Week of August 2, 2024 Weekly Recap & The Week Ahead
“It Ain’t About How Hard You Hit, It’s About How Hard You Can Get Hit And Keep Moving Forward.” — Rocky
1. US Labor Costs Rise Less Than Forecast as Inflation Eases — The employment cost index, which measures wages and benefits, increased 0.9% in the April-to-June period, after rising by the most in a year at the start of 2024, according to Bureau of Labor Statistics figures out Wednesday. The median estimate in a Bloomberg survey of economists called for a 1% rise. The figures corroborate recent data that show the labor market is moderating toward its pre-pandemic trend. Other measures also point to cooling wage growth, as well as a slower pace of hiring and rising unemployment.
2. Powell Says Fed Could Cut Rates ‘As Soon As’ September Meeting — Federal Reserve Chair Jerome Powell said an interest-rate cut could come as soon as September after the US central bank voted to leave its benchmark at the highest level in more than two decades. His comments followed a Federal Open Market Committee decision to leave the federal funds rate in a range of 5.25% to 5.5%, a level they have maintained since last July. Policymakers also made several adjustments to the language of a statement released after their two-day meeting in Washington, signaling they are closer to reducing borrowing costs. Notably, the committee shifted to saying it is “attentive to the risks to both sides of its dual mandate,” rather than prior wording focused just on inflation risks.
3. U.S. Hiring Slowed Sharply, With 114,000 Jobs Added in July — ob growth slowed sharply in July and the unemployment rate rose to its highest level since 2021, adding to evidence that a labor market whose strength is fading could actually be on its way to weakness.
America is still adding jobs, but no longer at a red-hot pace. The Labor Department reported on Friday that employers added 114,000 jobs last month, missing expectations. The unemployment rate jumped to 4.3%—its highest level in nearly three years, when the labor market was still clawing its way back from the pandemic.
4. Intel has worst day on Wall Street in 50 years, falls to lowest price in over a decade — Intel
shares plunged the most in 50 years on Friday, reaching a price not seen since 2013, after the chipmaker reported a big earnings miss and announced a massive restructuring.
The stock plummeted 26% to $21.48 at the close. It was the second worst day ever for the shares, behind only a 31% drop in July 1974, which was three years after Intel’s IPO. The company’s market cap is now below $100 billion. Intel said it won’t pay its dividend in the fiscal fourth quarter of 2024 and lowered its forecast for full-year capital expenditures by over 20%. The company said it would lay off more than 15% of its employees as part of a $10 billion cost-reduction plan.