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U.S. consumers more optimistic about labor market, Fed survey finds

U.S. consumers more optimistic about labor market, Fed survey finds

(Reuters) – U.S. consumers in September became slightly less worried about losing their jobs and more optimistic about their earnings, though the effects of the economic crisis caused by the coronavirus pandemic lingered, according to a survey released on Tuesday by the New York Federal Reserve.



a large stone statue in a park: FILE PHOTO: The Federal Reserve in Washington


© Reuters/Kevin Lamarque
FILE PHOTO: The Federal Reserve in Washington

The average perceived chance of becoming unemployed over the next year dropped to 16.6% in September from 18% in August but was still well above the pre-pandemic level of 13.8% in February. The drop was driven by an improvement in sentiment among people above age 60 and those with household incomes below $50,000.

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While the U.S. labor market continues to heal from the damage caused by the pandemic, data released by the Labor Department earlier this month shows the recovery is slowing. Nonfarm payrolls increased by 661,000 jobs in September, the smallest gain since the jobs recovery started in May.

The Fed survey suggested that some consumers think the worst of the pain in the labor market has passed. Expectations that the U.S. unemployment rate will be higher in a year dropped to an average 36.4% in September from 39.1% in August.

Consumers reported feeling better about their pay and their ability to spend. The median expectation for household income growth increased to 2.3% in September, up 0.1 percentage point from August but still below the 2019 average of 2.8%. Median expectations for household spending growth increased to 3.4% in September, from 3% in August, reaching the highest level since May 2019.

The survey of consumer expectations is a monthly poll conducted on a rotating panel of 1,300 households.

Median inflation expectations for the next year remained unchanged at 3% at the one-year horizon and expectations for the next three years dropped

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Larry Kudlow says economic recovery is not ‘dependent’ on a stimulus package, contradicting pleas from Fed

Larry Kudlow says economic recovery is not ‘dependent’ on a stimulus package, contradicting pleas from Fed



Lawrence Kudlow wearing glasses: Larry Kudlow participates in coronavirus economic "relief update" virtual event at the White House in Washington Kevin Lamarque/Reuters


© Kevin Lamarque/Reuters
Larry Kudlow participates in coronavirus economic “relief update” virtual event at the White House in Washington Kevin Lamarque/Reuters

  • White House economic advisor Larry Kudlow said Sunday that he doesn’t think an economic recovery is “dependent” on passing the next coronavirus stimulus package.
  • Kudlow’s remarks contradict pleas from Fed Chair Jay Powell, who warned on Tuesday that the economy might falter if another stimulus package doesn’t make it through Congress. 
  • The next stimulus package remains stalled in Congress, as Democrats and Republicans continue to hammer out details of the plan.
  • Visit Business Insider’s homepage for more stories.

White House economic advisor Larry Kudlow said Sunday that he doesn’t think an economic recovery is “dependent” on passing the next coronavirus stimulus package, contrary to the guidance put out by the Federal Reserve. 

“I don’t think the recovery is dependent on it,” Kudlow said on CNN’s “State of the Union.” Kudlow went on, explaining why he thinks the potential lack of another stimulus bill will not tank the economy. 

“We’ve seen numbers across the board, just in the past week: booming housing starts, supply management for manufacturing and for services. We’ve seen automobiles surging,” he said.

“We’ve created…700,000 jobs in manufacturing,” he continued. “These are really strong numbers.”

Kudlow’s remarks contradict pleas from Fed Chair Jay Powell, who warned on Tuesday that the economy might falter if another stimulus package doesn’t make it through Congress. 

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“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in a speech. Powell has consistently urged Congress to pass a stimulus package to help the economy recover from the devastation brought on by the coronavirus.

The next stimulus package remains stalled in Congress, as Democrats and

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Bitcoin Is An ‘Insurance Policy’ Against The Fed

Bitcoin Is An ‘Insurance Policy’ Against The Fed

The U.S. dollar has been under pressure this year, taking a big hit as the coronavirus pandemic wreaked havoc on America’s economy.

In the run up to next month’s U.S. presidential election, investors are scrambling to understand how a win for either incumbent Donald Trump or Democratic challenger Joe Biden will move the dollar and currency markets.

However, former Facebook
FB
executive-turned venture capitalist, Chamath Palihapitiya, has warned neither Biden nor Trump will help U.S. dollar—but holding bitcoin is an “insurance policy” that helps him to “sleep soundly at night.”

