Job growth totals 253,000 in April, beating expectations even as the U.S. economy slows

The US economy added 253,000 nonfarm payrolls in April, beating estimates of 180,000, according to data from the Bureau of Labor Statistics. The unemployment rate fell to 3.4%, matching the lowest level since 1969, while wages rose 0.5%, more than the expected 0.3%, with annual gains of 4.4%, above the predicted 4.2%. The figures boosted the chances of the Federal Reserve raising interest rates again in June, while Wall Street opened higher following the report. Despite the positive news, previous months were revised down, with March's count lowered to 165,000, down from 236,000 initially.

Article: https://www.cnbc.com/2023/05/05/jobs-report-april-2023-job-growth-totals-25300-in-april.html

‘A recessionary mindset’

The US Commerce Department reported that annual price growth fell to its lowest level in two years, but for consumers, rising interest rates and persistently high prices have taken their toll. Inflation-adjusted consumer spending remained flat in March, marking the fourth time in five months that expenditures held steady or declined. The trend suggests that January's spending burst is looking more like a one-off spurt. The chief economist at EY, Gregory Daco, said that the full effect of recent banking-sector turmoil and the associated tightening in financial conditions has yet to be felt. This should lead to the emergence of recessionary conditions by mid-year. However, high inflation on consumer packaged goods has plagued consumers for three years, and CPG prices were up 8.8% year over year, according to data from the consumer analytics company NIQ. The author estimates, "that consumers are spending $136 now for the same basket of goods that would have cost $100 in 2019, and they’re changing shopping behaviors as a result."

As well as, “If you ask the economists, ‘Are we in a recession?’ they’re going to say ‘No, we’re not in a recession,’” he said. “But we know that the way consumers are shopping and the way they’re adjusting to the rising cost of living is a recessionary mindset.”

Article: https://www.cnn.com/2023/05/03/economy/consumer-spending-retrenching-recession/index.html

Financial Impact of Churchill Downs and Derby Week

According to a new report by Thomas Lambert, an economics professor at the University of Louisville Equine Business Program, the Kentucky Derby and Churchill Downs generate $396 million in direct, indirect, and induced spending and approximately $47 million in local, state, and federal tax revenue in a typical year. The report also estimates that the local and state governments provide $3-4 million in tax incentives and services to Churchill Downs and the Kentucky equine industry each year. However, these tax losses are offset by $17 million in tax revenue for local and state government generated by Churchill Downs and local businesses during Derby week. The report also notes that COVID-19 significantly reduced revenues for Churchill Downs, the community, and taxing authorities in 2020 and 2021. Despite this, Churchill Downs has been able to offset a trend of declining revenues and attendance at most racetracks in the United States, thanks to Derby Week and diversification into historical horse racing and racing casinos like Turfway Park in Florence, Kentucky.

Figures:

• Estimated Derby Week economic impact of Churchill Downs: $302 million
• Estimated Derby Week direct, indirect, and induced spending on hotels, restaurants, etc.: $94 million
• Total Derby Week economic activity: $396 million

• Article: https://www.uoflnews.com/post/uofltoday/financial-impact-of-churchill-downs-and-derby-week/

Ryan Reynolds and Rob McIlhenney's financial influence at Wrexham laid bare

Ryan Reynolds and Rob McIlhenney's ownership of Wrexham football club has helped to generate close to £6 million in the period between June 2021 and June 2022. However, despite the impressive revenue, Wrexham still ended up with a loss of nearly £3 million due to rising football costs of £3.94 million. Reynolds and McIlhenney's takeover in February 2021 has resulted in the growth of a unique global brand for the club. The Wrexham football club, which will face Manchester United in a pre-season friendly this summer in San Diego, has been able to benefit from the injection of cash both on and off the pitch. The huge upturn in revenue has provided a bright future for Wrexham, with matchday income accounting for an incredible £2.65 million. Retail income totaled £1.303 million, while sponsorship and advertising brought in £1.053 million to the famous Racecourse Ground. Wrexham, which was currently sitting second in the National League at the time this article was written, ended up finishing 1st in the standings and will receive automatic promotion to the EFL next season. The loss for the period was £2.914 million, but the R.R. McReynolds Company LLC introduced £3.67 million of loan funding and subscribed for equity in the sum of £1.2 million. The Directors have confirmed that they will continue to fund the Club going forward.

Article: https://www.mirror.co.uk/sport/football/news/ryan-reynolds-rob-mcilhenney-wrexham-29601091

Tech Workers Aren’t as Rich as They Used to Be

While tech incomes have continued to climb, a recent analysis from "Hired" shows that American tech workers are not as well-off as they once were. The survey found that although the cost of living has climbed by 24% over the previous five years, and average tech salaries have increased by 16%, tech workers' purchasing power has decreased.

The report also revealed that there is still a sizable gender pay disparity in the technology industry, with women in equivalent professions earning 8% less on average than males. The study also discovered that there are still racial wage discrepancies, with Black and Latino tech professionals making less than their white and Asian peers. In locations with the highest cost of living in the nation, like San Francisco and New York, the fall in the spending power of tech professionals is particularly severe. According to the study, this would make it more challenging for tech companies to find and keep talent in these locations, which might cause a move toward remote work or the emergence of tech hubs in lower-cost regions.

