Economy

(Reuters) -Zoom Video Communications raised its annual revenue forecast on Wednesday, driven by strong demand for its AI-powered collaboration tools deployed in hybrid work models, and said Kelly Steckelberg would step down as its CFO.Shares of the video-conferencing provider were trading 3% higher after the bell.Zoom (NASDAQ:ZM) has been doubling down on efforts to integrate artificial intelligence into its products and expand its range of services and leverage the growing trend of hybrid work.Zoom Contact Center, the company’s AI-powered, omnichannel platform that provides businesses personalized responses for their customers, secured several high-profile clients, including its largest single-order deal to date in the second quarter.Zoom said large accounts, with customers contributing more than $100,000 in trailing 12-month revenue, increased 7.1%. Online average monthly churn also reached its lowest ever rate.This suggests that Zoom is “doing more than simply holding its ground. They’re reinforcing their foundation and making sure they’re prepared for the long haul,” said Jeremy Goldman, senior director of briefings at Emarketer.”The company needs to continue innovating and expanding its product offerings … Zoom’s challenge will be to sustain this momentum by proving they’re more than just a one-hit pandemic wonder and by continuing to deliver the kind of growth that can keep investors excited about its long-term prospects,” Goldman said.Zoom said it has begun a search for Steckelberg’s successor. Her last day of work with the company will be the day after it announces earnings for the quarter ending Oct. 31.Steckelberg has been Zoom’s CFO since 2017 and led the company through its successful IPO in 2019.The company expects fiscal 2025 revenue to be between $4.63 billion and $4.64 billion, compared with the $4.61 billion and $4.62 billion forecast earlier.Its second-quarter revenue of $1.16 billion beat LSEG estimates of $1.15 billion.The company earned $1.39 per share on an adjusted basis, also topping analysts’ estimate of $1.21. More

The company said revenue from the AI and speech technology services that its Nuance unit offers would now come under its productivity business – home to the Office suite of apps – instead of the intelligent cloud division. The rejig will allow Microsoft (NASDAQ:MSFT) to align the reporting structure with how its businesses are managed, it said. As a result, the company restated revenue growth at its divisions for the last fiscal year and revised its forecast for July-September quarter. Big tech companies, including Microsoft and Google (NASDAQ:GOOGL), are facing investor pressure to show that the billions of dollars they have been investing in AI infrastructure would pay off. Microsoft is one of the few big companies that break out AI contributions in their quarterly earnings, as most firms are yet to see a big boost from AI investments.The Windows maker reported last month AI provided a bigger boost to Azure in the June quarter, even as overall business slowed. Microsoft expects Azure’s growth to accelerate in the second half of fiscal 2025.The company expects intelligent cloud revenue to be between $23.80 billion and $24.10 billion in the first quarter, compared with its prior expectations of $28.6 billion and $28.9 billion.Quarterly revenue at its personal computing segment is expected between $12.25 billion and $12.65 billion, compared with its earlier view of $14.9 billion and $15.3 billion, after the company moved some units from the business to the productivity division.Productivity and business processes revenue is expected to be between $27.75 billion and $28.05 billion, compared with $20.3 billion and $20.6 billion previously. More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning. Today we’re covering: Beijing’s retaliation against Brussels’ EV tariffs Vietnam’s incentives for foreign investorsMushroom’s sculptural, surreal and slightly creepy beautyBut we start with a scoop: PwC China has told clients it expects Chinese authorities to hit it with a six-month business ban that will start as early as September, as part of punishment over its audit of collapsed property developer Evergrande.The action against PwC comes after China’s securities regulator in March said Evergrande had inflated its mainland revenues by almost $80bn in the two years before the developer defaulted on its debts in 2021, despite PwC’s China unit giving the accounts a clean bill of health.The business ban, which could come with a large fine, would be the toughest ever action by Chinese regulators against a Big Four firm as Beijing steps up scrutiny over the role played by auditors in financial scandals.Here’s how the ban and fine would disrupt operations at the firm.Thanks for reading FirstFT. Do you have any questions about PwC China or Beijing’s crisis-hit property sector? Email us at [email protected] or hit “reply” and remember to include your name and where you’re writing from. We’ll answer as many as possible in a special weekend edition of the newsletter.Here’s what else I’m keeping tabs on today:Interest rate announcements: South Korea and Turkey are expected to hold interest rates steady when they meet today. Jackson Hole Economic Symposium: US policymakers will gather for their annual meeting in Wyoming amid growing concerns about the health of the world’s largest economy. Results: Corporate earnings are expected from Australia’s Sonic Healthcare, Taiwan’s Fubon Financial Holding Co., and China’s Ping An Insurance Group, among others. Five more top stories1. China has launched an anti-dumping investigation into imported European dairy products in the latest escalation of its trade dispute with the EU. The move is Beijing’s strongest retaliation yet against Brussels’ tariffs on Chinese electric vehicle imports.2. Five bodies have been found by divers searching the wreckage of Mike Lynch’s superyacht Bayesian, which sank off the coast of Sicily. Four bodies were pulled from the sunken yacht on Wednesday, a fifth body was found but not yet removed while a sixth person remains missing. After two days of struggling to find a way through debris, divers gained access to Bayesian’s cabins with an underwater drone. 3. Sephora is cutting back its workforce in China as one of LVMH’s biggest revenue generators struggles to gain traction in the tough mainland beauty market. The cuts represent less than 3 per cent of Sephora’s China-based workforce, but they point to pressure in the country’s highly competitive and price-sensitive beauty market.4. Walmart sold its entire stake in Chinese ecommerce giant JD.com for $3.6bn, as the world’s largest retailer focuses on expanding its own brands in the country. The US retailer disclosed in a filing to the US Securities and Exchange Commission that it had completely disposed of its nearly 10 per cent holding in the ecommerce company. Ryan McMorrow has the full story here.5. Federal Reserve officials last month signalled their readiness to start cutting interest rates at their September meeting in the face of slowing job growth and easing inflation. Read more from the minutes of their July meeting.The Big Read© FT montage/Grammar Productions/Alexandre BertrandChina has a large footprint in Africa thanks to its $1tn Belt and Road Initiative, which offers to finance and build infrastructure in mostly poorer countries and gives it an advantage in the race for control of critical minerals. But a $10bn US-backed railway illustrates Washington’s desire to compete with Beijing in Africa. We’re also reading . . . Chart of the dayWestern investors have piled back into gold as they position for US interest rate cuts this year, helping to drive prices to record highs this week. Prices reached $2,531 per troy ounce in trading yesterday, taking gold’s gains for the year to more than a fifth, boosted by purchases by institutional investors and bullish hedge fund bets.Take a break from the news Have you ever thought out growing mushrooms for their aesthetic appeal? These pink oyster mushrooms might make you consider it. Additional contributions from Tee Zhuo and Melody Abike Adebisi More

