FintechZoom Chevron Stock Analysis: In-Depth Insights & Market Trends

Economic

Summary:

Explore FintechZoom's detailed analysis of Chevron (CVX) stock, featuring real-time data, financial metrics, expert insights, and advanced charting tools to help you make informed investment decisions in the energy sector.

Chevron Corporation (CVX) is one of the world’s largest and most diversified energy companies. Known for its extensive operations in oil, natural gas, and renewable energy sectors, Chevron has been a key player in the global energy market for over a century. The company’s stock, listed on the New York Stock Exchange under the ticker symbol CVX, is a significant component of the Dow Jones Industrial Average and is widely held by investors seeking exposure to the energy sector. In this article, we delve into how FintechZoom provides in-depth coverage and analysis of Chevron stock, offering valuable insights, real-time data, and advanced analytical tools. Additionally, we’ll explore how FastBull enhances this analysis, providing investors with a powerful combination of resources for making informed decisions.

Chevron (CVX) Overview

Chevron is an integrated energy company with a broad portfolio of assets across the oil, gas, and renewable energy markets. The company is involved in every aspect of the energy industry, from exploration and production to refining, marketing, and transportation. Chevron’s global operations span over 180 countries, and its products are essential to the world economy.

Key Factors Influencing CVX Stock

Oil and Gas Prices: Chevron’s financial performance is closely tied to fluctuations in oil and gas prices. As a major producer, the company’s revenue and profitability are directly impacted by the global demand and supply dynamics of these commodities.

Global Economic Conditions: The health of the global economy plays a significant role in Chevron’s stock performance. Economic growth drives demand for energy, which in turn affects Chevron’s revenue. Conversely, economic downturns can lead to reduced energy consumption and lower profits.

Energy Transition and Renewable Investments: With the global shift towards cleaner energy, Chevron has been investing in renewable energy projects and technologies. The company’s ability to adapt to the energy transition is a critical factor for its long-term growth prospects.

Geopolitical Risks: As an international energy company, Chevron faces geopolitical risks that can impact its operations and profitability. Political instability, trade policies, and regulatory changes in key markets are factors that investors must consider when analyzing CVX stock.

Dividend Yield: Chevron is known for its strong dividend yield, making it an attractive stock for income-focused investors. The company’s commitment to returning capital to shareholders through dividends is a key factor in its stock valuation.

FintechZoom’s Comprehensive Analysis of Chevron Stock

FintechZoom is a leading financial technology platform that offers extensive coverage and analysis of Chevron (CVX) stock. The platform provides investors with a range of tools and resources designed to help them make informed decisions in the complex and rapidly evolving energy market.

Key Features of FintechZoom’s Chevron Stock Analysis

Real-Time Stock Data and Market Updates: FintechZoom provides real-time stock quotes, market data, and news updates for Chevron stock. This feature is essential for investors who need to stay informed about the latest developments and market movements affecting CVX.

In-Depth Financial Analysis: FintechZoom offers detailed financial analysis of Chevron, including key metrics such as revenue growth, earnings per share (EPS), and operating margins. This analysis helps investors understand the financial health of the company and its potential for future growth.

Advanced Charting and Technical Analysis Tools: FintechZoom’s advanced charting tools allow investors to analyze Chevron stock trends, apply technical indicators, and customize charts to align with their investment strategies. These tools are crucial for identifying patterns and making data-driven trading decisions.

Historical Data and Performance Metrics: FintechZoom provides access to historical data and performance metrics for CVX stock. This data is valuable for understanding the stock’s past performance and making predictions about future price movements.

Market Sentiment and Analyst Ratings: FintechZoom aggregates market sentiment, analyst ratings, and price targets for Chevron stock. This information provides investors with a comprehensive view of how the market perceives Chevron and its potential for future growth.

News Aggregation and Analysis: The platform consolidates news articles, reports, and analyst commentary related to Chevron, giving investors a centralized resource for staying informed about the latest developments.

Enhancing Chevron Stock Analysis with FintechZoom

Real-Time Data and News

For investors in Chevron, staying updated with real-time data is crucial due to the volatility in the energy markets. FintechZoom excels in providing continuous updates on Chevron’s stock price, trading volume, and related news. This feature is particularly important during earnings reports, oil price fluctuations, or geopolitical events that can lead to rapid stock price movements.

