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A UPS driver makes a delivery on January 30, 2024 in Miami Beach, Florida. 
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Companies announced the highest level of job cuts in January since early 2023, a potential trouble spot for a labor market that will be in sharp focus this year, according to a report Thursday from Challenger, Gray & Christmas.
The job outplacement firm said planned layoffs totaled 82,307 for the month, a jump of 136% from December though still down 20% from the same period a year ago.

It was the second-highest layoff total and the lowest planned hiring level for the month of January in data going back to 2009.
Technology and finance were the hardest-hit sectors, with high-flying Silicon Valley leaders such as Microsoft, Alphabet and PayPal announcing workforce cuts to start the year. Amazon also said it would be cutting as did UPS in the biggest month for layoffs since March 2023.
“Waves of layoff announcements hit US-based companies in January after a quiet fourth quarter,” said Andrew Challenger, senior vice president of the firm. The cuts were “driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs,”
Financial sector layoffs totaled 23,238, the worst month for the category since September 2018. Tech layoffs totaled 15,806, the highest since May 2023. Food producers announced 6,656, the highest since November 2012.
“High costs and advancing automation technology are reshaping the food production industry. Additionally, climate change and immigration policies are influencing labor dynamics and operational challenges in this sector,” Challenger said.

The report follows news Wednesday from ADP that private payrolls increased by just 107,000 for the month. On Friday, the Labor Department will be releasing its nonfarm payrolls count, which is expected to show growth of 185,000.
Initial jobless claims totaled 224,000 for the week ended Jan. 27, up 9,000 from the previous week. Continuing claims, which run a week behind, jumped by 70,000, the Labor Department reported Thursday.
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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.UK and eurozone manufacturers said their supply chains deteriorated for the first time in a year in a sign of the wider disruption to trade caused by Red Sea attacks by Houthi militants, according to a closely watched survey published on Thursday.The supplier delivery times index, part of the S&P Global purchasing managers’ index (PMI) survey published on Thursday, fell below a score of 50 in both economies in January, reflecting that a majority of businesses are reporting lengthening delivery times for supplies to reach their factories.The delays to delivery times will add to fears that ongoing Red Sea disruption will create inflationary pressure on Europe’s economy and difficulties for European manufacturers struggling with weak demand. The survey is “definitely a sign that we are starting to see the Red Sea actually impact businesses in Europe, and in fact quite a lot earlier than we expected the impact to be”, said George Moran, an economist at Nomura.The result, the first time the index has fallen below 50 since January 2023 and its lowest level in 14 months, follows the decisions of most container ships to avoid passing the Bab el-Mandeb Strait, a maritime chokepoint linking the Red Sea and the Indian Ocean. Iranian-backed Houthi militants have stepped up attacks on vessels passing the strait en route to Europe via the Suez Canal since mid-October. The Red Sea route normally accounts for 15 per cent of total global sea trade, including 8 per cent of grain, 12 per cent of seaborne oil and 8 per cent of seaborne liquid natural gas.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Businesses in most countries in Europe reported a deterioration in their supply chains, including major economies like Germany, France, and Italy. Manufacturers in Greece, one of the EU states closest to the Suez Canal, were among the hardest hit, according to the survey. Some carmakers relying on rerouted vessels for components have already felt the impact, with Tesla in Germany, Volvo Cars in Belgium and Suzuki in Hungary halting certain vehicle production lines.Companies are also facing increased shipping costs as a result of the Houthi attacks. Freight rates from east Asia to the Mediterranean are up 290 per cent compared with early November, according to the Freightos Baltic index, with a similar growth in the Asia to north Europe route. “The attacks in the Red Sea are leaving their mark,” said Norman Liebke, economist at Hamburg Commercial Bank, which compiled the French survey together with S&P Global. He added, however, that the levels of decline in the index were “a far cry” from those seen during the pandemic, when widespread supply chain disruptions caused prolonged shortages of materials for manufacturers globally. Since the first Houthi attack on October 19, Red Sea traffic has dramatically fallen. In the seven days to January 28, trade volumes in the Bab el-Mandeb Strait, which vessels pass through to get to the Suez Canal from the Indian Ocean, were down 65 per cent compared with the end of October, according to IMF PortWatch, which provides real-time indicators of port and trade activity across the world.In some countries, such as the UK, the disruptions contributed to higher input costs in January.Rob Dobson, director at S&P Global Market Intelligence, said that UK businesses participating in the survey estimated that a minimum of 12 to 18 days could be added to some expected deliveries, “disrupting production schedules and raising inflationary pressures at a time when manufacturers are already struggling with weak demand both at home and overseas”.