(Reuters) – A look at the day ahead in Asian markets.The Bank of Korea’s interest rate decision and guidance take center stage in Asia on Thursday, as investors digest revised U.S. jobs data and Fed minutes on Wednesday that fanned hopes that the looming U.S. rate-cutting cycle will be a bold one.The calendar in Asia also includes purchasing managers index data from Japan, Australia and India, inflation from Malaysia and some company earnings from China and Hong Kong, namely Baidu (NASDAQ:BIDU)’s second quarter results. China’s largest search engine provider is expected to see a decline in revenue for the first time since the fourth quarter of 2022 as ad sales drop. Investors will look for comments on ad market trends and updates on its key AI offering Ernie Bot.The broader trading and investment picture, however, will be dominated by the latest shift in the U.S. rate outlook, as attention turns toward Fed Chair Jerome Powell’s Jackson Hole speech on Friday. Lower Treasury yields and a falling dollar should help ease financial conditions for emerging markets and encourage risk-taking in Asia on Thursday, providing the slump in yields isn’t reflecting heightened fears of recession.That doesn’t appear to be the case – Wall Street rose on Wednesday and the S&P 500 is now less than 1% from its all-time peak – although the fall in Treasury yields will bear close attention. The dollar hit another low for the year against a basket of G10 currencies on Wednesday and the MSCI index of emerging market currencies hugged its record high. China’s yuan was fixed at a one-month high on Wednesday, while the Japanese yen touched a two-week high through 145.00 per dollar.The dollar is suffering across the board from falling U.S. yields.After the Bank of Thailand, Bank Indonesia and People’s Bank of China all kept their benchmark lending rates unchanged this week, the spotlight falls on the Bank of Korea on Thursday.On Wednesday the Thai central bank struck a neutral tone in its statement, while Bank Indonesia Governor Perry Warjiyo said supporting the rupiah helps bring down the cost of imports, especially food prices. The BOK is also expected to stand pat on rates and leave its benchmark rate at 3.50% where it has been since January last year. Analysts expect the BOK to wait for the Fed to begin cutting rates before easing policy in the fourth quarter.With inflation rising 2.6% in July from an 11-month low of 2.4% in June, moving further away from the central bank’s 2% target, the BOK may need to see prices stabilizing before it starts to ease policy.    Here are key developments that could provide more direction to Asian markets on Thursday:- South Korea interest rate decision- Japan, Australia, India manufacturing & services PMIs (August)- Malaysia inflation (July) More

