Economy

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(Reuters) – Millions of Americans from the Plains to the East Coast faced the threat of blizzards, heavy snow, treacherous ice and freezing rain through Monday, the National Weather Service said on Saturday.Governors in Kentucky and Virginia declared states of emergency ahead of the winter storm.”The storm is still taking shape,” meteorologist Rich Bann of the NWS’s Weather Prediction Center said Saturday evening. “But this thing has multiple hazards from heavy snows in the Plains to significant icing covering roads farther south.”He added that more than 60 million people in the U.S. were affected by winter weather warnings, watches or advisories this weekend.A swath extending eastward from Nebraska and Kansas through Ohio, Indiana, southwestern Pennsylvania and northwestern Virginia could see from 1 inch (2.54 cm) to 1 foot (30 cm) of snow. Ice could knock out power lines and cause widespread outages.A wintry mess of freezing rain and ice will hit southern Missouri, Kentucky and Tennessee on Sunday, Bann said, likely making roads hazardous and downing power lines.”It’ll be nearly impossible to drive in some areas,” he said.The Kansas City International Airport in Missouri closed temporarily on Saturday afternoon due to rapid ice accumulation, officials said on social media.Bann said that the storm should move past the East Coast and into the Atlantic Ocean by late on Monday, but a new blast of Arctic air will bring frigid cold to the eastern two-thirds of the U.S. by the middle of next week. More

(Reuters) -Two Federal Reserve policymakers on Saturday said they feel the U.S. central bank’s job on taming inflation is not yet done, but also signaled they do not want to risk damaging the labor market as they try to finish that job.The remarks, from Governor Adriana Kugler and San Francisco Fed President Mary Daly, highlight the delicate balancing act facing U.S. central bankers this year as they look to slow their pace of rate-cutting. The Fed lowered short-term rates by a full percentage point last year, to a current range of 4.25%-4.50%.Inflation by the Fed’s preferred measure is well down from its mid-2022 peak of around 7%, registering 2.4% in November. Still that’s above the Fed’s 2% goal, and in December policymakers projected slower progress toward that goal than they had earlier anticipated. “We are fully aware that we are not there yet – no one is popping champagne anywhere,” Kugler said at the annual American Economic Association conference in San Francisco. “And at the same time … we want the unemployment rate to stay where it is” and not increase rapidly. In November, unemployment was 4.2%, consistent in both her and colleague Daly’s view with maximum employment, the Fed’s second goal alongside its price stability goal. “At this point, I would not want to see further slowing in the labor market — maybe gradually moving around in bumps and chunks on a given month, but certainly not additional slowing in the labor market,” said Daly, who was speaking on the same panel. The policymakers were not asked, nor did they volunteer their views, about the potential impact of incoming president Donald Trump’s economic policies, including tariffs and tax cuts, which some have speculated could fuel growth and reignite inflation.  Two Federal Reserve policymakers on Saturday said they feel the U.S. central bank’s job on taming inflation is not yet done, but also signaled they do not want to risk damaging the labor market as they try to finish that job.The remarks, from Governor Adriana Kugler and San Francisco Fed President Mary Daly, highlight the delicate balancing act facing U.S. central bankers this year as they look to slow their pace of rate-cutting. The Fed lowered short-term rates by a full percentage point last year, to a current range of 4.25%-4.50%.Inflation by the Fed’s preferred measure is well down from its mid-2022 peak of around 7%, registering 2.4% in November. Still that’s above the Fed’s 2% goal, and in December policymakers projected slower progress toward that goal than they had earlier anticipated. “We are fully aware that we are not there yet – no one is popping champagne anywhere,” Kugler said at the annual American Economic Association conference in San Francisco. “And at the same time … we want the unemployment rate to stay where it is” and not increase rapidly. In November, unemployment was 4.2%, consistent in both her and colleague Daly’s view with maximum employment, the Fed’s second goal alongside its price stability goal. “At this point, I would not want to see further slowing in the labor market — maybe gradually moving around in bumps and chunks on a given month, but certainly not additional slowing in the labor market,” said Daly, who was speaking on the same panel. The policymakers were not asked, nor did they volunteer their views, about the potential impact of incoming president Donald Trump’s economic policies, including tariffs and tax cuts, which some have speculated could fuel growth and reignite inflation.  Two Federal Reserve policymakers on Saturday said they feel the U.S. central bank’s job on taming inflation is not yet done, but also signaled they do not want to risk damaging the labor market as they try to finish that job.The remarks, from Governor Adriana Kugler and San Francisco Fed President Mary Daly, highlight the delicate balancing act facing U.S. central bankers this year as they look to slow their pace of rate-cutting. The Fed lowered short-term rates by a full percentage point last year, to a current range of 4.25%-4.50%.Inflation by the Fed’s preferred measure is well down from its mid-2022 peak of around 7%, registering 2.4% in November. Still that’s above the Fed’s 2% goal, and in December policymakers projected slower progress toward that goal than they had earlier anticipated. “We are fully aware that we are not there yet – no one is popping champagne anywhere,” Kugler said at the annual American Economic Association conference in San Francisco. “And at the same time … we want the unemployment rate to stay where it is” and not increase rapidly. In November, unemployment was 4.2%, consistent in both her and colleague Daly’s view with maximum employment, the Fed’s second goal alongside its price stability goal. “At this point, I would not want to see further slowing in the labor market — maybe gradually moving around in bumps and chunks on a given month, but certainly not additional slowing in the labor market,” said Daly, who was speaking on the same panel. The policymakers were not asked, nor did they volunteer their views, about the potential impact of incoming president Donald Trump’s economic policies, including tariffs and tax cuts, which some have speculated could fuel growth and reignite inflation.   More