Comprehensive Financial Metrics

FintechZoom’s financial analysis tools offer a deep dive into Chevron’s financial statements, including income statements, balance sheets, and cash flow statements. Investors can use these tools to assess Chevron’s financial stability, profitability, and growth potential. Additionally, FintechZoom allows users to compare Chevron’s financial metrics with those of its peers in the energy sector, providing a broader context for investment decisions.

Advanced Charting Tools

For investors who rely on technical analysis, FintechZoom’s advanced charting capabilities are invaluable. The platform offers customizable charts with a wide range of technical indicators, including moving averages, RSI, MACD, and Bollinger Bands. These tools enable investors to identify key support and resistance levels, monitor price trends, and develop trading strategies tailored to Chevron’s stock behavior.

Historical Performance Analysis

Understanding the historical performance of Chevron stock is crucial for making informed predictions about its future movements. FintechZoom provides access to historical price data, earnings reports, and other performance metrics, allowing investors to analyze how Chevron has responded to various market conditions over time. This analysis can be instrumental in forecasting future price movements and identifying long-term investment opportunities.

FastBull’s Role in Chevron Stock Analysis

FastBull is a fintech platform that specializes in real-time market signals and expert analysis. When integrated with FintechZoom’s comprehensive platform, FastBull’s tools provide investors with additional resources to optimize their investment strategies in Chevron stock.

FastBull’s Contributions to Chevron Stock Analysis

Real-Time Market Signals: FastBull offers real-time market signals that alert investors to significant market movements and potential trading opportunities. For Chevron stock, these signals can help investors identify entry and exit points, particularly during periods of high volatility in the energy markets.

Expert Analysis and Strategic Insights: FastBull provides detailed reports and expert commentary on Chevron’s market position, competitive landscape, and future growth prospects. This analysis complements FintechZoom’s coverage by offering investors a deeper understanding of the factors driving Chevron’s stock performance.

Strategic Trading Recommendations: FastBull’s trading strategies are designed to help investors navigate the complexities of trading Chevron stock. These strategies are based on a combination of technical and fundamental analysis, providing actionable insights for optimizing trades.

The Power of Integration

The collaboration between FastBull and FintechZoom creates a powerful synergy for investors. By combining FastBull’s real-time market signals and expert analysis with FintechZoom’s comprehensive data and tools, investors are equipped with a robust toolkit for making informed decisions and maximizing their returns on Chevron stock.

Conclusion

Chevron (CVX) continues to be a key player in the global energy market, with its stock performance closely watched by investors worldwide. FintechZoom provides a comprehensive platform for analyzing Chevron stock, offering real-time data, in-depth financial analysis, advanced charting tools, and expert insights. The integration of FastBull’s real-time market signals and strategic analysis further enhances FintechZoom’s offerings, giving investors a complete set of tools to navigate the complexities of Chevron stock investing.

As the energy market continues to evolve, the collaboration between FintechZoom and FastBull highlights the importance of fintech innovation in shaping the future of stock analysis and investment strategies. With the right tools and insights, investors can make informed decisions, capitalize on opportunities, and effectively manage risks in the ever-changing landscape of the stock market.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Glendon

Economic

The U.S. Census Bureau reported a robust increase in retail sales for July, with overall sales rising by 1% month-over-month and 2.7% year-over-year. This figure surpassed expectations, as the consensus forecast from Dow Jones projected a 0.3% increase. The strong performance was broad-based, with 10 out of 13 categories posting gains, the highest number in recent months.

Drivers of Retail Growth

Several factors contributed to the surge in retail sales: Back-to-school and college spending , along with special deal days offered by retailers, provided a midsummer boost. Falling retail prices and 15 consecutive months of positive real wage growth have been key tailwinds for spending despite increasing growth concerns. Auto sales were the main driver, up 3.6%, as financing costs eased further.

Key Sectors Impacted by Retail Sales Growth

1. Automotive Sector

The automotive industry has seen a notable rebound, with retail sales of automobiles contributing significantly to the overall growth. The increase in consumer confidence, coupled with promotional activities and financing options, has encouraged spending in this sector. However, while overall retail sales rose, the automotive sector's growth was somewhat tempered by ongoing supply chain issues and rising costs, which may affect future sales.

2. Electronics and Communication Equipment

The electronics sector, particularly communication equipment, experienced a remarkable surge, with sales increasing by 12.7% year-on-year. This growth was driven by the release of new models from major brands, reflecting strong consumer demand for the latest technology. This sector's performance indicates a shift towards more discretionary spending as consumers prioritize upgrading their devices.