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Many economists have raised concerns over the impact on the global inflation outlook from the crisis in the Red Sea.Oliver Rakau, economist at Oxford Economics, said that “disruption to shipping through the Red Sea now looks likely to keep transport costs elevated at least for the next few months”. He estimated that would add 0.3 to 0.4 percentage points to the eurozone headline inflation measure, with “the brunt of the impact coming in the second half of the year”.The overall inflationary risks “are not going to be massive,” said Moran at Nomura, because alternative delivery routes are available and disruptions are not occurring in a period of high demand.The impact of the events in the Middle East on consumer prices “has so far been limited,” said Andrew Bailey, governor of the Bank of England, on Thursday, “but that could change if trade disruptions continue and this poses an upside risk to our inflation projection”. More

(Reuters) – The Bank of Russia is likely to hold its key rate at 16% in February after five rate hikes in a row, as inflation pressure shows signs of easing, a Reuters poll suggested on Thursday. Double-digit interest rates are set to slow Russia’s economic growth this year. The economy contracted in 2022 as Moscow bore the brunt of sanctions in the wake of its invasion of Ukraine, but rebounded in 2023 as Western efforts to starve Russia of energy revenues proved fairly ineffective. Thirteen analysts and economists polled by Reuters expect the central bank to hold rates at its first meeting of the year on Feb. 16. Stubbornly high inflation, exacerbated by rouble weakness, high budget spending and labour shortages led the bank to hike rates by 850 basis points in the second half of last year.Mikhail Vasilyev, chief analyst at Sovcombank, said the central bank was likely to give a neutral signal. “We believe that the opportunity for lowering the key rate will open up only in the middle of the year (June or July), when inflation starts to slow down steadily,” he said. Inflation, which the central bank targets at 4%, is seen ending this year at 5.2%. That would follow annual inflation rates of 7.4% rate in 2023 and 11.9% in 2022. Inflation data in recent weeks has lowered the probability of another rate hike, CentroCreditBank economist Yevgeny Suvorov said.”But we do not rule out another increase, especially if the situation with exports continues to worsen and the exchange rate heads towards 100 (per dollar),” Suvorov said. “In this case, the central bank would have to move the rate to 18-19%.” Rouble weakness fuelled inflation in 2023. Analysts expect the rouble, currently trading at about 90 per dollar, to weaken to 93.5 over the next year, an improvement on the prediction in the previous poll.The rouble may strengthen in the short term to 87 per dollar, Vasilyev said.”The rouble is favoured by seasonally lower demand for foreign currency at the start of the year, mandatory foreign currency revenue sales for major exporters, high rouble interest rates and yuan sales from reserves as part of budgetary operations,” he said. Russia’s gross domestic product is expected to grow 1.7% this year, the poll showed, slowing from a rebound of around 3.5% in 2023 and still supported by hefty military spending. (Reporting and polling by Alexander Marrow; Editing by Andrew Heavens) More

MONTAUBAN, France (Reuters) – In the last 12 months, the cost of running Jean-Marie Dirat’s lamb farm in southwest France has jumped by 35,000 euros ($38,000), driven up by increasingly expensive fertilisers, fuel, electricity and pesticides. Money is so tight that this year he won’t pay himself. To his surprise, he even calculated he would be eligible for the minimum welfare benefit, given to society’s poorest.”My grandfather had 15 cows and 15 hectares. He raised his kids, his family, without any problem. Today, me and my wife, we have 70 hectares, 200 sheep, and we can’t even pay ourselves a salary,” Dirat told Reuters at a roadblock made of hay bales that barred access to a nuclear plant.Other farmers in the French southwest, where a nationwide movement started, complain about red tape and restrictions on water usage, as well as competition from Ukrainian imports let into the European Union to help its economy during the war. Farmers elsewhere in Europe are similarly disgruntled, with protests in Germany, Poland, Romania and Belgium coming after a new farmers’ party scored highly in Dutch elections. Their blockades and pickets are exposing a clash between the EU’s drive to cut CO2 emissions and its aim of becoming more self-sufficient in production of food and other essentials following Russia’s invasion of Ukraine. Just five months before elections to the European Parliament, the revolt is fuelling a narrative that the EU is riding roughshod over farmers, who are struggling to adapt to stringent environmental regulations amid an inflation shock.French