VIENNA (Reuters) -Talks between Austria’s two main centrist parties on forming a coalition government without the far-right Freedom Party (FPO) collapsed on Saturday, prompting conservative Chancellor Karl Nehammer to announce he would step down.A day earlier a third party, the liberal Neos, walked away from the talks, blaming the other parties for failing to take the bold and decisive action it said it had called for.”I will stand down as chancellor and as leader of the People’s Party in the coming days and enable an orderly transition,” Nehammer said in a video statement on X, after talks with the Social Democrats (SPO).The coalition talks’ collapse three months after September’s parliamentary election underscores the growing difficulty of forming stable governments in European countries, such as Germany and France, where the far right is on the rise but many parties are loath to partner with them.The eurosceptic, Russia-friendly FPO won that election with roughly 29% of the vote. It would have needed a coalition partner to govern but Nehammer ruled out governing with FPO leader Herbert Kickl, meaning no potential coalition partner for the FPO was forthcoming.Austrian President Alexander Van der Bellen, a former leader of the Greens, therefore tasked Nehammer with forming a government. Now that Nehammer is stepping down, the two most likely options are either that Kickl is tasked with forming a government or a snap election is called.Nehammer has described Kickl is too much of a conspiracy theorist to lead a government yet has said much of the FPO is trustworthy. Kickl, however, is not an outlier within his party, which overlaps with Nehammer’s party on issues such as immigration.The leadership of Nehammer’s People’s Party (OVP) was due to meet on Sunday morning to discuss who should succeed him. Whoever takes over is likely to be more open to a coalition with the FPO, which a large portion of the OVP favours.The two parties governed in coalition under OVP leadership from 2017 until 2019, when the FPO’s then-leader was felled by a video-sting scandal and that coalition collapsed.FAR RIGHT RISINGSupport for the FPO has grown since the last election. It holds a lead of more than 10 points over the People’s Party (OVP) and the SPO, opinion polls show.That poses a dilemma for President Van der Bellen, who has expressed reservations about Kickl becoming chancellor.SPO leader Andreas Babler confirmed at a news conference that the talks had collapsed, blaming Nehammer’s party for seeking to skimp on pensions and salaries for teachers and police officers. Nehammer blamed the SPO for insisting on taxing wealth and inheritance, the SPO’s flagship campaign policy.”We know what threatens to happen now. An FPO-OVP government with a right-wing extremist chancellor that will endanger our democracy on many points,” Babler said.Kickl, who has consistently railed against the coalition talks and Van der Bellen’s decision not to task him with forming a government, again likened those talks to the three-party “traffic-light coalition” in Germany which recently collapsed.”Nehammer, Babler and Van der Bellen have also failed. They were the architects of the loser traffic light (coalition) and are now confronted with the ruins of their Kickl prevention strategy,” Kickl said in a statement.”Alexander Van der Bellen bears a significant share of the responsibility for the chaos that has arisen and the time that has been lost … After today’s events, he is under pressure to act.” More