3. Food and Beverage Industry

The food and beverage sector continued to show stability, with essential items such as grains and oils seeing a 9.9% increase in sales. This growth reflects a consistent demand for basic necessities amidst broader economic fluctuations. However, the restaurant sector experienced a slight decline, with revenue growth slowing to 3% from 5.4% in the previous month, indicating a potential shift in consumer spending habits towards home dining due to economic uncertainties.

4. Clothing and Footwear

The clothing and footwear sectors faced challenges, with sales declining as consumers became more cautious with discretionary spending. This decline is indicative of a broader trend where consumers prioritize essential goods over luxury or non-essential items, reflecting ongoing economic concerns and inflationary pressures.

5. Home Goods and Furnishings

Sales in the home goods and furnishings sector have also been affected, with consumers showing restraint in spending on larger items. The housing market's slowdown, characterized by declining home sales and prices, has contributed to this cautious behavior. As consumers prioritize immediate needs, spending on home improvement and furnishings has seen a decline.

6. Service Sector

The service sector, particularly travel and leisure, has benefited from increased consumer spending as restrictions ease and summer vacations prompt more travel. The service industry saw a 7.2% increase in retail sales, reflecting a growing appetite for experiences over goods. This trend highlights a potential shift in consumer behavior towards valuing experiences, particularly in the context of post-pandemic recovery.

Implications for the Federal Reserve

The robust retail sales data has prompted a reassessment of the market's outlook on potential interest rate cuts by the Federal Reserve. Initially, there was speculation about a 50 basis points rate cut; however, this has now been adjusted to a more conservative 25 basis points.Unless there is a significant deterioration in economic indicators, such as job gains falling to between no gain and 50,000 in August or the unemployment rate increasing to 4.4% or more, the Federal Reserve will likely opt for a 25 basis points rate cut in September.

Outlook for Economic Growth

The strong retail sales data has added to the positive outlook for economic growth in the third quarter. The Atlanta Fed's forecast for the third quarter was 2.9% before the data release. However, it is crucial to monitor consumer sentiment and broader economic conditions to assess the sustainability of this growth momentum.In conclusion, the July retail sales figures have defied growth concerns and underscored the resilience of the U.S. economy. While the Federal Reserve may adopt a more cautious approach to monetary easing, the overall outlook remains positive, with consumer spending continuing to drive economic expansion.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Warren Takunda

Economic

The dollar index DXY today is down by -0.16% at a 1-week low. The dollar is under pressure as today’s as-expected US Jul CPI report reinforced expectations for the Fed to cut interest rates at next month’s FOMC meeting, a bearish factor for the dollar. However, losses in the dollar are limited as expectations for a 50 bp rate cut by the Fed at the Sep 17-18 FOMC meeting were reduced to 47% today from 75% last week.

US MBA mortgage applications rose +16.8% in the week ended Aug 9, with the purchase mortgage sub-index up +2.8% and the refinancing sub-index up +34.5%. The average 30-year fixed rate mortgage fell -1 bp to a 5-month low of 6.54% from 6.55% the previous week.

US July CPI eased to 2.9% y/y from 3.0% y/y, better than expectations of no change at 3.0% y/y and the smallest year-on-year increase in over three years. July CPI ex-food and energy eased to 3.2% y/y from 3.3% y/y in Jun, right on expectations and the smallest annual increase in 3-1/4 years.

The markets are discounting the chances at 100% for a -25 bp rate cut at the Sep 17-18 FOMC meeting and at 47% for a -50 bp rate cut at that meeting.

EUR/USD EURUSD today is up by +0.38% at a 7-1/4 month high. The euro is finding support today from a weaker dollar. Also, speculation that the Fed will cut interest rates by more than the ECB is boosting the euro as swap markets have priced in 100 bp of Fed rate cuts by December, compared to only 70 bp of cuts by the ECB. Gains in the euro are limited after Eurozone Jun industrial production unexpectedly declined.

Eurozone employment eased last quarter as Q2 employment rose +0.2% q/q and +0.8% y/y, weakening from +0.3% q/q and +1.0% y/y in Q1.

Eurozone June industrial production unexpectedly fell -0.1% m/m, weaker than expectations of +0.5% m/m.

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 96% for the September 12 meeting.

