The number of Americans filing new applications for unemployment benefits dropped to a four-month low last week, suggesting that the labour market remained fairly healthy.

The upbeat outlook on the economy was underscored by other data on Thursday showing corporate profits increased at a more robust pace than initially thought in the second quarter. Strong profit growth should help to underpin the labor market and potentially shield the economy from a recession.

The economy's resilience could make it harder for the Federal Reserve to deliver another 50 basis points interest rate cut in November as some investors are hoping.

"The Fed's strong start to unraveling its monetary restraint with an aggressive 50 bps rate cut may not continue if the economy's ship remains well away from the shoals of recession," said Christopher Rupkey, chief economist at FWDBONDS.

"(Fed chair Jerome) Powell does not want to see the unemployment rate tick any higher and the weekly jobless claims data suggest this will not be the case."

Initial claims for state unemployment benefits dropped 4,000 last week to a seasonally adjusted 218,000 for the week ended Sept 21, the lowest level since mid-May, the Labor Department said. Economists polled by Reuters had forecast 225,000 claims for the latest week.

Unadjusted claims decreased 5,957 to 180,878 last week, with notable declines in New York and Texas. No state reported a rise in filings in excess of 1,000.

Though the labour market has lost momentum amid declining job openings and a step-down in hiring, layoffs have remained low and there are no signs of deterioration.

But a strike by about 30,000 machinists at Boeing, which has forced the aerospace company to announce temporary furloughs of tens of thousands of employees, including what it said was "a large number of US-based executives, managers and employees" could boost claims in the weeks ahead.

Striking workers are not eligible for unemployment benefits, but the work stoppage could cause employment disruptions at Boeing's suppliers in addition to the temporary furloughs.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 13,000 to a seasonally adjusted 1.834 million during the week ending Sept 14, the claims report showed.

The so-called continuing claims have dropped from more than 2-1/2-year highs touched in July, attributed to policy changes in Minnesota that allowed non-teaching staff in the state to file for unemployment aid during the summer school holidays.

The continuing claims data covered the week during which the government surveyed households for September's unemployment rate. Continuing claims fell between the August and September survey week. The jobless rate slipped to 4.2% in August after rising to 4.3% in July. The increase in the unemployment rate from 3.4% in April 2023 as a surge in immigration boosted labour supply has raised fears of rapid labour market deterioration.

The US central bank last week cut interest rates by 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, which Powell said was meant to demonstrate policymakers' commitment to sustaining a low unemployment rate.

Financial market saw a roughly 54.2% chance of another half-percentage-point rate cut at the Fed's Nov 6-7 policy meeting, according to CME's FedWatch tool. The odds of a 25 basis points cut were around 45.8%.

Strong economic growth

A separate report from the Commerce Department's Bureau of Economic Analysis showed corporate profits including inventory valuation and capital consumption adjustments increased at a US$132.5 billion (RM548.7 billion) annualised rate in the second quarter. They were revised up from the US$57.6 billion pace estimated last month.

The revision reflected a sharp upgrade to domestic profits of non-financial corporations, which are now estimated to have increased US$108.8 billion, instead of US$29.2 billion. Income at the disposal of households was also solid.

As a result, gross domestic income growth, which measures economic activity from the income side, was revised up to a 3.4% rate last quarter from the initially estimated 1.3% pace. GDI rose at an upwardly revised 3.0% pace in the January-March quarter from the previously reported 1.3% rate.

Gross domestic product growth was unrevised at a 3.0% rate last quarter, in line with economists' expectations. In principle, GDP and GDI should be equal, but in practice they differ as they are estimated using different and largely independent source data.

The government revised the national accounts data from the first quarter of 2019 through the first quarter of 2024. The revisions showed economic growth and corporate profits were stronger in 2023 than previously estimated.

The revision narrowed the gap between GDP and GDI, which some economists have argued suggested that GDP was overstating the economy's health.

The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 3.2% rate last quarter. That was revised up from the previously estimated 2.1% pace. Gross domestic output advanced at a 2.3% pace in the first quarter, revised up from the previously reported 1.4% pace.

Source: Theedgemarkets

The US economy bounced back from the pandemic in stronger shape than previously estimated, spurred mainly by bigger consumer-fuelled growth, according to revised government data.