The results show that tech companies must deal with concerns of wage equity and cost-of-living adjustments, especially if remote labor becomes more common in the wake of the pandemic. Failure to act could result in a loss of talent and a reduction in the tech industry's competitiveness.

https://www.wsj.com/articles/tech-workers-arent-as-rich-as-they-used-to-be-d2292d64?mod=tech_lead_pos6

Can Lithium Save Bolivia’s Economy?

Bolivia, which has the greatest lithium deposits in the world, wants to use this natural resource to strengthen its economy. In addition, lithium is a desirable commodity on the world market since it is an essential component of batteries used in electric vehicles and other electronics. However, political unrest and a lack of investment have made it difficult for Bolivia to expand its lithium sector.

The article examines the advantages and disadvantages of advancing Bolivia's lithium sector. On the one hand, the industry might significantly boost the nation's economy through job growth and higher export earnings. Additionally, Bolivia's reliance on other natural resources like oil and gas could be reduced with the development of the lithium industry. The growth of the lithium business is not without possible dangers, though. For example, lithium mining can significantly affect the environment if it is not adequately controlled. Furthermore, there are worries about the concentration of wealth and power in the hands of a small number of businesses or people, which could intensify political unrest and inequality in the nation.

The Bolivian government is attempting to draw investment and create a sustainable lithium industry that balances economic growth and environmental and social considerations to address these issues. This involves initiatives to create new environmentally friendly lithium extraction technologies and attempts to upgrade infrastructure and draw in international investment.

https://partners.wsj.com/cme-group/beyond-the-market/can-lithium-save-bolivias-economy/?utm_medium=WSJ&utm_source=1317385_1_wsj_economy_front_native(25interactive.wsj.comov)_flight1

In New World of Trade Diplomacy, Free Trade and Tariffs Take a Back Seat

The COVID-19 pandemic has altered the nature of trade diplomacy as countries now prioritize internal issues and the requirement for supply chain security. As a result, conventional strategies like free trade and tariffs have received less attention. As an alternative, nations are considering export restrictions, investment screening, and subsidies to safeguard their interests.

The pandemic's disruption of global supply networks, which has highlighted the vulnerability of nations that depend primarily on imports, has been one of the primary forces behind this transition. As a result, several countries are currently attempting to increase their domestic manufacturing capacities and lessen their reliance on imports. In addition, investment screening has increased as nations work to prevent foreign takeovers of their important sectors. However, the pandemic has also highlighted how crucial it is to retain access to necessities like food and medical supplies. As a result, some nations have put export restrictions in place to make sure they have enough supplies to meet domestic demand.

Politics has also played a role in the shift away from free trade and tariff-based policies as nations seek to safeguard their own economies and labor forces. This has resulted in an increase in government support for important industries through subsidies and other means. 

Overall, the article emphasizes how trade diplomacy is evolving in the post-pandemic world as countries attempt to strike a balance between the need for economic growth and the requirement for security and resilience in their supply chains.

https://www.wsj.com/articles/in-new-world-of-trade-diplomacy-free-trade-and-tariffs-take-a-back-seat-ed896567?mod=economy_lead_story

Fed survey: Banks are tightening up their lending standards after rate hikes

According to the Federal Reserve's survey, banks' concerns about inflation, which they believe will continue to rise in the coming months, are a major factor in the strict lending requirements. Banks have taken a cautious approach to lending as a result of their concerns about the ongoing pandemic's impact on the economy.

The tightening of lending requirements may cause firms and consumers to have more difficulty obtaining credit in the upcoming months, which might potentially hinder economic growth. As a result, firms might find it difficult to invest in new initiatives or hire new staff, which could have a ripple impact on the economy as a whole. The ability of households to acquire expensive items, such as a new home or automobile, may also decrease, which could have an effect on the housing and automotive industries.

Overall, the study indicates that banks are becoming cautious about lending in the current financial climate, which may have an impact on the economy as a whole. As a result, decision-makers might need to take into account policies like targeted fiscal stimulus or flexible monetary policy to promote lending and support economic growth.

https://www.cnn.com/2023/05/08/economy/fed-senior-loan-officer-opinion-survey-q1/index.html

White House Warns Debt Default Could Wipe Out 8 Million Jobs, Plunge Stock Market

 According to the White House, they warned people on Wednesday that 8 million jobs will be lost due to a protracted debt default. There are enormous breaks in the debt ceiling with a potential break as well. The White House economist spoke "a protracted default would likely lead to severe damage to the economy, with job growth swinging from its current pace of robust gains to losses numbering in the millions". The debt could be defaulted as soon as June 1st of Congress doesn't act according to Treasury Secretary Janet Yellen. Brinksmanship is a short default and a protracted default the report estimates impact under. It basically would knock out 0.3 percentage points off annual gross domestic product by wiping out 200,000 jobs. About half a million jobs would be suffered sending the unemployment rate up by 0.3 percentage points. 

https://www.cnn.com/2023/05/03/economy/white-house-debt-default/index.html