Economy

The personal consumption expenditures price index, excluding food and energy prices, rose 0.2% for the month and 3.5% on a year-over-year basis, both in line with expectations.
Personal income and spending both rose 0.2% on the month, also meeting estimates and indicating that consumers are keeping pace with inflation.
Continuing unemployment claims surged to 1.93 million, an increase of 86,000 and the highest level since Nov. 27, 2021.

Inflation as measured by personal spending increased in line with expectations in October, possibly giving the Federal Reserve more incentive to hold rates steady and perhaps start cutting in 2024, according to a data release Thursday.
The personal consumption expenditures price index, excluding food and energy prices, rose 0.2% for the month and 3.5% on a year-over-year basis, the Commerce Department reported. Both numbers aligned with the Dow Jones consensus and were down from respective readings of 0.3% and 3.7% in September.

Headline inflation was flat on the month and at a 3% rate for the 12-month period, the release also showed. Energy prices fell 2.6% on the month, helping keep overall inflation in check, even as food prices increased 0.2%.
Goods prices saw a 0.3% decrease while services rose 0.2%. On the services side, the biggest gainers were international travel, health care and food services and accommodations. In goods, gasoline led the gainers.
Personal income and spending both rose 0.2% on the month, also meeting estimates and indicating that consumers are keeping pace with inflation. However, both numbers fell on the month; income rose 0.4% in September while spending was up 0.7%. Slower spending growth, though, aligns with the Fed’s goal of cooling the economy so inflation can recede.
Stocks rallied following the news, as the Dow Jones Industrial Average hit a 2023 high. Bonds sold off, with Treasury yields popping as the rate-sensitive 2-year note moved up more than 6 basis points (0.06 percentage point) to 4.71%.
Futures market pricing continued to point to the likelihood that the Fed won’t raise rates at any of its upcoming meetings and in fact likely will start cutting by the springtime. In all, traders are pricing in as many as

While the public more closely watches the Labor Department’s consumer price index as an inflation measure, the Fed prefers the core PCE reading. The former measure primarily looks at what goods and services cost, while the latter focuses on what people actually spend, adjusting for consumer behavior when prices fluctuate. Core CPI was at 4% in October while headline was at 3.2%.
In other economic news Thursday, initial weekly jobless claims rose to 218,000, an increase of 7,000 from the previous period though slightly below the 220,000 estimate. However, continuing claims, which run a week behind, surged to 1.93 million, an increase of 86,000 and the highest level since Nov. 27, 2021, the Labor Department said.
“The Fed is on hold for now but their pivot to rate cuts is getting closer,” said Bill Adams, chief economist at Comerica Bank. “Inflation is clearly slowing, and the job market is softening faster than expected.”
Markets already had been pricing in the likelihood that the Fed is done raising interest rates this cycle, and the PCE reading, along with signs of a loosening labor market, could solidify that stance. Along with the anticipation that the rate hikes are over, markets also are pricing in the equivalent of five quarter percentage point rate cuts in 2024.
New York Fed President John Williams said Thursday that he expects inflation to continue to drift lower, finally hitting the Fed’s 2% target in 2025. However, he said policymakers will need to stay vigilant and keep rates at a “restrictive” level.
“My assessment is that we are at, or near, the peak level of the target range of the federal funds rate,” he said in prepared remarks for a speech in New York. “I expect it will be appropriate to maintain a restrictive stance for quite some me to fully restore balance and to bring inflation back to our 2 percent longer-run goal on a sustained basis.”
The fed funds rate, the central bank’s benchmark level for short-term lending, is targeted in a range between 5.25%-5.5%, its highest in more than 22 years. After implementing 11 hikes since March 2022, the Fed skipped its last two meetings, and most policymakers of late have been indicating that they are content now to watch the impact of the previous increases work their way through the economy.
Other economic signals lately have shown the economy to be in fairly good shape, though several Fed officials recently have said the data doesn’t square with comments they are hearing on the ground.
