hot” economic data, belief in America’s “strong” economy is only getting stronger. I play contrarian. Everyone loves a good story. Narratives help us connect what we observe to a bigger picture that we can make sense of. Economists and investors make stories all the time. The story of the “strong” US economy has not gone away. The S&P 500 hit a new record last week, in part down to the rosy economic outlook. The US bull-bear spread (or positive minus negative beliefs) in the latest AAII Sentiment Survey is at “an unusually high level” and above its historical average.The positivity is backed by headline data: US economic growth has surpassed most forecasters’ expectations, despite high interest rates and inflation. Unemployment is near record lows, and consumers have been spending freely.But our bias towards neat narratives can also cause us to underweight discrepancies that do not fit into our world view and blind us to turning points. I sense many US watchers are extrapolating the resilience of 2023 into this year. They could be right, but playing devil’s advocate is always a useful exercise to ward off confirmation bias.So, for my first guest Free Lunch, I thought I would take on a dominant global economic narrative, and deliberately take the contrarian view. Here it goes, the bearish case for the American economy:First to those “stunning” job numbers. The Bureau of Labor Statistics’ total payrolls number for January was undeniably strong. But focusing on the “blowout” headline figure detracts from a more nuanced story. Full-time employment has actually been flat since the summer, and it fell last month. A rise in part-time work and individuals with multiple jobs may be propping up the overall numbers. The BLS’s household survey, which excludes multiple jobholders, points to a cooling labour market. Even if one chooses to ignore that: in a research note Goldman Sachs said it would “heavily discount” the total 353,000 gain in January payrolls as seasonal adjustment factors were likely to be overinflating it.Either way, yes, a lot of Americans have jobs. But that is not necessarily a sure-fire signal of a strong economy. What matters is the nature of those jobs — and which way the market is headed. In December, close to 40 per cent of those surveyed by Harris Poll said their households had relied on additional incomes — such as from multiple jobs — to make ends meet. A significant portion of those barely managed to cover their monthly expenses. A YouGov poll also shows that more than 40 per cent of registered US voters are worried about their job security.Next, look at pay. The Atlanta Fed’s Wage Growth Tracker has been on a downward trend since last March. That looks likely to continue. The NFIB’s employment intention index — a measure of future hiring activity — and the jobs quit rate are falling fast. That matters as both have been remarkably well correlated with private payrolls. Real wages may be rising in aggregate, but not all jobs and geographies are uniform — many are still, and will remain, worse off from the recent inflationary period.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Right, so that should at least cast some doubt on the momentum in the US jobs market. Now for consumer spending. It was surprisingly strong last year. But it had rocket boosters underneath it in the form of pandemic savings — and government support. Those are now close to depletion, according to estimates from Capital Economics. So, the resilience of the American consumer will now be increasingly tested. Indeed, credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels. And average mortgage rates are still near 7 per cent; close to a two-decade high.The upshot? The American consumer is losing momentum. Visa’s Spending Momentum Index, which draws upon the company’s card usage data, picks up sales at physical stores, purchases of services and the use of digital commerce (which headline measures omit). It suggests fewer consumers are spending more, relative to the previous year, for both discretionary and non-discretionary items. Elsewhere, airline passenger numbers are trending down, as is hotel occupancy and the number of restaurant diners according to OpenTable.So, just this cursory contrarian glance at US households should help assuage some of the confusion about why a “solid” jobs market and falling inflation are doing little to improve Americans’ faith in President Joe Biden’s handling of the economy. The latest FT-Michigan Ross poll says as much.Now for US businesses. Higher interest rates are increasingly having an impact. Last year’s boom in Chips Act-related capital expenditure is easing off, as are investment intentions. Bank lending standards remain tight. The read across from the record-breaking stock market to the real economy is even more unreliable than usual. The “Magnificent Seven” tech stocks — fuelled by optimism about artificial intelligence — have driven the rise of the S&P 500. But the equal-weighted version of the index remains below the all-time high it set in early 2021. The Russell 2000 index of smaller companies is about 20 per cent below its 2021 peak.