USD/JPY USDJPY today is up by +0.09%. The yen is under pressure today after Japanese Prime Minister Kishida said he won't run for a second term as leader of Japan's ruling party, which creates political uncertainty in Japan. Also, today’s rally in the Nikkei Stock Index to a 1-1/2 week high reduced safe-haven demand for the yen. The yen recovered from its worst levels today after T-note yields declined.

Swaps are pricing in the chances for a +10 bp rate hike by the BOJ at 0% for the September 20 meeting and +11% for the October 30-31 meeting.

December gold today is down -10.90 (-0.43%), and September silver is up +0.019 (+0.074%). Gold and silver prices today are mixed, with silver posting a 1-week high. Reduced expectations for a 50 bp rate cut at next month’s FOMC meeting are weighing on gold prices today as swap markets have priced in only a 47% chance for a 50 bp rate cut, down from 75% last week. A negative factor for silver was today’s report that showed an unexpected decline in Eurozone June industrial production, a bearish factor for industrial metals demand.

Today’s decline in the dollar index to a 1-week low is bullish for metals prices. Also, lower T-note yields today are supportive of precious metals. In addition, safe-haven demand for precious metals remains strong as an attack by Iran on Israel may be imminent in retaliation for the recent assassination of a Hamas political leader in Tehran.

Source: BarChart

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Risk Warnings and Disclaimers

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FastBull Featured

Data Interpretation

Economic

The U.S. Bureau of Labor Statistics will release the July CPI data on August 14 (Eastern Time). The market broadly expects headline CPI for July to rise by 3% year-over-year, consistent with June's figure, and by 0.2% month-over-month. Core CPI is expected to increase by 3.2% year-over-year, slightly slowing from June's 3.3% rise, and by 0.2% month-over-month, higher than June's 0.1%.

Since March of this year, price increases in the U.S. have been showing signs of slowing, with the June CPI report surprising on the downside, continuing this declining trend. The subsequent decline in nonfarm payroll data and the unexpected rise in the unemployment rate further strengthened market expectations for interest rate cuts. As the U.S. economy and labor market show signs of fatigue, the latest inflation report will draw significant market attention and could influence the timing of a potential policy shift.

July CPI: A Major Release

Fed Chairman Jerome Powell previously hinted that rate cuts could occur as soon as September. The Fed is focusing more attention on the August nonfarm payrolls and CPI data. This report is the second-to-last CPI release before the Fed's next rate decision (in September), potentially adding weight to the prospect of a rate cut in September.

Should an unexpected upward trend emerge, it could rekindle market concerns about stagflation, as it would imply that the Fed may not be able to cut rates quickly even in the face of an economic slowdown. On the other hand, if core inflation continues to decline, it could strengthen the Fed's confidence in cutting rates while boosting investor sentiment, further fueling expectations for a 50-basis-point rate cut in September.

Housing Inflation

Housing-related costs, which account for about one-third of the CPI weight, have been one of the most stubborn components of inflation and are key to whether core inflation can decrease. Overall, although housing inflation has been slow to decline, the trend is still downward. In June, housing prices rose 0.2% month-over-month, while rent and owners' equivalent rent (OER) both rose 0.3%, all moderating from previous figures.

However, based on the latest data on new and existing home sales, the inventory of new homes for sale in the U.S. remained at a high of 476,000 units as of the end of June, enough to supply 9.3 months of demand, the longest period since October 2022. The inventory of existing homes increased by 23.4% year-over-year, enough for 4.1 months of supply, the highest in four years. Meanwhile, both new home sales and existing home sales fell more than expected, with U.S. new home sales down 0.6% and existing home sales down 5.4% month-over-month in June.

In terms of prices, new home prices remain high, and existing home prices rose 4.1% year-over-year, hitting a new record. Coupled with mortgage rates rising to an average of nearly 7% in June, affordability remains a challenge for buyers. The continued decline in mortgage applications suggests that lower borrowing costs may be necessary to stimulate demand.

In summary, on the one hand, homeowners who secured low-interest-rate mortgages before the pandemic are unlikely to sell their homes in today's high-rate environment, which reduces the supply of homes for resale and supports home prices. On the other hand, high mortgage rates and home prices are deterring buyers, while the slowdown in inflation suggests interest rates may drop in the coming months, leading more potential buyers to adopt a wait-and-see attitude or even shift to renting, thereby supporting rental market prices.