far-right leader Marine Le Pen’s lieutenant Jordan Bardella blames “Macron’s Europe” for the farmers’ troubles. Le Pen herself says the EU needs to quit all free trade deals and that her party would block any future agreements, such as with Mercosur countries, if it wins power. Worryingly for French President Emmanuel Macron and other EU leaders, opinion polls show farmers’ grievances resonate with the public. An Elabe poll showed 87% of French people supported the farmers’ cause and 73% of them considered the EU was a handicap for farmers, not an asset.National governments are scrambling to address farmers’ concerns, with France and Germany both watering down proposals to end tax breaks on agricultural diesel. The European Commission also announced new measures on Wednesday.But the protests could amplify a shift to the right in the European Parliament and imperil the EU’s green agenda. Poll projections show an “anti-climate policy action coalition” could be formed in the new legislature in June. “The far-right’s strategy is to Europeanise the conflict,” Teneo analyst Antonio Barroso said. “Farmers are a small group, but these parties think they can attract the whole rural vote by extension.”VOICE FOR THE COUNTRYSIDEDifferent political catalysts have spurred farmers from France to Romania into action. In Germany, a week of protests against high fuel prices culminated last month in a rally of 10,000 farmers who gummed up central Berlin’s streets with their tractors and jeered Finance Minister Christian Lindner. The far-right Alternative for Germany party, running high in the polls on a lacklustre economy, tried to capitalise, dropping its usual opposition to subsidies and saying farmers demands should be met.In March 2023, discontentment with climate and agriculture policy helped new party BBB win regional elections in the Netherlands, the world’s second-biggest agricultural exporter. Its list for June’s EU elections will be led by Sander Smit, a former EU parliament adviser who wants to be “a voice of and for the countryside”, campaigning for an easing of EU restrictions on agricultural land use.”The EU must start working again for citizens, farmers, gardeners, fishermen, for communities, families and entrepreneurs,” Smit, 38, said.French unions like the powerful FNSEA have brought discipline to the farmers rallies, avoiding the violence seen during the “yellow vest” protests that rocked France in Macron’s first term and already winning concessions from the government.But unions say they can’t control who farmers will vote for. WINDS TURNINGIn France, support from the EU’s Common Agricultural Policy (CAP) means farmers, although politically conservative, have historically been more pro-European than the average voter.In the 2022 presidential election, Le Pen did less well among farmers than in the rest of the population, while pro-European Macron outperformed, according to an Ifop/FNSEA poll. Now, however, some farmers say they are tempted to vote for Le Pen’s Rassemblement National (RN) in June in protest at the EU’s climate drive, which they complain crushes production and leaves space for global competitors.”Europe is putting us on a drip to let us die silently,” Pierre Poma, a 66-year old retired farmer in Montauban in the southwest, told Reuters. He joined the RN a few years ago and ran for a parliamentary seat in 2022, garnering 40% of the votes compared with the 15% Le Pen’s party won in the same constituency in 2017.Poma, who used to grow peaches, pears and apples, says he had to sell his house because he could not turn a profit. He blames red tape and the EU’s farm-to-fork strategy he abhors.After visiting farmers’ motorway blockades in recent days, he is confident like-minded parties will be a force to reckon with in Brussels after June. “Our group is growing, in Germany, in Hungary, elsewhere. It’s the end of a world, the end of the policies of the past,” Poma said.($1 = 0.9258 euros) More

(Reuters) – Global passive equity funds’ net assets surpassed those of their active counterparts for the first time in 2023 as investors increasingly sought lower-cost funds that mirror broad market indices.According to LSEG Lipper, global passive equity funds’ net assets stood at a record $15.1 trillion at the end of December while those of active funds was $14.3 trillion. Passive funds, often associated with stable, large-cap stocks with strong fundamentals and lower volatility, have grown in popularity since the 2008 financial crisis as investors sought safety in periods of uncertainty.John Cunnison, chief investment officer at Baker Boyer said large U.S. companies have led global market performance across time frames ranging from 3 years to 10 years, significantly lifting market cap-weighted passive index funds. “When these companies have extraordinarily strong performance, the performance of the indices is better than just about any other method of portfolio construction.”The SPDR S&P 500 ETF Trust (ASX:SPY) led passive fund inflows in 2023, netting a substantial $52.83 billion. It was closely followed by the iShares Core S&P 500 ETF and Fidelity 500 Index Fund, which attracted a net $38.1 billion and $24.79 billion, respectively.Active funds faced consistent outflows, a situation worsened by their higher management fees and underwhelming returns. According to Lipper data, last year saw active funds suffer