The comprehensive annual update from the Bureau of Economic Analysis (BEA) showed a 5.5% average inflation-adjusted increase in gross domestic product (GDP) from the second quarter of 2020 through 2023. The revised figure compared with a previously published 5.1% advance.

The revisions found that the economy grew US$294.2 billion (RM1.22 trillion) more in the five years ended in 2023 than previously reported. About two-thirds of that revision was due to stronger consumer spending.

The economy expanded at a 3% pace in the second quarter of this year, the BEA data showed in a separate release. The pickup from the prior quarter primarily reflected increases in consumer spending, inventory investment, and business outlays. In the first three months of the year, GDP increased at a revised 1.6% rate from a previously reported 1.4%.

Growth last year was revised up to 2.9% from 2.5%, though the source of the adjustment was concentrated in the first half. GDP, while still robust, was revised down in the third and fourth quarters.

Real GDP advanced 2.5% in 2022, 0.6 percentage point stronger than previously estimated. Moreover, the updated figures now show that only the first quarter of that year experienced declining GDP rather than back-to-back quarterly decreases as initially reported.

The government figures also showed an upward revision to 2023 gross domestic income (GDI), or the income generated and costs incurred from producing goods and services. Inflation-adjusted GDI growth last year was boosted to 1.7% from 0.4%.

Gross domestic product

Two things that stand out in the GDP portion of the update are the upward revision to second-quarter 2022 GDP and the modest softening of growth in the second half of last year. While still robust, growth was revised down 0.5 percentage point to 4.4% in the third quarter and 0.2 point to 3.2% in the fourth quarter of 2023 — indicating a little less momentum entering 2024.

For 2022, the government revised up second-quarter GDP to a 0.3% increase from a decline of 0.6%. Previously, the data showed consecutive quarters of declining GDP that had fit the traditional definition of a recession, but in the US it’s not official until economists at the National Bureau of Economic Research deem it so.

Gross domestic income

The annual revisions bring GDI — the total income earned by all sectors of an economy, including wages, profits, taxes, and rental income, while excluding subsidies — closer to GDP. The BEA update boosted 2022 national income by US$240 billion and 2023 by almost US$559 billion.

In theory, GDP and GDI should be equal, but in practice, the measures can occasionally offer differing pictures of the economy. The latest revisions helped narrow the differences. In 2023, GDI growth was revised up to 1.7% from 0.4%. Growth in 2022 GDI was revised to 2.8% from 2.1% and in 2021 it was revised up half a percentage point.

The revisions show that the ancillary income some Americans receive was more robust than previously measured too. These types of personal income including interest income, dividends and proprietors’ income were marked higher in 2023. The strength may help explain why consumers were able to spend more freely than many thought possible.

The annual update also showed a sizeable increase in corporate profits in the five years through 2023. Earnings were revised up US$288.5 billion for 2023.

Inflation

Gross domestic purchases prices, the prices of goods and services purchased by US residents, increased 2.4% in the second quarter of 2024, the same as previously estimated. Excluding food and energy, prices increased 2.6%, also the same as previously estimated.

The price gauge rose 3.8% in 2023 — up from the 3.7% previously estimated. Excluding food and energy, the so-called core PCE price index was unrevised at 4.1%.

Business cycles

After an abrupt downturn of the economy because of the pandemic, the subsequent rebound was quite strong. That snapback reflected trillions of dollars in fiscal spending and a swift reduction in interest rates. The expansion that started in the second quarter of 2020 is so far among the best since the aftermath of World War II.

The BEA’s annual update is based on both newly available and revised data and includes revisions from the first quarter of 2019 through the fourth quarter of 2023.

Source: Theedgemarkets

Cook's Speech 

In the fast-paced world of content creation, artificial intelligence is reshaping industries and how we communicate.

Yet while AI excels in speed and scale, human insight is still critical for capturing cultural context and linguistic nuance — especially in regions like the Middle East, where dialects and cultural subtleties matter.

This is where STUCK?, a groundbreaking platform created by Asmaa Naga, comes into play, combining the raw power of AI-driven large language models with the nuanced understanding of human experts to create accurate, high-quality content in English and Arabic.