A report was delayed on the Bureau of Labor Statistics website, but some investors got it in the meantime, raising new questions about agency practices.For more than half an hour on Wednesday morning, economists and investors were stuck repeatedly refreshing their browsers, looking for a delayed report on the U.S. job market from a government website.Not everyone had to wait that long.A number of Wall Street investment firms obtained details about the report — which showed a large downward revision to job growth in 2023 and early 2024 — at least 15 minutes before the information was posted on the Bureau of Labor Statistics website. That head start could, at least in theory, have given in-the-know investors an opportunity to profit on the information before the public at large.It isn’t clear how many people got early access to the data, or whether anyone actually traded on it. Markets seemed to react little to the revision in jobs data either before or after the general release. But the episode was the latest in a series of incidents in which the agency provided information to investors that wasn’t available to the general public.In February, an employee of the labor bureau sent information about housing inflation — at the time, an issue of intense interest to many investors — to a group of “super users” that included a number of hedge funds. The information turned out to be inaccurate, but even if that had not been the case, agency leaders said, it was inappropriate to share information selectively.Then, in May, the agency said it had inadvertently posted data on the Consumer Price Index — one of the highest-profile monthly economic reports — 30 minutes before the scheduled release time. The files in question are closely monitored by Wall Street firms but not by less sophisticated users.Taken together, the incidents raise concerns about the agency’s handling of sensitive information, said Julia Coronado, founder of MacroPolicy Perspectives, a research firm with Wall Street clients.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Investing.com – The “vast majority” of Federal Reserve policymakers signaled that it may be appropriate to begin cutting rates next month should the recent progress on inflation continue. 
“The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.,” the of Fed’s July meeting showed on Wednesday.
About 63% of traders expect the Fed to deliver a rate cut next month, according to Investing.com’s  
The central bank’s monetary policy has been in data dependent mode since it delivered its tenth rate hike in May last year. 
The decision to keep rates in the current rage for more than year, however, has seen monetary policy move into more restrictive policy as the pace of inflation continued to slow. 
A “few participants” backed this view, according to minutes, and noted that “ongoing disinflation, with no change in the nominal target range for the policy rate, by itself results in a tightening in monetary policy.”
Deflation set to continue 
Recent economic data, however, including a string of more convincing inflation data that point to ongoing deflation has given members more confidence that inflation is on a path toward the 2% goal. 
The most recent core consumption personal expenditure, or CPE, the central bank’s preferred inflation gauge, came it at 2.6% in the 12 months through June, unchanged from the prior month, though well below the peak of 5.4% seen in February 2022. 
“Almost all participants observed that the factors that had contributed to recent disinflation would likely continue to put downward pressure on inflation in coming months,” the Fed minutes showed.
The data-dependent approach will likely remain a priority for the Fed even as it moves toward a rate cuts. Most fed members “emphasized” the need to outline that Fed policy decisions would be “conditional evolution of the economy rather than being on a preset path.”
Fed now keeping a closer eye on labor market as payroll gains possibly ‘overstated’
The progress on inflation has shifted the Fed’s focus, however, to the labor market, where a mixed string of recent data have sparked investor jitters. 
“Participants agreed that these and other indicators of labor market conditions merited close monitoring,” according to the minutes. 
The July nonfarm payrolls increased by only 114,000, missing economist expectations for 179,000, while the unemployment unexpectedly tick up to 4.3% from 4.1%. 
The uptick in unemployment rate sparked worries about the state of the U.S. economy, leading to a major selloff in risk assets and calls for aggressive Federal Reserve rate cuts at upcoming meetings. Since then, however, a string of data including weekly jobless claims have helped to calm investor worries, tempering bets on a jumbo-sized Fed cuts. 
Fed members downplayed the the weaker payrolls data, the minutes showed, as  “many participants noted that reported payroll gains might be overstated.”
“Several” members, the minutes added, believe that the breakeven rate employment growth, or the number of payrolls gains needed to keep the unemployment rate constant in a flat labor force participation rate may be lower.  
On Wednesday data supported this notion that payrolls gains may have been overstated after Bureau of Labor Statistics significantly revised down the number of jobs created in the 12 months through March. 
The Bureau of Labor Statistics revised down March 2024’s employment gains by 818,000 positions earlier in the session, as part of the agency’s annual benchmark review of payroll data.
While the minutes were “bit stale” given economic and market developments since the decision, Evercore ISI said Wednesday that they were “a bit less hawkish-stale than we feared they might be, and confirm the debate was already swinging firmly in favor of cuts.” More