Thus, despite the ongoing deflationary trend, July's main residential rents and OER are expected to rebound moderately, supporting core inflation.

Energy Inflation

Energy prices continued to decline in June, falling 2.0% month-over-month. The significant 3.8% drop in gasoline prices was a major reason for the CPI slowdown in June, offsetting the impact of rising housing prices.

According to the American Automobile Association (AAA), as of July 31, the national average price of unleaded gasoline was $3.48 per gallon, a 0.2% decrease from the end of June and 8% lower year-over-year. AAA spokesperson Andrew Gross noted that despite hurricane impacts and record holiday travel, overall gasoline demand has decreased, an unusual phenomenon for the holiday season that may signal a shift in demand trends.

Additionally, based on the latest data from the Energy Information Administration (EIA), U.S. gasoline demand dropped from 9.25 million barrels per day to 8.96 million barrels per day. Total domestic gasoline inventories rose from 223.8 million barrels to 225.1 million barrels. The decline in demand for gasoline, combined with an increase in supply and stable oil costs, could further drive gasoline prices down.

The downward trend in gasoline prices currently appears to be persistent, which could lead to another drop in energy commodity prices. Since energy commodities account for more than 60% of the overall energy category, this reduction could lower energy inflation. It is expected that energy inflation will continue to decelerate in this upcoming report.

New and Used Vehicles

Although prices for both new and used vehicles decreased in June, the costs associated with automotive maintenance and insurance have actually risen significantly, creating a challenging environment in the automotive market.

Data from Manheim, the largest used car auction platform in the U.S., indicates that the Manheim Value Index rose to 201.6 in July, reflecting a MoM increase of 2.8% - the first uptick in ten months. Wholesale prices for used cars, adjusted for model, mileage, and seasonality, have also surpassed those of June. Furthermore, combining insights from vAuto, Manheim estimates that retail sales of used cars in July increased by 5% MoM while experiencing a 2% decline YoY.

Meanwhile, the Dealertrack Credit Availability Index reveals that the overall loan index dropped for the fourth consecutive month, landing at 92.9 in July. Access to automotive credit across all channels and lender types is diminishing. Elevated interest rates and stringent credit conditions continue to limit the industry's sales potential. Many consumers are opting to hold off or seek more affordable options, as evidenced by the rising rates of credit delinquencies and defaults.

According to Cox Automotive's automotive market report, new vehicle sales in July experienced a YoY decline of 2.0% and a MoM decrease of 3.0%. The average transaction price for new vehicles remained relatively stable compared to June, with a slight YoY decrease of 0.2%. The CDK cyberattack in June hindered many dealerships' ability to process transactions, leading to a decline in new vehicle sales for that month. The automotive dealers association anticipated this event could drive sales in July; however, it appears that July has not fully recovered the losses incurred in June.

Overall, it is expected that new vehicle prices may continue to show a downward trend, while the rate of decline for used vehicle prices is expected to narrow MoM.

Transportation Services

In the transportation services sector, after a 0.9% increase in April, there were consecutive MoM declines of 0.5% in May and June, primarily driven by fluctuations in airfare and automobile insurance premiums.

Since the onset of the COVID-19 pandemic, automobile insurance premiums have surged, becoming a significant factor contributing to the super core inflation in the U.S. According to the latest report from Insurify, the average cost of full auto insurance in the U.S. rose to US$2,329 in the first half of 2024, marking a 15% increase compared to last year and a staggering 48% rise from 2021. The escalation in car maintenance and repair costs, alongside frequent climate-related disasters, has compelled insurance companies to raise premiums to protect their profits. It is expected that insurance premiums will further increase by the end of 2024, suggesting that this segment may continue to experience substantial growth in the current data.

Airfare recorded MoM changes of -3.56% and -5% in May and June respectively, primarily influenced by a continuous decline in jet fuel prices. Although these prices experienced a temporary rebound at the end of June, peaking at US$102.75 per barrel in early July, a reversal in trend in mid to late July may indicate a further decline in airfare for that month.

Overall, considering the ongoing possibility of a slowdown in "energy inflation," it seems that the headline CPI may continue to align with the trend of easing inflation. However, slight increases in tenant rents and owners' equivalent rent, along with rising motor vehicle insurance rates, could result in a mild uptick in the MoM pace of core inflation.