“I’m hearing consumers slowing down,” Richmond Fed President Thomas Barkin said Wednesday at the CNBC CFO Council Summit. “I’m not hearing [the] consumer falling off the table. I’m hearing normalizing, not recession, but I am hearing consumer slowing down.”
The Fed’s inflation report comes the same day as encouraging news from the euro zone.
Headline inflation there fell to 2.4% on a 12-month basis, though core, which excludes food, energy and tobacco, was still at 3.6%, though down from 4.2% in September. Like the Fed, the European Central Bank targets 2% as a healthy inflation level.
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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is a professor at Harvard’s John F Kennedy School of Government and director of the Harvard Growth LabWith the tragic events unleashed by Hamas on October 7, and global focus on the region dominated by the subsequent conflict in Gaza, it is easy to lose sight of the fact that Lebanon is in a catastrophic economic situation, one which is a source of serious and avoidable human suffering. In 2019, the country fell into a triple crisis, involving the downfall of its currency, its banks and its public debt. GDP has collapsed by close to 40 per cent. Although lira-denominated debts have been wiped out by inflation and depreciation, government and central bank dollar-denominated debts represent seven times current GDP. Four years has not been long enough to find a path out of the crisis. In September, an IMF mission visited Beirut once again to advance a resolution, without tangible results. While political gridlock is the main problem, sometimes stalemates can be broken with a solution that generates enough winners. That is the spirit in which Ugo Panizza, Carmen Reinhart and I, together with a team at the Harvard Growth Lab, propose a plan to quickly resolve the crisis. First, to restore economic stability, we advocate for full dollarisation. In an already de facto dollarised economy, and given the country’s troubled political economy, a domestic currency with a flexible exchange rate and inflation targeting would lack credibility and lead to very high interest rates. Dollarisation is a good fit because Lebanon’s goods and labour markets are already deeply integrated with countries, mostly in the Gulf, that peg to the US currency. Second, we propose an innovative solution to the debt overhang. All crises are caused by an unsustainable accumulation of debt, but what makes the Lebanese one different is the role of Banque du Liban, the country’s central bank. Pre-crisis deficits were funded through the BdL which offered dollar-denominated deposits to commercial banks. The BdL in turn financed the government in local currency. When the crisis hit, the currency mismatch broke the BdL and, with it, the banks. That is why Lebanese citizens cannot access their own bank deposits.We propose tackling this by converting $76bn of commercial banks’ dollar claims on the central bank into interim government certificates. Ninety per cent of these will be given to large depositors for their balances in excess of a threshold that we estimate at $100,000 to $150,000. The remaining 10 per cent will be absorbed by the banks. This operation will move the insolvency to the government and leave the country with a solvent, although much smaller BdL and banking system. Third, public debt, including the newly issued certificates, will be renegotiated with creditors at a later date, in the context of an IMF-supported programme. Given what we estimate as $8bn in additional financing needed until 2030 to support the recovery, a haircut upwards of 80 per cent on these debts will be necessary. The government will need to chart a credible fiscal path, achieving a 3 per cent primary surplus by 2030 and a 6 per cent of GDP adjustment in six years. This will have to be gradual to prioritise the recuperation of infrastructure required for the economy to recover. We believe the first two steps can be done swiftly and unilaterally before an IMF-led debt deal, allowing for a quick bank reopening and economic recovery.Fourth, the country will need export-oriented growth drivers. We see opportunities in quality agro-processed products, increased tourism and the expansion of high-skill business services including through remote work. Recently discovered offshore natural gas resources may also help.So far, Lebanese policymakers have been unable to find enough common ground to tackle the crisis. Economic recovery is impossible without much-needed consensus — this sequence of building blocks could help them achieve it. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Inflation in the eurozone has fallen far more than expected to 2.4 per cent in November, the slowest annual pace since July 2021, providing some relief to consumers and fuelling hopes that interest rates could soon be cut.The sharp drop from 2.9 per cent a month earlier adds to tensions between investors who hope rates will be cut soon and central bankers seeking to keep borrowing costs high until the biggest surge in inflation for a generation has been definitively tamed.Falling energy prices and lower growth in food and services prices were the main factors behind the slowdown in the harmonised index of consumer prices, according to data published on Thursday by Eurostat, the EU’s statistics arm.Economists polled by Reuters had expected a more modest slowdown to 2.7 per cent. The drop in inflation has prompted investors to bring forward their bets of when the European Central Bank could start cutting its deposit rate to as early as next April.“Falling inflation and a stagnant economy could justify ECB cuts as soon as the first quarter of next year in our view,” said Matthew Landon, a strategist at JPMorgan Private Bank. “It is looking more and more likely that Lagarde and co could lead the developed world into the next cutting cycle.”The yield on Germany’s rate-sensitive two-year bonds fell 5.5 basis points to 2.79 per cent, its lowest level for almost six months. The euro extended its recent losses, falling 0.5 per cent against the US dollar to $1.092.However, ECB president Christine Lagarde warned this week it was “not the time to start declaring victory” in the push to bring inflation down to the bank’s 2 per cent target. The ECB chief added that wage pressures “remain strong” and had become “a key factor driving domestic inflation”. The ECB will meet on December 14, when economists expect it to cut its forecasts for growth and inflation. But Andrew Kenningham, an economist at consultancy Capital Economics, said rate-setters are “sure” to say it is still “far too early to cut rates”, especially as higher energy prices were likely to drive eurozone inflation back above 3 per cent in December.The slowdown in eurozone price growth from its peak of 10.6 per cent a year ago is expected to offer a further boost to consumers’ purchasing power, as wages rise faster than prices. However, the cost of living remains almost 20 per cent higher than before the inflation surge started three years ago.Fabio Panetta said in his first speech since leaving the ECB to become Italy’s central bank governor that “continued weakness in economic activity” could accelerate the fall in inflation and mean monetary policy needs to remain tight for only a “short” period.“We need to avoid unnecessary damage to economic activity and risks to financial stability, which would ultimately jeopardise price stability,” Panetta said. He also pushed back against calls by other ECB rate-setters to speed up the shrinkage of its balance sheet by stopping reinvestments in a €1.7tn pandemic-era portfolio of bonds earlier than planned.While Lagarde said on Monday that price pressures are expected to ease further, she added that “headline inflation may rise again slightly in the coming months, mainly owing to some base effects” — a reference to an expected levelling off of energy prices.The OECD also forecast on Wednesday that the ECB would not start cutting rates until 2025 because of persistent price pressures. Inflation within the eurozone still ranges widely, from 6.9 per cent in Slovakia to minus 0.7 per cent in Belgium for the year to November. Five of the 20 countries that share the euro have inflation below the ECB’s 2 per cent target, including Italy and the Netherlands.Energy prices in the bloc fell at close to a record rate of 11.5 per cent in October. Growth in the prices of food, alcohol and tobacco slowed to 6.9 per cent, decelerating from 7.4 per cent a month earlier and a peak of 15.5 per cent earlier this year. Core inflation, which excludes energy and food, slowed to 3.6 per cent, down from 4.2 per cent in October. This metric is closely watched by the ECB as a gauge of underlying price pressures. Unemployment remained at a record low of 6.5 per cent across the bloc in October, according to separate figures published on Thursday. However, the jobless rate increased in both Germany and Italy. More

ROME (Reuters) -The European Central Bank (ECB) must not cause “unnecessary damage” to the economy and financial stability through sustained high interest rates, new Bank of Italy governor Fabio Panetta said on Thursday.Panetta, a member of the ECB’s governing council, added that the round of monetary tightening which saw a streak of 10 straight rate rises until September, has not yet had its full impact and would continue to dampen demand in the future.In his first major speech since becoming head of the Italian central bank, Panetta warned that the euro zone economy would remain weak in the last three months of this year and that risks for the economy were tilted to the downside.”We need to avoid unnecessary damage to economic activity and risks to financial stability, which would ultimately jeopardise price stability,” Panetta said, speaking about interest rate policy.Before taking over at the Bank