Tuesday, June 20, 2023

The Daily Money: What's worrying the stock market today?

The Daily Money: Investors return from a three-day holiday weekend to worries China's economy is weakening and the Fed may have to keep raising rates.

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The Daily Money

ALL THE MONEY NEWS YOU NEED TO KNOW

Tue Jun 20 2023
 

Medora Lee |  Money and Personal Finance reporter

It's Medora Lee, and I don't know about you, but I am suffering a three-day weekend hangover. What day is it again? Right, Tuesday.

Looks like I'm not the only one in a haze. All major U.S. stock indexes are lower this morning, unable to extend a recent rally to their 2023 peaks. Investors appear worried about China's weak economy hurting global growth. China is the world's second-largest economy, behind the U.S.

Domestically, we have the opposite worry: Our economy is still way too hot to contain inflation. Housing starts surged 21.7% in May on a seasonally adjusted annual basis for the strongest rise since October 2016 and the eighth largest monthly gain since at least 1959, Wells Fargo economists said. Further, there are more homes coming. Builder permits jumped 18.5% to the highest level in 11 months. This sounds great for renters and home buyers, but for the Federal Reserve and borrowers? Not so much.

"If Fed rate hikes can't bring down the most interest rate-sensitive sector of the economy, then maybe interest rates are still not high enough," said Chris Rupkey, chief economist at market research firm FWDBONDS LLC.
Ap Juneteenth Texas A Usa Tx

Tanieka Francis works among balloons while decorating for the annual Galveston Juneteenth Parade in Galveston, Texas, on Saturday, June 17, 2023.

Stuart Villanueva, The Galveston County Daily News via AP

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About The Daily Money

Each weekday, The Daily Money delivers the best consumer news from USA TODAY. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.
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The U.S. is currently grappling with a massive labor shortage. During the pandemic, early retirements surged, parents of school-age children left the workforce en masse, a nd immigration slowed considerably. This led to millions of fewer workers than there otherwise would have been. Meanwhile, American workers - primarily i n low-w age sectors - continued to quit their jobs in record numbers in search of better opportunities. Currently, the labor force par ticipation rate - the share of America ns 16 and older either working or looking for work - stands at 62.2%, a low not seen in the pre-pandemic United States since the 1970s. This is what it costs to retire comfortably in each state . The national shortage of workers has left employers struggling to fill open positions - forcing some businesses to reduce hours of operation and others to shutter completely. There were over 11.5 million job openings nationwide at the end of March 2022, an all-time high, and 36% more than the same month last year. In much of the country, the problem shows few signs of slowing. In the last month alone, 24 states reported an increase in the number of unfilled jobs. Using data from the Bureau of Labor Statistics, 24/7 Wall St. identified the states where job openings are surging. States are ranked by the change in the number of open jobs between February 2022 and March 2022, the most recent months of available data. Of the 50 states, 20 reported a month-to-month drop in unfilled jobs, six reported no change, and in four of the 24 that reported an increase, job openings surged by over 10%. Despite the need for workers, a small percentage of the labor force remains unemployed, suggesting that among the unemployed there is a mismatch between either the skills employers are seeking and the labor pool or the kind of work or benefits job seekers desire and what employers offer. The national unemployment rate was 3.6% in March 2022. Depending on the state, unemployment ranges from 2.0% to 5.3%. Here is a look at the industry laying off the most Americans.
 

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Counterfeit savings bonds trigger problems for banks, savers

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