It is important to note that this CPI release may differ somewhat from previous ones. The last time inflation fell to 3% was in July 2023, after which it began a rebound. As a result, there has been speculation that the "final mile" of inflation will become increasingly challenging to navigate, characterized by potential turbulence. With inflation returning to 3% again, the question of whether it will rebound like it did last year has become a central focus for the market, influencing expectations going forward.

If a rebound occurs, the market may perceive inflation as remaining sticky, and the "door" to the "final mile" of inflation might remain firmly shut, potentially dampening expectations for interest rate cuts. This could lead to a significant rebound in the U.S. Dollar Index, possibly exceeding the impacts of prior CPI results. Conversely, as long as headline inflation remains stable at 3%, there may not even be a need for rate cuts; given the market's tendency to act preemptively, this could still be viewed as a victory, resulting in a swift increase in expectations for rate reductions.

Therefore, regarding the upcoming CPI data, the primary focus should be on whether the headline CPI can stabilize at 3%.

The Fed indicated in its July interest rate decision statement that while long-term inflation expectations remain persistent, the risks of inflation rising have diminished. They reiterated that action would only be considered when there is greater confidence in inflation sustainably moving towards the 2% target.

However, the weak U.S. employment report for July has raised recession expectations and heightened concerns about maintaining interest rates at excessively high levels for too long. The market is currently pricing in a 100% chance of a rate cut in September, shifting attention to how much the Fed should reduce rates. The release of this data may lead to market speculation on whether the Fed will cut rates by 25 basis points or adopt a more aggressive stance with a 50 basis point reduction.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Warren Takunda

Central Bank

Economic

For the first time this year, inflation is on the rise. After falling fairly steadily from above 11% almost two years ago, a bump in the road back to more normal levels was always likely.

Rishi Sunak will have known this day would come. Back when he called July’s general election on that rain-soaked May afternoon, the Bank of England was already warning that inflation would rise in the second half of the year. Having staked his premiership on getting inflation down, it was one of the few compelling reasons not to delay.

The reason for the increase is down to energy prices. Although prices for gas and electricity are falling, they had been dropping by significantly more a year ago. Inflation measures price changes over 12 months, meaning those bigger declines in energy costs are dropping out of the equation.

However, the increase from 2% in June to 2.2% in July was smaller than the 2.4% reading anticipated by Threadneedle Street when it published its latest forecasts less than two weeks ago. What’s more, there is evidence that domestic inflationary pressures are cooling at a faster pace than expected.

The latest figures revealed a much sharper than forecast decline in service sector inflation, down from 5.7% in June to 5.2% in July, where prices for restaurants and hotels plunged on the month. Core inflation – which excludes volatile items including energy, food, alcohol and tobacco – also fell.

Both figures are closely watched by the Bank. Softer falls in previous months gave policymakers enough comfort earlier this month to cut interest rates for the first time since the coronavirus pandemic. Further signs of cooling could therefore open the door to another reduction in borrowing costs, with investors betting on a cut from 5% to 4.75% from as early as September.

Andrew Bailey, the Bank’s governor, may, however, want to wait for more data, such as the gross domestic product and retail sales figures released later this week. Jobs market figures on Tuesday – which showed falling unemployment and robust wage growth – will have given the Bank a headache, as they suggest there may still be lingering domestic pressures. Threadneedle Street also forecasts headline inflation will reach 2.75% by the end of the year before falling to 1.7% within two years’ time.

Despite easing inflationary pressures, households are still also feeling the pinch. Falling inflation does not mean prices are coming down, only that they are rising at a slower pace.

Food price inflation did not fall in July for the first time since March 2023, while overall grocery prices are up by more than a quarter since the onset of the cost of living crisis. Although they are coming down, gas and electricity prices are still 68% and 45% higher respectively than in March 2021.

Higher borrowing costs are also still bearing down on households. But while there may have been a bump in the path back to more normal levels of inflation, the Bank could still find reasons from Wednesday’s figures to cut interest rates again.

Source: TheGuardian

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Risk Warnings and Disclaimers

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The Conference Board

Data Interpretation

The global labor shortage crisis is here. The US economy alone needs 4.6 million additional workers per year to maintain current levels of supply, demand, and population balance.

That amounts to 2% of the US population—and shortages are even more dire elsewhere: Germany needs to find 1.6 million workers (3%), South Korea needs 2 million (5.5%), and China needs 47 million (5%).

Global Labor Market Outlook 2024, a new seven-part series from The Conference Board, examines the root causes of labor shortages; the negative effects of scarce labor on business performance and economic growth; and the number of additional workers needed to eliminate shortages and where to find them.