of Italy this month, Panetta sat for almost four years on the ECB’s Frankfurt-based board, where he was considered an interest rate dove.The current level of rates is consistent with bringing inflation down to the ECB’s 2% target, he said in Thursday’s speech.The ECB has lifted its key deposit rate to a record high 4% this year to curb price growth but has signalled steady policy for the next few quarters. Markets have started to position for the first rate cut, with a move seen as soon as April or June.INFLATION DECLINESEuro zone inflation tumbled more than expected this month, according to figures on Thursday that are likely to fuel bets on early spring rate cuts in defiance of the bank’s explicit guidance.Panetta called the data “a favourable development”.He indicated that a rapid decline in inflation could allow the ECB to curtail the current phase of relatively high rates.”Monetary conditions need to remain tight for as long as necessary to consolidate disinflation,” he said in his speech.”The duration of this phase will depend on development in macroeconomic variables; it could be short if continued weakness in economic activity accelerates the decline in inflation,” he added.He noted that the ECB’s monetary tightening had been tougher than usual because as well as raising interest rates it had also reduced its balance sheet, which crimps liquidity and contributes to a “contractionary effect on the economy.”Turning to Italy, he said the debt-to-GDP ratio, currently around 140%, needed to be reduced.”Debt has been a weight on the Italian economy’s shoulders for too many years,” he said. More

DUBAI (Reuters) -The incoming COP28 president, Sultan al-Jaber, opened this year’s U.N. climate summit on Thursday by urging countries and fossil fuel companies to work together to meet global climate goals.Governments are preparing for marathon negotiations on whether to agree, for the first time, to phase out the world’s use of CO2-emitting coal, oil and gas, the main source of warming emissions. Jaber, who is also the CEO of the United Arab Emirates’ national oil company ADNOC, aimed to strike a conciliatory tone following months of criticism over his appointment at the head of COP28. In his opening remarks, Jaber acknowledged that there were “strong views about the idea of including language on fossil fuels and renewables in the negotiated text. … I ask you to work together.””It is essential that no issue is left off the table. And yes, as I have been saying we must look for ways and ensure the inclusion of the role of fossil fuels.” He touted his country’s decision to “proactively engage” with fossil fuel companies, and noted that many national oil companies had adopted net-zero targets for 2050. “I am grateful that they have stepped up to join this game-changing journey,” Jaber said. “But, I must say, it is not enough, and I know that they can do much more.”DISASTER FUNDAs the U.N. climate conference kicked off, delegates were hoping to clinch an early victory on a disaster fund. The COP28 presidency published a proposal late Wednesday for countries to formally adopt the outlines of a new U.N. fund for poor countries being hit by climate disasters like extreme flooding or persistent drought.An early breakthrough on the damage fund – which poorer nations have demanded for years – could help grease the wheels for other compromises to be made during the two-week summit. Some diplomats said they hoped the draft deal for the fund would be approved quickly, with one delegate describing the possibility of objections at this point as “opening Pandora (OTC:PANDY)’s box”. The deal was crafted over many months of tough negotiations involving wealthy and developing countries. Establishing the fund allows rich countries to begin pledging money for it, and nations including Germany, Denmark and the Netherlands are expected to announce contributions over the next few days, European diplomats told Reuters.The European Union has pledged a “substantial” contribution, but wants countries whose economies have boomed in recent decades, like China and the UAE, to follow suit. “Everyone with the ability to pay should contribute,” said EU Climate Commissioner Wopke Hoekstra, who said he wanted to “broaden the donor base beyond the usual suspects, simply because that reflects the reality of 2023.”Adnan Amin, CEO of the COP28 summit, told Reuters this month the aim was to secure several hundred million U.S. dollars for the climate disaster fund during the event. He said he was “hopeful” that the UAE would make a contribution.”We cannot rest until this fund is adequately financed and starts to actually alleviate the burden of vulnerable communities,” said Samoa’s Ambassador to Europe, Pa’olelei Luteru, who is also the chairman of the Association of Small Island States (AOSIS) negotiating bloc.Another major task at the summit will be for countries to assess their progress in meeting global climate goals – chiefly the Paris Agreement goal of limiting global warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit).This process, known as the global stocktake, should yield a high-level plan telling countries what they need to do. More