The government is “focussing on cost-saving measures” to tackle the deficit, Paul Chan told residents on a programme on public broadcaster RTHK where he was gathering public feedback ahead of the upcoming budget. “Although we need to move forward with public works projects… we have to prioritise developments according to their urgency,” he said.The growth rate of economy in the first three quarters of 2024 was not as strong as expected due to high interest rates and external challenges, Chan said.Hong Kong’s economy is expected to grow 2.5% in 2024, he wrote in a blog post in December. That followed a 1.8% third quarter growth rate, which fell below expectations. The estimated deficit for the year ending in March is about double the previous forecast of HK$48.1 billion in the budget presented in February.Chan attributed the deficit mainly to a sharp decline in land sales revenue. Boosting the economy amid a fiscal deficit would be Hong Kong’s “biggest challenge”, he said. ($1 = 7.7779 Hong Kong dollars) More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

NEW YORK (Reuters) – The stock market faces its first major test of the year in the coming week, with investors counting on the U.S. jobs report to show a stable but not overheated economy that underpins expectations for equity gains in 2025.Stocks wobbled at the end of December and the start of January, cooling off after a torrid run. The benchmark S&P 500 closed 2024 with a 23% rise and posted its biggest two-year gain since 1997-1998.Prospects for a third straight standout year hinge in part on the strength of the economy, with labor market data among the most important reads into the economy’s health. The data could also help clarify the Federal Reserve’s interest rate plans after the central bank last month rattled markets by reducing its projected rate cuts for 2025.”Investors are going to want to see confirmation that labor trends remain solid, which means the economic outlook probably remains firm,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE:AMP).”Any kind of data that suggests things are weakening a little bit more than expected I think could create volatility,” Saglimbene said.Investors enter the year generally upbeat about the U.S. economy. A Natixis Investment Managers survey conducted at the end of last year found 73% of institutional investors said the U.S. will avoid a recession in 2025. Labor market data has been volatile in recent months following aerospace industry strikes and hurricanes. November data showed growth of 227,000 jobs that rebounded from a tepid rise in October.The three-month average gain of 138,000 “suggests that hiring continues to slow gradually,” Capital Economics analysts said in a note.The report for December, due out on Jan 10, is expected to show growth of 150,000 jobs with the unemployment rate at 4.2%, according to a Reuters poll of economists.Following the prior two reports, “this is going to be probably the first clean read of what is the underlying trend in the labor market,” said Angelo Kourkafas, senior investment strategist at Edward Jones.Investors are also wary of the jobs report revealing an overly strong economy, with a revival of inflation seen as one of the key risks to markets early in the year.The Fed at its December meeting lifted its forecast for expected inflation in 2025, paving the way for higher interest rates than it previously forecast.After lowering its benchmark rate at three straight meetings, the Fed is expected to pause its easing cycle when it next meets at the end of January before making further cuts of about 50 basis points over the rest of the year.For the jobs report, the market is “looking for that Goldilocks number — neither too hot, nor too cold,” Kourkafas said.OTHER EMPLOYMENT DATAWhile the payrolls data will be the most closely followed release, the coming week brings other market-sensitive employment figures, as well as reports on factory orders and the services sector.Despite a strong 2024, stocks were weak in December, with the S&P 500 falling 2.5%. December had only five days with more stocks in the index gaining as opposed to declining, the lowest share of such relatively positive days for any month going back to 1990, according to Bespoke Investment Group.Following the end-of-year holiday period, “next week probably ushers in more robust volumes, which would certainly be a better indication of directionality for the market,” said Art Hogan, chief market strategist at B. Riley Wealth.”A solid jobs report would certainly help turn things around in this market that has otherwise been pretty soft to end the year and start the new year,” Hogan said.Wall St Week Ahead runs every Friday.  For the daily stock market report, please click [.N]   More