outflows totalling $576 billion, in stark contrast to passive funds, which attracted inflows of $466 billion.Analysts say this influx into passive funds could spawn market imbalances, with large-cap stocks ascending regardless of their actual growth potential.Geoffrey Strotman, senior vice president at Segal Marco Advisors, said higher inflows into passive funds can create or exacerbate pricing discrepancies and lead to a less efficient market.”This inefficiency should create more opportunity for active managers to purchase stocks at attractive pricing and sell stocks when they are too expensive.”Mark Haefele, chief investment officer of wealth management at UBS AG, expects active funds to experience a resurgence this year, with likely Federal Reserve rate cuts expected to reduce borrowing costs and boost earnings more significantly for small-cap companies than their larger counterparts.”There can be bigger payoffs to stock selection in smaller-cap indexes compared to large caps, due to a higher dispersion in performance. Since most companies are less followed by the analyst community, there can be greater inefficiencies that can be exploited,” he said.”As a result, there is greater scope for active managers to achieve above-market returns (alpha) in this part of the equity market.” More

Six out of nine members of the BoE’s Monetary Policy Committee voted to keep rates at a 15-year high of 5.25%. Jonathan Haskel and Catherine Mann voted for a 0.25 percentage-point hike, while Swati Dhingra voted for a cut of the same size. It marked the first time since August 2008 that different policymakers have voted to move interest rates up and down at the same meeting.MARKET REACTION: BONDS: Britain’s 2-year gilt yield rose and was last trading at 4.28%, up from 4.24% just before the rate decision. Ten-year yields were at 3.83%, versus 3.79% earlier, and up around 3 basis points on the day.Money markets price in a roughly 50% chance of a quarter point rate cut in May down from a more than 60% chance earlier in the day.FOREX: Sterling was last down 0.2% against the dollar at $1.2663, compared with $1.2635 before the decision. It was at 85.38 per euro, versus 85.58 pence earlier.STOCKS: London’s FTSE-100 trimmed its gains and was last up around 0.3% on the day.COMMENTS:FIONA CINCOTTA, MARKET STRATEGIST, CITY INDEX, LONDON:”I think that vote was a bit more hawkish than what we were expecting and I understand inflation is still sticky. But it does feel like they’re pushing back quite strongly still – at least two are – on the prospect of a rate cut.””Given what we’ve seen from the state of the economy, in the sense that we’ve seen retail sales dropping, we are seeing the manufacturing sector is still in contraction. But the service sector is still relatively strong, the labour market is holding up, service sector PMIs are still in expansionary territory and inflation is still double the Bank of England’s target, that (could be) what those two members are focusing on.””The market isn’t necessarily paying huge amounts of attention to the meeting. The pound has been rangebound for quite some time around that $1.27 level and it feels like it is still waiting for a little bit more confirmation from the Bank of England about the timing of the move.” JANE FOLEY, HEAD OF FX STRATEGY, RABOBANK, LONDON:”I think the market is very focused on the voting pattern and that two members still voting for a hike, has led the market into thinking that there was a slightly hawkish element. If you remove the voting pattern much of the rhetoric is fairly unsurprising.””The market is going to want to know why they have changed their language to take out the risk that more hikes may be needed while there are two members voting for a hike, what signal does the market need to take from that?””Market place a lot of store on the voting patterns and that is often the source of confusion. We don’t see this for other central banks, the fact that we do often raises more questions than answers.”KYLE CHAPMAN, FX MARKET ANALYST, BALLINGER & CO, LONDON”While the ECB and the Fed are hinting at rate cuts, the Bank of England’s reticence for these discussions continues to make it stand out as an outlier. The most interesting point for us is the expectation that inflation will soon temporarily reach the 2% target before reaccelerating – this suggests that a sharp fall in inflation in the near-term may be less impactful on policy than we would have thought previously.””The materialisation of this forecast would entail holding policy firm despite 2% inflation prints, and then cutting rates later in the year while inflation is rising. We have doubts that the MPC would be able to credibly hold their nerve and not start cutting in this scenario.”PETER SCHAFFRIK, GLOBAL MARKET STRATEGIST, RBC CAPITAL MARKETS, LONDON:”The long and the short of it is that they (the BoE policymakers) are moving slowly and steadily away from a hawkish stance. There was one vote for a cut.””The text suggests the views are balanced, but not as hawkish as it used to be.”PHILIP SHAW, CHIEF ECONOMIST, INVESTEC, LONDON:”The fact that two members are still voting for higher rates suggests that there is no material, immediate momentum to lower rates and the inflation projections implicitly show that the committee as a whole believes that the speed of rate cuts implied by yield curve has been