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.You might still cling to the stellar 3.3 per cent annualised growth rate last quarter. But even there there are questions. A gap has opened up between gross domestic product — a measure of all expenditure in the economy — and gross domestic income, which totals all earnings. In theory, both should match. But because they are collected from different sources, they can differ. GDI has sometimes offered a more accurate picture of true economic conditions. No measure is perfect, but this alternative suggests US growth is perhaps not as far above potential growth as GDP implies. Revisions are always possible.So even before factoring in the November presidential election, and what the outcome might mean for the US’s economic trajectory, there may be reason to doubt America’s ongoing resilience. Convinced? Send me your thoughts at [email protected] or @tejparikh90 on X.For what it’s worth, over the course of writing this column, I do think US strength is easing and many temporary factors that propped up activity last year — such as savings (partly from government support), deficit spending, Chips Act expenditure and even the Federal Reserve’s bank term funding programme (which in effect gave the banking system free money) — are either easing or coming to an end. It is debatable whether those interventions constitute underlying resilience, but high rates will now certainly test the economy. How it all plays out will depend, in part, on the Fed’s moves.The bigger picture is that digging under the headlines, disaggregating totals, focusing on the trend (and not the past), looking at alternate data sets and actually finding out what is behind the numbers is an important test of the veracity of the stories we tell ourselves. Sometimes it can be an eye-opener.Other readablesThe competition between Singapore-based Shein and China’s Temu to sell fast fashion and cheap household items to westerners is heating up. Who thought just-in-time supply chains were dead?The FT’s Unhedged has a typically sober piece calling for calm over this week’s hotter than expected US CPI data. Hint: go beyond the headline.Climate change is transforming global insurance. The Big Read series on “the uninsurable world” explores the cost of protection against extreme and frequent weather events, beginning with consumers.Numbers newsThe Bank of England’s Bank Underground blog has a nerdy statistical piece that explores a wage growth measure that is reweighted to better match inflation.UK inflation holds firm at 4 per cent in January. Forecasters had expected higher.Recommended newsletters for youChris Giles on Central Banks — Your essential guide to money, interest rates, inflation and what central banks are thinking. Sign up hereTrade Secrets — A must-read on the changing face of international trade and globalisation. Sign up here More

The ECB has kept interest rates unchanged at a record high since September and has been pushing back on rampant rate cut talk among investors, arguing that crucial data, particularly about wages, is still missing. “The latest data confirms the ongoing disinflation process and is expected to bring us gradually further down over 2024,” ECB President Christine Lagarde told a European Parliament hearing in Brussels.”The current disinflationary process is expected to continue, but the Governing Council needs to be confident that it will lead us sustainably to our 2% target,” Lagarde added, repeating the ECB’s now standard message.That message was echoed by Spanish central bank Governor Pablo Hernandez de Cos, who said the next move was a cut but there was no hurry.”The next move in interest rates is going to be a cut,” de Cos said in Madrid. “We are not being explicit on when that will happen, I think there is some time left for that, but it is important to underline that the ECB’s target is the 2% symmetric target.”If the ECB moved too quickly, inflation could rise again which might force the ECB into tightening again, a costly back and forth, Lagarde warned. Markets now see 113 basis points of rate cuts this year, down from 150 basis points just weeks ago, accepting the ECB’s concerted pushback against excessive policy easing bets.Giving disinflation a boost, economic growth is now hovering around zero for the sixth straight quarter and Lagarde said activity would remain “subdued” in the near term. Indeed, the European Commission on Thursday cut its euro zone GDP growth forecast to just 0.8% from 1.2%, which is only a marginal improvement on last year’s 0.5% rise.Still, the ECB keeps pushing back on rate cut bets, fearing that relatively quick nominal wage growth will push up inflation as workers look to recoup incomes lost to quick price growth. “Wage growth continues to be strong and is expected to become an increasingly important driver of inflation dynamics in the coming quarters, reflecting tight labour markets and workers’ demands for inflation compensation,” Lagarde said. The ECB’s own forward-looking wage tracker continued to signal strong wage pressures but figures do signal some levelling off at the end of last year, Lagarde argued. Still, the ECB needed to see the outcome of wage deals to be struck in the first quarter of this year before it can be certain that income growth does not put undue upward pressure on prices. More

While job cut announcements in the United States more than doubled month-on-month to 82,307 in January, they were down 20% from a year earlier, according to a report by outplacement firm Challenger, Gray & Christmas earlier in February.The technology sector, which accounted for the highest number of layoffs in 2023, has seen 34,000 job cuts in 141 firms so far this year, according to tracking website Layoffs.fyi. Here is a snapshot of job cuts announced so far in 2024: TECHNOLOGY* Amazon (NASDAQ:AMZN)’s job cuts include less than 5% of employees at Buy with Prime unit, 5% at audiobook and podcast division Audible, several hundred in streaming and studio operations, 35% at streaming unit Twitch and a few hundred at healthcare units One Medical and Amazon Pharmacy.* Layoffs at Alphabet (NASDAQ:GOOGL) include dozens at division for developing new technology X Lab, hundreds in advertising sales team, hundreds across teams, including hardware team responsible for Pixel, Nest and Fitbit (NYSE:FIT), and a majority in augmented reality team.