“According to our surveys, CEOs around the world cite labor shortages and attracting/retaining talent among the most pressing challenges keeping them up at night,” said Dana M. Peterson, Chief Economist of The Conference Board. “However, solutions to chronic labor shortages are within reach, if governments, companies, and nonprofits act together. Our new research finds that a multifaced approach—including older, younger, male, female, and immigrant workers—can bring millions more into the workforce.”

In each of its seven parts, Global Labor Market Outlook 2024 takes on defining forces driving shortages, then provides rich quantitative analysis of their impact on nearly 30 individual economies. Among the key insights:

Part 1: What’s at Stake for Businesses?

Shrinking and aging populations—plus the underutilization of available workers—are reducing the sizes of available labor pools. This risks capping firm productivity in the short run and threatening GDP growth over the long run, especially for most mature economies and select emerging markets. The shrinking working-age share of population may cut an average of 0.4 percentage points from global growth each year over the next decade.

Labor shortages are poised to keep upward pressure on wages for the foreseeable future. Companies are managing shortages by increasing wages and benefits. These labor costs are ultimately passed on to customers, keeping consumer price indexes sticky.

Part 2: Embracing a Multifaceted Approach

Adopting technology and automation are important ways for firms to compensate for missing workers—but science can get you only so far.

Immigration and greater labor force participation among the domestic population are critical to solving labor shortages in many economies. This includes implementing policies and business strategies to bring more underutilized members of society into the workforce—including women, youth, discouraged men, and seniors. Such strategies range from training and reskilling to licensing and retirement reforms.

Part 3: Immigration Is Necessary but Insufficient

Increasing the number of foreign workers and providing pathways to permanent residence is necessary but insufficient for addressing labor shortages. In addition to political controversies around migration, many economies cannot admit enough foreign workers to make up for missing workers.

Low immigration growth—and/or the failure to integrate migrants—contributes to labor shortages in many economies. After declining amid pandemic-era travel bans, immigration rebounded in most economies, but in many cases remains below historical norms. Moreover, immigration growth is anticipated to stall or materially undershoot prepandemic levels over the next decade.

Part 4: Optimizing the Older Worker Pool

Retirements are exceeding labor force entrants. Given declining birthrates—and the large size of the baby boomer generation relative to younger generations—retirements are overtaking labor market entries in nearly all mature economies, as well as several large emerging markets like China.

Extending working years by optimizing the older worker pool can help ease labor shortages. Reforming pension programs to encourage workers to work longer, more flexible work regimes, and encouraging companies to pair older, experienced workers with younger workers can add millions of people to regional labor markets.

Part 5: Maximizing Women Workers

Increasing female labor force participation can completely solve labor shortages in many economies, including the US. Strategies for doing so include upskilling, retraining, flexible work, closing wage gaps, championing familial support, and financing entrepreneurship.

Keeping women sustainably in the workforce is pivotal to maximizing the impact of women joining the labor market. Companies, governments, and families will have to work together to create incentives

such as flexibility and hybrid work—as well as proper support such as reskilling and familial support policies—for women to enter and remain in the labor market during prime working years.

Part 6: Getting Men Back into the Game

Sidelined men are a major contributor to global labor shortages. Male labor force participation has been falling in many economies due to a combination of factors, including technological advancements promoting automation, globalization, health and societal challenges, labor market segmentation, and general discouragement.

Bringing men back into the labor market is vital to solving worker shortages. There are many solutions to draw them back to the workforce sustainably, including retraining men for modern jobs, licensing reform, investing in education, addressing health and societal barriers to work, and encouraging men to use corporate benefits and employee resources.

Part 7: Motivating Youth

Low youth labor force participation is stoking shortages. Labor force participation is falling, even among youth. Some of this is due to extended schooling, but skills mismatches, differing tastes in work culture, and disaffection and discouragement are also at play.

Facilitating full-time youth labor force participation during breaks from school or part-time jobs during school can help alleviate labor shortages.In many economies, shortages are the most acute in low-wage services jobs that are ideal for young, unskilled, and inexperienced workers. Filling this gap will require reforming inflexible labor laws that currently depress part-time and seasonal work opportunities for teenagers and students.

Public-private partnerships can enhance job prep and boost youth labor force participation. Companies can collaborate with schools, individuals, nonprofits, and governments to establish internships, apprenticeship programs, and hands-on training and skills development to build talent pipelines for young adults.