“During COVID, I began to see how my experience in language and my awareness of corporate linguistic needs could help me create a solution to bridge a gap,” Naga, who taught at the British Council in Jeddah for 11 years prior to launching the platform, told Arab News.

Established in 2022, STUCK? employs a group of language models, each specializing in different aspects of language processing.

“One model is designed to handle large contexts, another excels in translation, while another has exceptional proficiency in understanding Arabic,” said Naga.

AI’s ability to quickly analyze massive datasets and generate content has already revolutionized whole sectors. However, there is still a catch. While AI is excellent at processing language, it often lacks the emotional intelligence and cultural depth only humans can provide.

This is especially crucial in regions where subtle differences in dialect, phrasing or cultural references can dramatically change the meaning or tone of a message.

STUCK? was designed with these challenges in mind. The platform combines multiple AI models, each specialized in different areas such as translation or contextual understanding, to offer a comprehensive solution for creating and localizing content.

But what truly sets STUCK? apart is its ability to handle not just Modern Standard Arabic but also regional dialects, including Levantine, Egyptian and those spoken within Saudi Arabia such as Najdi and Hijazi.

AI-generated content in English or any other widely spoken language has become more advanced over the years, but Arabic — especially its regional dialects — presents unique challenges. It has numerous dialects that vary not only by country but even within regions of a single nation.

For instance, the Arabic spoken in Riyadh differs from that spoken in Jeddah, and that is just within Saudi Arabia. This complexity makes it difficult for standard language models to capture differences accurately.

For industries operating in the Middle East, from healthcare and cultural heritage to oil and gas, accurate communication in the correct dialect can be the difference between success and failure.

But despite the technology’s sophistication, the team behind STUCK? recognize that AI alone cannot fully meet the demands of complex content creation. This is why the platform offers three service tiers — fully human, fully AI, and a blended approach that combines the two.

For routine tasks, AI or the blended model offers quick and efficient solutions. But for high-stakes projects that require a more refined touch — such as marketing campaigns or culturally sensitive communications — the human approach ensures the content resonates with the target audience.

“Users generally do not need guidance to make this choice,” said Naga. “They usually know the importance of the content they want to create or translate and the level of customization needed.”

This flexibility makes STUCK? a highly adaptable tool. In the oil and gas sector, for example, where terminology is highly specialized, the platform’s ability to onboard industry-specific language experts ensures accuracy.

Indeed, it is not just about translating words — it is about making sure the content speaks the industry’s language in both the literal and figurative sense.

AI models are continuously trained and fine-tuned to generate content that responds appropriately to user prompts. But the process does not end with AI generation — human editors review the AI-produced content to ensure it aligns with cultural and linguistic standards. 

“We constantly train and fine-tune our AI models to ensure they generate content that is highly responsive to the prompts used,” said Naga.

Source: ARAB

Oil has lost more than 4% in two days despite the development of a rally in stock markets. The most important news for oil is an article in the FT that Saudi Arabia plans to abandon price targeting at $100 per barrel and intends to increase production. This is similar to the events of early 2020 when, after prolonged OPEC+ coordination, Russia and Saudi Arabia decided to join the fight for market share, which we were quickly taking away.

This news is just as important as in 2014 and 2020 when we saw similar course-changing episodes. Even earlier, in 2008, oil also went into freefall mode when it similarly became too plentiful for the economic conditions at the time. In all three cases, the price after the freefall fell into the $30 area.

So why did oil not go straight into freefall upon the release of such news? There are several reasons.

Firstly, this news needs to be confirmed. The freefall in 2020 and 2014 started after the OPEC meetings when the change of targets was announced publicly and officially.

Second, America is replenishing depleted oil reserves, making the process a regular occurrence with the price of a barrel of WTI near $70.

Third, the U.S. economy maintains a strong growth rate and market optimism is fuelled by speculation that China’s stimulus will boost the economy and commodity prices, including oil.

Fourth, America has been very sluggish in ramping up production and has not invested much in developing new wells. This suggests that if the price falls, the supply from the US could start to dwindle quite quickly.

A new drop in the $30 area looks possible, but it is a very pessimistic scenario. Technically, the Brent price is testing support near $70, which was the 2023 low and reversed the price to the upside.