* Microsoft (NASDAQ:MSFT) is cutting around 1,900 jobs at gaming divisions Activision Blizzard (NASDAQ:ATVI) and Xbox.* IBM (NYSE:IBM) plans to lay off some employees in 2024, but will hire more for AI-centered roles.* E-commerce firm eBay (NASDAQ:EBAY) plans to cut about 1,000 roles, or around 9% of its workforce.* Videogame software provider Unity Software to cut about 25% of workforce, or 1,800 jobs.* DocuSign (NASDAQ:DOCU) plans to reduce workforce by about 6%, or 400 employees, with a majority in its sales and marketing organizations.* Snap plans to cut around 528 jobs, or 10% of its global workforce.* Salesforce (NYSE:CRM) is laying off about 700 employees, or roughly 1% of its global workforce.* Network giant Cisco (NASDAQ:CSCO) is planning to restructure its business which will include laying off thousands of employees.* Autonomous vehicle technology company Aurora Innovation lays off 3% of workforce.* Canada’s BlackBerry (NYSE:BB) plans more layoffs, in addition to about 200 job cuts in the prior quarter. * Satellite radio company SiriusXM plans to reduce workforce by about 3%, or about 160 roles.MEDIA* Walt Disney (NYSE:DIS)’s Pixar Animation Studios is set to cut jobs as the studio has completed production on some shows.* Comcast-owned British media group Sky plans to cut about 1,000 jobs across its businesses this year.* The Los Angeles Times plans to lay off 94 journalists.* Paramount Global is planning to conduct unspecified number of layoffs.* Business Insider plans to lay off around 8% of its staff. * Bell Canada plans to slash 4,800 jobs. FINANCIAL SERVICES* PayPal (NASDAQ:PYPL) Holdings is planning to cut about 2,500 jobs, or 9% of its global workforce this year. * Payments firm Block Inc has started to cut unspecified jobs.* Citigroup is planning to reduce its headcount by 20,000 people over the next two years.* Investment banking giant Morgan Stanley is planning to cut hundreds of jobs in its wealth management unit, a person familiar with the matter told Reuters, adding that the cuts will impact less than 1% of the division’s employees. * Exchange operator Nasdaq plans to slash hundreds of jobs as it integrates fintech firm Adenza into its business. * Asset manager BlackRock (NYSE:BLK) is set to cut about 3% of its workforce, but expects larger headcount by end-2024.CONSUMER AND RETAIL* Cosmetics giant Estee Lauder (NYSE:EL) plans to cut 3% to 5% of its global workforce.* Wayfair (NYSE:W) plans to lay off 1,650 employees, or about 13% of its workforce.* U.S. department store chain Macy’s (NYSE:M) is cutting 2,350 jobs, closing five stores.* Levi Strauss & Co (NYSE:LEVI) is planning to slash 10%-15% of global corporate jobs.* Hershey’s restructuring plan will impact less than 5% of its workforce. HEALTH* Novavax (NASDAQ:NVAX) is cutting about 12% of workforce.MANUFACTURING* Defense contractor Lockheed Martin (NYSE:LMT) is planning to cut 1% of its jobs. * United Parcel Service (NYSE:UPS) plans to cut 12,000 jobs to cut costs. NATURAL RESOURCES* U.S. miner Piedmont Lithium cuts 27% of workforce in cost-cutting plan. More

BRUSSELS (Reuters) -The euro zone economy will grow slower than expected this year after price growth eroded purchasing power and high ECB interest rates curbed credit, but inflation in 2024 will also be slower than expected, the European Commission said on Thursday.The EU executive forecast that gross domestic product in the 20 countries sharing the euro currency would increase only 0.8% in 2024 rather than 1.2% it expected last November, but it would still be up from a 0.5% rise in 2023. In 2025, economic growth should accelerate to 1.5%, the Commission said, slightly reducing its earlier 1.6% forecast.”The EU economy barely expanded throughout 2023 – and prospects for the first quarter of 2024 remain muted,” EU Economic Commissioner Paolo Gentiloni told a news conference.”Price pressures have moderated faster than previously expected and energy prices are now substantially lower. As a result, while credit conditions are still tight, markets now expect the loosening cycle to start earlier,” he said.The EU’s biggest economy Germany will be the biggest drag on euro zone growth this year and next, with growth of only 0.3% in 2024 rather than 0.8% the Commission expected in November and 1.2% in 2025, after a 0.3% recession last year.The second biggest economy, France, will also grow more slowly in 2024 at 0.9% rather than 1.2% seen in November and third biggest Italy will expand only 0.6% rather than 0.9% forecast three moths ago.Because economic activity will be smaller, also consumer price growth in 2024 is likely to slow down more than previously forecast — to 2.7%, rather than only to 3.2% seen in November, from 5.4% in 2023.In 2025 inflation will decelerate further to 2.2%, close to the European Central Bank’s target of 2.0% over the medium term, the Commission said.”Lower-than-expected inflation outturns in recent months, lower energy commodity prices and weaker economic momentum set inflation on a steeper downward path than anticipated in the Autumn Forecast,” the EU executive arm said in a statement. But it noted that while inflation will continue to fall, the decline will be slower because EU governments phase out subsidies to energy prices and because shipping costs rise as a result of trade disruptions in the Red Sea.”By the end of the forecast horizon, euro area headline inflation is projected to post just above the ECB target, with EU inflation a notch higher,” the Commission said. But Gentiloni cautioned that uncertainty was exceptionally high because of geopolitical tensions and the risk of a further broadening of the crisis in the Middle East. More