too rapid.””We stand by our baseline call that the committee will begin to ease in June, but this is of course subject to data over the next few months. Furthermore the fact that the MPC is very divided is a good pointer to the prevailing uncertainty.” JEREMY BATSTONE-CARR, STRATEGIST, RAYMOND JAMES, FRANCE:”It appears there no longer exists a firm commitment to keep rates at levels restrictive to economic activity. However, rate-setters are likely to tread warily and will wait to see confirmation that inflation has resumed its downward pathway before committing to policy easing.””While the exact timing of the first rate cut remains in doubt, the point at which monetary policy is finally loosened is probably not all that far away.”DAVID MORRISON, SENIOR MARKET ANALYST, TRADE NATION, LONDON:”What is really interesting is the voting. We got two voting for a hike and one for a cut. For two members to still be going for a rate hike, that does say to me that rates aren’t coming down any times soon particularly. I would have expected more of a shift.””There is still that hawkishness at the Bank and I think it’s kind of justified. Inflation is far too high in the UK and far too sticky and is taking far too long to shift downwards.” More

TORONTO (Reuters) -Small, loosely-regulated lenders in Canada who rode a pandemic housing boom to offer mortgages at high interest rates are now showing signs of stress as a spike in living costs pushes some homeowners toward a default.Canada’s C$2 trillion ($1.5 trillion) mortgage market is dominated by the “Big Six” major banks that include Royal Bank of Canada and TD Bank.But for many Canadians unable to pass a rigorous test to qualify for a home loan, there has long been another option: private lenders who offer short-term mortgages at rates that are several percentage points higher than those charged by big banks.One subset of this group of lenders – Mortgage Investment Companies (MICs) – has mushroomed in the past three years, taking on riskier deals, when record low borrowing costs pushed up mortgage demand at the peak of a housing market boom in 2022. But as the real estate market softened in Canada over the past year while the cost of living and interest rates rose, consumers struggled to make their monthly payments, forcing many MICs to sell properties cheaply to recoup losses as homeowners defaulted and property prices declined. “It is reasonable that the alternative mortgage funds today are experiencing some stress given our markets are adapting to a new normal,” said Dean Koeller, chair of the Canadian Alternative Mortgage Lenders Association.Data from the Canada Mortgage and Housing Corp showed that nearly 1% of mortgages from private lenders were delinquent in the third quarter of 2023 compared with the industry-wide rate of 0.15%. The market share of newly-extended mortgages by private lenders in the first quarter of 2023 jumped to 8% from 5.3% in 2021, while the share of those lent by big banks fell to 53.8% from 62%, the data showed.Data provided to Reuters by Toronto-based commercial mortgage brokerage LandBank Advisors also captures some of the stress private lenders are facing.LandBank Advisors studied over 1,000 mortgages issued between 2020 and January 2024 and found that about 90% of home buyers who were forced to sell their homes because of default in the Greater Toronto Area, Canada’s biggest real estate market, had taken out mortgages from private lenders.MICs generated more than half of the mortgages among the 90% pushed into fire sales.About 50 such forced sales in the Greater Toronto Area region were registered so far in 2024, compared with 558 in 2023 and 92 in 2020.ON ALERTIn response to the rise in interest rates since March 2022, the office of the Superintendent of Financial Institutions – which regulates the country’s big banks – last year directed them to hold more capital to cover for loan defaults.But private lenders, which are overseen by provincial governments, face fewer regulations and unlike the major banks, do not require that clients take federally-mandated mortgage tests that ensure they can make payments even if rates go up. Superintendent of Financial Institutions Peter Routledge, whose office does not directly oversee private lenders, said this month that a “sudden proliferation of unregulated lending” would be a problem but that so far the sector was not growing in a way that gave cause for concern. The Financial Services Regulatory Authority, which oversees mortgage brokerages, has begun campaigns to protect consumers from unaffordable, high fee mortgages and issued new guidance and tighter licensing requirements on mortgage brokerages. “Many MICs opened up three or four years ago. The problem is they opened up… when values were at their highest and when you look at their books, a lot of their books are underwater,” Jonathan Gibson at LandBank Advisors said.”MICs are trapped or are becoming more and more picky.”But some well-capitalized and more experienced private lenders see M&A opportunities by rescuing struggling lenders, industry executives say.Jesse Bobrowski, vice president of business development at Calvert Home Mortgage Investment Corporation, said his firm is on the lookout for acquisitions or loan books to buy.”Definitely we’re looking to expand our market share,” Bobrowski said. ($1 = 1.3428 Canadian dollars) More