The Labor Department issued revised figures for the 12 months through March that point to greater economic fragility.The U.S. economy added far fewer jobs in 2023 and early 2024 than previously reported, a sign that cracks in the labor market are more severe — and began forming earlier — than initially believed.On Wednesday, the Labor Department said monthly payroll figures overstated job growth by roughly 818,000 in the 12 months that ended in March. That suggests employers added about 174,000 jobs per month during that period, down from the previously reported pace of about 242,000 jobs — a downward revision of about 28 percent.The revisions, which are preliminary, are part of an annual process in which monthly estimates, based on surveys, are reconciled with more accurate but less timely records from state unemployment offices. The new figures, once they’re made final, will be incorporated into official government employment statistics early next year.The updated numbers are the latest sign of vulnerability in the job market, which until recently had appeared rock solid despite months of high interest rates and economists’ warnings of an impending recession. More recent data, which wasn’t affected by the revisions, suggests job growth slowed further in the spring and summer, and the unemployment rate, though still relatively low at 4.3 percent, has been gradually rising.Federal Reserve officials are paying close attention to the signs of erosion as they weigh when and how much to begin lowering interest rates. In a speech in Alaska on Tuesday, Michelle W. Bowman, a Fed governor, highlighted “risks that the labor market has not been as strong as the payroll data have been indicating,” although she also said the increase in the unemployment rate could be overstating the extent of the slowdown.This year’s revision was unusually large. Over the previous decade, the annual updates had added or subtracted an average of about 173,000 jobs. Still, substantial updates are hardly without precedent. Job growth for the year ending March 2019, for example, was revised down by 489,000, or about 20 percent.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported
The revision to the total payrolls level of -0.5% is the largest since 2009.
At the sector level, the biggest downward revision came in professional and business services, where job growth was 358,000 less than initially reported.

The U.S. economy created 818,000 fewer jobs than originally reported in the 12-month period through March 2024, the Labor Department reported Wednesday.
As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported 2.9 million from April 2023 through March of this year.

The revision to the total payrolls level of -0.5% is the largest since 2009. The numbers are routinely revised each month, but the BLS does a broader revision each year when it gets the results of the Quarterly Census of Employment and Wages.
Wall Street had been waiting for the revisions numbers, with many economists expecting a sizeable reduction in the originally reported figures. The new numbers, if they hold up when the BLS issues its final revisions in February, imply monthly job gains of 174,000 during the period, as opposed to the initial indication of 242,000.
Even with the revisions, job creation during the period stood at more than 2 million, but the report could be seen as an indication that the labor market is not as strong as the previous BLS reporting had made it out to be. That in turn could provide further impetus for the Federal Reserve to start lowering interest rates.
“The labor market appears weaker than originally reported,” said Jeffrey Roach, chief economist at LPL Financial. “A deteriorating labor market will allow the Fed to highlight both sides of the dual mandate and investors should expect the Fed to prepare markets for a cut at the September meeting.”
At the sector level, the biggest downward revision came in professional and business services, where job growth was 358,000 less. Other areas revised lower included leisure and hospitality (-150,000), manufacturing (-115,000), and trade, transportation and utilities (-104,000).

Within the trade category, retail trade numbers were cut by 129,000.
A few sectors saw upward revisions, including private education and health services (87,000), transportation and warehousing (56,400), and other services (21,000).
Government jobs were little changed after the revisions, picking up just 1,000.
Nonfarm payroll jobs totaled 158.7 million through July, an increase of 1.6% from the same month in 2023. There have been concerns, though, that the labor market is starting to weaken, with the rise in the unemployment rate to 4.3% representing a 0.8 percentage point gain from the 12-month low and triggering a historically accurate measure known as the “Sahm Rule” that indicates an economy in recession.
However, much of the gain in the unemployment rate has been attributed to an increase in people returning to the workforce rather than a pronounced surge in layoffs.
“This preliminary estimate doesn’t change the fact that the jobs recovery has been and remains historically strong, delivering solid job and wage gains, strong consumer spending, and record small business creation,” White House economist Jared Bernstein said in a statement.
To be sure, economists at Goldman Sachs said later Wednesday that they think the BLS may have overstated the revisions by as much as half a million. The firm said undocumented immigrants who now are not in the unemployment system but were listed initially as employed amounted for some of the discrepancy, along with a general tendency for the initial revision to be overstated.
Federal Reserve officials nonetheless are watching the jobs situation closely and are expected to approve their first interest rate cut in four years when they next meet in September. Chair Jerome Powell will deliver a much-anticipated policy speech Friday at the Fed’s annual retreat in Jackson Hole, Wyoming, that could lay the groundwork for easier monetary policy ahead.

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