Economy

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.There’s a worrying trend beneath the latest employment statistics — the job-finding rate has cratered over the past two months. An important note here: The job-finding rate is a bottom-up statistic, calculated by estimating which types of workers got or lost jobs in a given month, going by industry and demographic microdata from the BLS’s Household Survey. Our description might oversimplify the methods used in the 2005 paper where UChicago’s Robert Shimer developed this idea, but it’s the week before Christmas and the baby still isn’t sleeping through the night. Also, somebody at Goldman Sachs has done the statistical work for us. So on we go! Their chart of the aggregated data doesn’t look promising: Yikes! That’s the biggest two-month decline since Covid-19. The bank softens the blow by providing a few reasons to avoid panic. One is the “Mass Deportations Now” thing: First, there was a large decline in the job-finding rate of foreign-born workers, which fell roughly 10pp over the last couple of months and accounted for about 2pp of the overall decline in the job-finding rate. We suspect that heightened uncertainty over immigration policy under the incoming Trump administration may have made employers more reluctant to hire these workers. That said, these breakdowns are volatile at a monthly frequency and previous swings in the foreign-born series have sometimes reversed in later months.The chart of this shows some volatility, but it’s tough to find comparable declines outside of Covid times: Also, it’s not like it was a one-to-one trade-off where the job-finding rate soared for US-born workers. But hey, let’s move on to the next reason Goldman provides to maybe not worry. That’s the weird timing of the US’s Thanksgiving holiday this year. Because the holiday came at the very end of November, it’s possible that retail hiring for Black Friday didn’t start until later in the month, which could have suppressed the job-finding rate for workers in the “trade and transportation” industries. (It’s cool that the “trade and transportation” industries include jobs where you fold shirts as a teenager.) Here’s the chart: GS points out that the late holiday dragged down the job-creation numbers by 28,000 for November. It also says that strikes could have affected the transportation industry job-finding figures, while acknowledging that “striking workers are not supposed to be counted as unemployed in the household survey”. Hm. Anyway, as the final mitigating factor, Goldman’s economist Manuel Abecasis points out that more Americans are retiring instead of finding jobs: So older workers losing their jobs and simply choosing to retire instead of continuing to job-seek is supposed to be a . . . good sign? Well, not really: These three factors explain around 5pp of the 7pp decline in the job-finding rate since September. As a result, our analysis suggests that much of the recent decline in the job-finding rate can be explained by special factors unrelated to cyclical weakness in labor demand. Even so, the steady decline in the job-finding rate over the last year is consistent with a labor market that has loosened significantly in 2024 and has yet to stabilize.And all of this assumes these three factors aren’t actually related to the broader economy. But it’ll be January before we learn how much the late Black Friday mattered, and the Fed’s probably going to cut today, so long live the FIWB rally. Further reading: — Stocks are expensive and nobody cares More

WASHINGTON (Reuters) -The Federal Reserve is expected to lower borrowing costs on Wednesday in what some observers are calling a “hawkish cut” set to be delivered alongside policymakers’ updated interest rate outlooks and economic forecasts covering the first months of the incoming Trump administration.The anticipated quarter-percentage-point move would lower the U.S. central bank’s benchmark policy rate to the 4.25%-4.50% range, a full percentage point below where it stood in September when it began easing the tight monetary policy used to counter a surge in inflation that began in 2021.How much further and how fast rates will fall next year remains increasingly uncertain with inflation still lodged above the Fed’s 2% target, the economy growing faster than expected, and the prospect that President-elect Donald Trump’s tariff, tax and immigration policies could change the economic landscape in unpredictable ways once he takes office in January.In their most recent set of quarterly projections in September, Fed officials anticipated cutting the benchmark rate by another full percentage point to put it at around 3.4% by the end of 2025.Between data showing inflation stalled above the 2% target and Trump’s victory in the Nov. 5 presidential election, investors now see the Fed perhaps cutting the benchmark rate by only half a percentage point next year – and they will be studying the projections and Fed Chair Jerome Powell’s remarks in a post-meeting press conference closely to see if policymakers are also becoming more cautious about further rate reductions.”While the Fed will remain keen on projecting additional easing for 2025, guidance regarding the pace of rate cuts will likely be more cautious going forward,” economists with TD Securities wrote ahead of this week’s two-day meeting.The Fed will release its policy statement and updated economic projections at 2 p.m. EST (1900 GMT), with Powell scheduled to begin speaking half an hour later. Data, including the release on Tuesday of a strong retail sales report for November, have done little to alter the Fed’s description after its last policy meeting of an economy growing at a “solid pace” with low unemployment and inflation that, while falling, “remains somewhat elevated.” Between a new policy statement, the projections and Powell’s press conference, the net result is likely to be “a hawkish cut” with a slower pace of reductions to come, Diane Swonk, chief economist at KPMG, wrote ahead of this week’s meeting.”Debate will be heated,” she said. “The economy remains stronger than participants at the meeting thought it would be when they started cutting in September, while improvements in inflation appear to have stalled … The Fed is going to want time to pause to see where we are and how policy may shift after the president-elect is sworn in.”Trump takes office on Jan. 20, and the Fed meets just over a week later on Jan. 28-29. A total of 58 of 99 economists in a recent Reuters poll said they expected the U.S. central bank to skip cutting rates at that meeting as policymakers take stock of how the economy is evolving. 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