MORE FROM FORBESForget Jack Dorsey And Square-Is This The Real Reason Bitcoin Has Suddenly Soared?

“The reality is that [the Federal Reserve and the U.S. Treasury] have printed so much money that the likelihood is that we’re going to continue to see asset price inflation independent of who’s in the White House,” Palihapitiya told CNBC’s Squawk Box this week, adding he holds bitcoin just “in case the central banks and governments of the world step on a landmine.”

The Fed and the Treasury have embarked on massive stimulus programs this year, injecting trillions of dollars in the financial system in an attempt to offset the economic damage caused by the coronavirus pandemic.

This unprecedented intervention, propelling the stock market to record highs even as unemployment has spiked and businesses struggle nationwide, has sparked fears among some investors that a severe bout of inflation is on the way.

Palihapitiya, who began his VC career while still

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Fed officials fear lack of stimulus will stifle the US economic recovery, according to September meeting minutes

Fed officials fear lack of stimulus will stifle the US economic recovery, according to September meeting minutes



a man wearing a suit and tie: Getty Images / Tasos Katopodis


© Getty Images / Tasos Katopodis
Getty Images / Tasos Katopodis

  • Minutes from the Federal Open Market Committee’s September 15-16 meeting show Federal Reserve officials raising concerns that a lack of new fiscal support could hinder the US economic recovery.
  • FOMC participants “assumed the enactment of some additional policy support this year,” according to the minutes. Without such support, “the pace of the economic recovery would likely be slower,” they added.
  • The meeting came roughly three weeks before President Trump abruptly halted negotiations on a new bill, saying in a Tuesday tweet he would freeze stimulus talks until after the presidential election.
  • Some FOMC members fired back at the president’s action. Letting the economy move forward without congressional support is like “letting the forest fire just rage,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Wednesday.
  • Visit the Business Insider homepage for more stories.

Federal Reserve officials raised concerns about a lack of additional fiscal stimulus during their September meeting, roughly three weeks before President Donald Trump axed negotiations for new aid.

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Minutes of the Federal Open Market Committee’s September 15-16 meeting revealed policymakers “assumed the enactment of some additional fiscal policy support this year.” Without such support from Congress, “the pace of the economic recovery would likely be slower,” according to the minutes.

The absence of new stimulus would also “exacerbate economic hardships in minority and lower-income communities,” FOMC participants added. The two groups are among those hit hardest by the virus and its economic fallout.

“For the time being, the Fed is sending the message that they have, in fact, done a lot already,” Bob Miller, BlackRock’s head of fundamental fixed income in the Americas, said. “What is clearer, however, is the committee members’ revealed preference that fiscal policy is the optimal response

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Jerome Powell, Fed Chair, Says Economy Has ‘a Long Way to Go’ as Trump Calls Off Stimulus Talks

Jerome Powell, Fed Chair, Says Economy Has ‘a Long Way to Go’ as Trump Calls Off Stimulus Talks

In deciding to forgo any more immediate relief, the president could be setting the economy up for the type of painful outcome that Mr. Powell warned of on Tuesday. The Fed chair, who has increasingly called for more government help, said policymakers should err on the side of injecting too much money into the economy rather than too little given how much work remains.

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Mr. Powell said in remarks before the National Association for Business Economics.

“Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth,” he said. “By contrast, the risks of overdoing it seem, for now, to be smaller.”

In multiple tweets later Tuesday night, Mr. Trump appeared to backtrack his assertion that an agreement would wait until after Nov. 3, at one point urging both chambers to “IMMEDIATELY Approve” reviving a lapsed loan program for small businesses, funds to prevent airlines from furloughing or laying off workers and another round of stimulus checks. It remained unclear if his tweets, which came after stocks plummeted, reflected a willingness to restart negotiations with Ms. Pelosi. Both provisions have bipartisan support, but several lawmakers have pushed for them to be included in a broader package.

Nearly seven months into the pandemic, millions of Americans remain unemployed as the coronavirus keeps many service industries operating below capacity. The unemployment rate has fallen more rapidly than many economists expected, dropping to 7.9 percent in September, and consumer spending is holding up. But the economy’s resilience owes substantially to strong government assistance that has been provided to households and businesses.

That included direct payments to families, forgivable loans to small businesses and an extra $600 per

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