However, the 200-week average, which is now at $82.1, also provided support, and further declines accompanied a dip below it in July.

Testing the area of last year’s lows is the most important frontier. A failure of Brent below $70 could trigger a freefall. But for now, we cannot rule out the possibility of a rebound.

A powerful hurricane was barreling toward Florida on Thursday, with officials warning of “unsurvivable” conditions and a potentially catastrophic storm surge high enough to swamp a two-story house.

Tens of thousands of people were without power and roads were already flooded ahead of what is expected to be one of the largest Gulf of Mexico storms in decades.

Fast-moving Helene strengthened to an “extremely dangerous” Category 4 hurricane Thursday evening, ahead of landfall expected around 11pm (0300 GMT), the US National Hurricane Center (NHC) said.

It was packing winds of 130 miles (215 kilometers) per hour as it churned over the Gulf’s warm waters toward the Big Bend area south of Florida’s capital city Tallahassee.

“EVERYONE along the Florida Big Bend coast is at risk of potentially catastrophic storm surge,” the NHC said on social media.

Tampa and Tallahassee airports have closed, with parts of St. Petersburg, downtown Tampa, Sarasota, Treasure Island and other cities on Florida’s west coast already flooded.

About 125,000 homes and businesses were without power.

“We’re expecting to see a storm surge inundation of 15 to 20 feet above ground level,” NHC director Mike Brennan said. “That’s up to the top of a second story building. Again, a really unsurvivable scenario is going to play out here in this portion of the Florida coastline.”

The accompanying waves “can destroy houses, move cars, and that water level is going to rise very quickly,” Brennan added.

In Alligator Point, a coastal town on a picturesque peninsula in the storm’s path, David Wesolowski was taking no chances.

“I just came to button up a few things before it gets too windy,” the 37-year-old real estate agent told AFP as he boarded up his house on stilts.

“If it stays on course, this is going to look different afterwards, that’s for sure,” he said, before taking his family to higher ground in Tallahassee.

Meanwhile, Patrick Riickert refused to budge from his small wooden house in Crawfordville, a town of 5,000 people a few miles inland.

As in Alligator Point, most residents have bolted and it looked like a ghost town, but Riickert, his wife and five grandchildren were “not going anywhere,” the 58-year-old insisted.

“I am going to hunker down” and ride out the hurricane, as he did in 2018 when deadly Hurricane Michael, a Category 5 megastorm, blew through the Florida panhandle.

The NHC warned of up to 20 inches (51 cm) of rain in some spots, and potentially life-threatening flooding as well as numerous landslides across the southern Appalachians.

The National Weather Service said the region could be hit extremely hard, with floods not seen in more than a century.

“This will be one of the most significant weather events to happen in the western portions of the area in the modern era,” it warned.

Tornado warnings went out across northern Florida, Georgia and the Carolinas.

Georgia’s sprawling capital Atlanta was forecast to experience tropical storm-force winds and flash flooding from up to 12 inches of rain.

And Tennessee — more than 300 miles from the Gulf Coast — braced for tropical storm conditions statewide.

More than 55 million Americans were under some form of weather alert or warning from Hurricane Helene.

“This is going to be a multi-state event with the potential for significant impacts from Florida all the way to Tennessee,” Federal Emergency Management Agency administrator Deanne Criswell told reporters.

Vice President Kamala Harris said the White House was watching.

“The President and I, of course, are monitoring the case and the situation closely, and we urge everyone who is watching at this very moment to take this storm very seriously,” she told reporters.

Florida Governor Ron DeSantis mobilized the National Guard and ordered thousands of personnel to ready for search-and-rescue operations.

He warned that the powerful storm would be dangerous, and urged everyone to take precautions.

“We can’t control how strong this hurricane is going to get. We can’t control the track of the hurricane, but what you can control is what you can do to put yourself in the best chance to be able to ride this out in a way that’s going to be safe.”

Helene could become the most powerful hurricane to hit the United States in over a year — and almost certainly the biggest.

Hurricane specialist Michael Lowry called Helene “extreme,” noting its tropical storm winds of 39 mph or higher stretched nearly 500 miles across.

Researchers say climate change likely plays a role in the rapid intensification of hurricanes, because there is more energy in warmer oceans for them to feed on.

Source: ARAB