The ministry cites prolonged weakness in Sweden’s economy, the largest in the Nordic region, and heightened global uncertainty as the reasons for this revision.The country’s Gross Domestic Product (GDP) is now anticipated to grow 2.2% in the next year on a calendar-adjusted basis. This is a decrease from the previous forecast of 2.8% made in September, according to a statement released on the ministry’s website on Wednesday.The ministry also expects economic expansion to pick up speed in 2026, reaching a growth rate of 2.7%. However, this is still a decline from the earlier prediction of 2.9% growth.This revision follows a series of mixed data regarding the future of Sweden’s economy, which relies heavily on exports and has been nearly stagnant for approximately three years. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The new funds will be utilized to recruit more engineers to further the company’s mission.The company, chaired by former Google chief Eric Schmidt, was established less than three years ago as a spin-off from Alphabet (NASDAQ:GOOGL) Inc. SandboxAQ has established partnerships with corporate giants such as Accenture (NYSE:ACN) and Deloitte to expand its customer base.Investment firm Alger and Yann LeCun, a well-known name in the AI field, are among the new investors participating in the latest funding round. Existing backers also include T. Rowe Price, Breyer Capital, Thomas Tull’s USIT, and Schmidt himself, as announced by the company in a statement on Wednesday.SandboxAQ is carving out a niche in the rapidly growing field of AI innovation, a top priority for tech venture capital. The company sets itself apart by adopting different methods from prevailing approaches, such as those used by OpenAI. Currently, SandboxAQ runs quantum physics algorithms on graphics processing units, but plans to transition to more advanced machines in the future.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

NEW YORK (Reuters) – As you gear up for last-minute holiday shopping at any big box retailer, there is a good chance you will be offered a store credit card with a nice discount on today’s purchase and even a 0% interest rate for an introductory period.What’s not to like, right?Alas, some store credit offers are tripwired with something called ‘deferred interest,’ which can be a nasty little debt bomb.So how does it work? “If you don’t pay off the balance in full by the end of the promotional period, you’ll owe interest on the entire purchase amount from the original date,” explains Melissa Caro, a New York City financial planner and founder of the platform My Retirement Network.That means you could end up paying 27.5 times more compared to general-purpose credit cards, which do not use deferred interest, according to a new study by financial information site WalletHub.The site reviewed store cards offering 0% introductory rates and found 85% of them are using deferred interest.“Deferred interest is the most misleading thing that currently exists in the credit-card market,” says Odysseas Papadimitriou, WalletHub’s founder and CEO.Of course, consumers rarely read the fine print of those credit-card agreements, and the person at the checkout counter likely is not going to know about financing details, either. In fact, 61% of people do not even know how deferred interest works, according to the WalletHub survey.The other problem here: Interest rates on store cards are typically extremely high. The current average is over 33%.So how can consumers protect themselves from a high-interest surprise? Here are five factors to consider. NOT ALL STORE CARDS ARE ALIKESome store cards will not whack you with deferred interest. Among those, according to the WalletHub survey: The Gap, Williams Sonoma, Neiman Marcus, Nordstrom (NYSE:JWN), Costco (NASDAQ:COST), Target (NYSE:TGT) and Pottery Barn.Others may not right now but reserve the right to do so in the future. So ask about deferred interest before you sign on the dotted line.Here is one potential clue: 95% of all deferred interest credit cards are issued by just three banks – Synchrony, Citi, and Comerica (NYSE:CMA), WalletHub says.OPT FOR NON-STORE CREDIT CARDS If it is the 0% introductory offer that is appealing to you, fine – just get it from somewhere else, like your own bank, instead of a retailer-branded one.“The simplest advice we have is, give preference to a regular general-purpose credit card with a 0% offer on it,” said Papadimitriou.Not only will it not come with deferred interest, but the eventual interest rate will likely be lower as well. Average interest rates for general-purpose credit cards are currently 20.37%, according to the latest data from financial information site Bankrate.BE REALISTIC ABOUT WHAT YOU CAN AFFORDAs of November, nearly half of Americans were still paying off holiday debt from last year, according to WalletHub.So if you realistically do not see yourself paying off a purchase before the introductory period expires – then do the hard thing, and do not buy the item in the first place.USE STORE CARDS FOR REWARDS, NOT FOR FINANCINGNot all store cards are bad, and there may be good reasons to use them. For instance, maybe the retailer has an excellent rewards program, or offers significant discounts on merchandise whenever you pull it out.Or maybe you are using a store card to build your credit record, which might be incomplete or spotty. Fine – but then try to pay off balances right away.“Store cards are great credit-building tools and rewards tools, but horrible financing tools,” says Papadimitriou.AUTOMATE YOUR PAYMENTSIf you leave credit card payments up to Future You … well, Future You may not have enough cash. And if that happens on a deferred-interest card, watch out.“The introductory rate can benefit the card user if they are alert,” advises Erika Safran (EPA:SAF), founder of Safran Wealth Advisors in New York City.What is the best way to handle the typical offer of a 12-month, no-interest new card? “Divide the expense by 12, and schedule automatic monthly payments from your bank account to credit card,” Safran says. “You now have a zero-interest 12-month loan.” More

The SREP process provides an overall assessment of the challenges that significant lenders face, resulting in solvency requirements and other supervisory measures they are expected to comply with for the year ahead.Here are the SREP requirements for 2025 disclosed so far by the Italian banks:BANK 2025 SREP CET1 2024 SREP CET1 CET1 RATIO REQUIREMENT REQUIREMENT END-SEPT BPER BANCA 8.93% 8.54% 15.8% CREDEM 8.01% 7.60% 15.8% FINECOBANK 8.27% 8.19% 27.3% INTESA 9.89% 9.32% 13.9% SANPAOLO BANCA POPOLARE 8.93% 8.57% 16.3% DI SONDRIO BANCO BPM 9.18% 9.07% 15.5% UNICREDIT 10.27% 10.03% 16.1% MONTE DEI 8.78% 8.56% 18.1% PASCHI MEDIOBANCA 9.03% 8.15% 15.2% More