NEW YORK (Reuters) – If scoring your dream job seems impossible, meet Priyanka Naik.Not long ago the tech executive was successfully helping to lead partnerships for social media site Twitter, now called X. Her dream, though, was to be a vegan chef.Now Naik is a Food Network champion and author of the cookbook, “The Modern Tiffin.” She appeared in a “Today” show Thanksgiving segment alongside celebrity chefs like Bobby Flay.”I always had a mission to make cooking an actual career that could pay my bills,” Naik said.Therein lies the challenge: turning a passion into a money-maker.Only one in 10 Americans are working in their dream job, a survey by the site JobSage showed. Seven in 10 said they are not on track to get there, and 53% said their dream job is unrealistic in this economy.Yet dreams can come true. You need a clear-eyed strategy to bring them out of the clouds, take concrete steps to get where you want, and make the numbers work to prosper.Just ask Adam Anderson. When he graduated in finance and accounting from George Mason University, he was told in one job interview he would have to make hundreds of cold calls a day.”That really scared me,” said Anderson, 34, of Springfield, Virginia.He turned away from a career in finance to his first love – comics. Anderson dabbled in them since he was a 10-year-old kid bidding on a comic with the first-ever appearance of Woody Woodpecker. Now he is one of the biggest comic-book sellers on eBay (NASDAQ:EBAY) with his business Blissard Comics, selling more than 200,000 items in the last 10 years.Here are four steps to create a career you love.WORK ON TWO PATHS SIMULTANEOUSLYEven if your ultimate goal is for your dream to be a full-time gig, you do not have to jump there right away. In fact, ditching your 9-to-5 employment is a risky proposition.That is why Naik worked on her cooking blog as a side passion for years, even while employed in tech.”I did them side-by-side for a long time,” she said. “When I started getting more media attention and traction, that’s when I realized that was I was doing as a chef was unique, and I could do more with it than just have a blog.”TREAT IT AS A BUSINESSThere are tax advantages when your passion becomes a self-sustaining business.”In 2016 I established an LLC, got it registered, created business accounts, started tracking expenses and got credit cards optimal for small business,” Naik said.Her advice? Put the infrastructure in place early because much of your business development costs can be expensed.For free business mentoring around the country, check out the organization SCORE. Other helpful resources include the federal Small Business Administration, which can help provide financing with its own loans.CHANGE YOUR BUSINESS MODELStarting any passion project involves a lot of trial-and-error.While Anderson started selling his own comics on eBay, he recently pivoted to a consignment model, also selling comics for others on their behalf.”This year sales are up 200% over last year, and a lot of that is thanks to my new business model – so be open to changing that over time,” he said.JUST STARTConditions will never be perfect to take the plunge, so do not wait for that to happen.Instead, just begin – even as simply as introducing yourself in an Instagram post, said Naik. It may work out as a standalone business, or not – in fact, the odds are it probably will not – but at least you will have tried.”You don’t want to look back on your life and think about all the things you could have done,” said Naik. “You want to say that you tried.”So even if you think you’re not ready, please just start – and it’s never too late to start.” More

The French government’s recent decision to partially roll back electricity price caps has contributed to the country’s more moderate inflation rates compared to other European nations. Service inflation currently stands at 2.7%, with manufactured goods inflation at 1.9%. Additionally, consumer spending in October fell significantly by 0.9%, with the food and energy sectors being the most affected.Despite these current economic headwinds, Finance Minister Bruno Le Maire maintains an optimistic outlook for France’s economy. He continues to project a GDP growth of 1.4% for the next year, with expectations of lower inflation and stable interest rates as the country heads into 2024-2025. However, according to Bloomberg, there is a possibility that inflation could rebound to around 4.5% in December.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

1. Futures point higher before final November sessionU.S. stock futures inched up as investors gear up for the last trading day in what has been a largely positive November for equities.By 04:56 ET (09:56 GMT), the Dow futures contract had added 144 points or 0.4%, S&P 500 futures rose by 6 points or 0.1%, and Nasdaq 100 futures gained 26 points or 0.2%.The main averages were mixed on Wednesday, but are still on pace to finish the month in the green.Recent data has buoyed hopes that inflation may be cooling in the U.S., fueling expectations that the Federal Reserve could soon begin to bring interest rates back down from over two-decade highs. Treasury yields, which move inversely to prices, have subsequently slipped, while stocks have jumped.Heading into the final session of November, the benchmark S&P 500 is up by 8.5% and the tech-heavy Nasdaq Composite has jumped by almost 11%, putting them both on track to post their best monthly performance since July 2022. The 30-stock Dow Jones Industrial Average has advanced by 7.2%, on course for its best month since October last year.2. PCE aheadTraders will likely be focusing on Thursday’s release of the October personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation.Economists are expecting a year-on-year figure of 3.0% for the month, which would mark a deceleration from 3.4% in September. On a monthly basis, the gauge is also seen slowing to 0.1%. The core reading stripping out volatile items like food and fuel is projected at 3.5% annually and 0.2% month-on-month.”Today’s session will […] be all about inflation,” analysts at ING said in a note to clients.The data could help determine how Fed officials will calibrate interest rates in the coming months. The central bank is widely tipped to leave rates at a range of 5.25% to 5.50% at its meeting next month, although some policymakers have hinted that a pivot away from this unprecedentedly tight monetary policy stance may be coming soon.Earlier this week, Fed Governor Christopher Waller, a typically hawkish voice, suggested that “we could start lowering the policy rate” if inflation continues to slow for “several more months.” The comments bolstered expectations that the Fed may slash rates as early as May next year.3. Microsoft to take board seat at OpenAIMicrosoft will take a spot on OpenAI’s board of directors, according to returning Chief Executive Officer Sam Altman.The tech giant — a key investor in OpenAI — will be a non-voting observer in the artificial intelligence start-up’s revamped board, which will at first include Chair Bret Taylor, former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, Altman said in a blog post on OpenAI’s website. It was not immediately clear who Microsoft would appoint to the board.D’Angelo is the only remaining member from OpenAI’s previous board, which was ousted earlier this month after its abrupt decision to remove Altman as CEO sparked ire among OpenAI employees and backers.Meanwhile, Altman, who has become known as one of the leading figures in the debate over the usage of AI, is coming back to the helm of the maker of the megapopular AI chatbot ChatGPT. He was initially offered a role at Microsoft after his sudden departure, as was co-founder Greg Brockman, who had quit in solidarity with Altman.”We clearly made the right choice to partner with Microsoft and I’m excited that our new board will include them as a non-voting observer,” Altman said.4. Chinese manufacturing activity contractsChinese manufacturing activity shrank for a second straight month in November, as the sector saw increased headwinds from slowing overseas demand.The official manufacturing purchasing managers’ index (PMI) read 49.4 in November, data from the National Bureau of Statistics showed. The figure was weaker than expectations of 49.7, and contracted from the prior month’s reading of 49.5.A reading below 50 indicates contraction, with China’s manufacturing PMI now having contracted for six out of the 11 months so far in 2023.China’s non-manufacturing PMI came in at 50.2 in November, missing projections of 51.1 and declining from 50.6 in October.The numbers point to weakness in the world’s second-largest economy despite liquidity injections by Beijing aimed at shoring up what has been a sluggish post-pandemic recovery. Investors are now clamoring for more targeted fiscal measures from Chinese authorities to boost growth.5. Oil prices rise as key OPEC+ meeting loomsOil prices climbed on Thursday as traders eyed a previously-postponed OPEC+ meeting and the weaker-than-expected Chinese factory activity data.By 04:56 ET, the U.S. crude futures traded 0.9% higher at $78.58 a barrel, while the Brent contract advanced by 0.9% to $83.62 per barrel.The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, meets later Thursday. Although the gathering was delayed from Sunday after disagreements between members over output targets, markets are still expecting news of additional production cuts.Gains have been limited by signs of slackening growth in China, the world’s top oil importer, while U.S. crude inventories recorded an unexpected 1.6 million-barrel build in the week to Nov. 24. More