Risk Warnings and Disclaimers

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Data Interpretation

Economic

The deep sell-off that gripped Wall Street two weeks ago was short-lived. The volatility was triggered by a Bank of Japan rate increase that drove up the yen and rattled global markets. In the U.S., weaker-than-expected jobs data piled on, stoking fears of a recession and extending the market downturn.

But by Friday, Aug. 9, the S&P 500 Index had all but returned to its closing level from the Friday before. A week of losses was erased.

The speed of Wall Street’s dive and recovery is at odds with the slowness of data that signal changes in the real economy.

Main Street establishments move at a slower pace than Wall Street’s market makers, speculators, and investors. And Main Street employment trends sometimes can be drowned out by the cacophony of monthly jobs data.

In fact, the Main Street economy continues to grow. While Wall Street licks its wounds, let’s take a look at some small business data.

High-propensity start-ups are increasing

Over the last four years, the Census Bureau has documented a surge in new business applications.

Between June 2020 and June 2024, new business applications averaged 440,799 a month, up from just 269,913 a month in the four years preceding the pandemic.

About a third of those applications are from high-propensity businesses. Census defines high-propensity businesses as start-ups with a likelihood of becoming employers with a payroll. These are Main Street’s job creators.

In the second quarter of 2024, high-propensity business applications were up 28 percent from the second quarter of 2019.

Banks are lending

One thing Main Street and Wall Street can agree on is the benefit of low interest rates. Cheap borrowing cuts costs and increases demand for loans.

In tandem with Federal Reserve interest rate increases, banks have been tightening lending standards for borrowers of all sizes. But while large companies can obtain financing in the stock and bond markets, most small employers are dependent on bank loans to grow their businesses.

The Federal Reserve’s Senior Loan Officer Opinion Survey last week was a light at the end of a long, dark tunnel for these small businesses. It found that the share of U.S. banks that tightened standards on small business loans fell to 8.2 percent in the third quarter, down from 19.7 percent in the second quarter and the lowest share since 2022.

Lending standards are likely to ease further when the Federal Reserve cuts its benchmark interest rate. That should tamp down financing costs and enable Main Street to continue its hiring growth.

Mom-and-pops are still hiring

The ADP National Employment Report has tracked hiring by small employers since 2010. In the first seven months of 2024, establishments with fewer than 20 employees hired 133,000 people. That’s a tremendous downshift in hiring from the same period a year ago, when these employers created 532,000 jobs.

One reason small employers hired aggressively in 2023 was because they had had difficulty competing with large companies in 2021 and 2022, as the economy recovered and demand for labor took off. As larger employers slowed hiring in 2023, smaller ones stepped in, aggressively rebuilding headcount lost during the pandemic.

Main Street hiring now is back to its normal pre-pandemic pace. The smallest establishments have created 133,000 new jobs so far this year, up from the 128,000 jobs they added during the first seven months of 2019.

What’s more, labor costs are returning to pre-pandemic levels. Median annual pay growth at small employers peaked in September 2022 at 5.6 percent for workers in the same job for a year or more, the job-stayers we track in our monthly Pay Insights report.

And while small employers tend to increase pay more slowly than large companies, they’re still growing wages faster than the current pace of inflation. In July, pay for job-stayers at small employers was up 4.1 percent year-over-year.

opinion

While Wall Street is quick to react to data signals, Main Street responds to on-the-ground economic conditions, which take longer to decipher.

And instead of focusing on theory and historical regularities, the way economists do, small business owners ask questions: Is it easier to get a loan? How quickly can I add staff? Am I seeing less turnover? Are my labor costs rising faster than revenues?

These questions take longer to answer, and those answers provide a more enduring sign of the economy’s trajectory than wild stock market swings.

The Week Ahead

Wednesday: With all eyes on September’s meeting of Federal Reserve policymakers, the Consumer Price Index measure of inflation, also from the BLS, will be the most important indicator of the week, or maybe even the year.

Thursday: After disappointing in June, retail sales data for July from the Census Bureau will help economists decipher whether consumer spending is still supporting growth in the third quarter.

Friday: Falling mortgage rates have been one bright indicator for Main Street lately. Residential construction data from Census might bring more good news that the housing market is starting to right itself after a streak of low inventory and high interest rates.

To stay updated on all economic events of today, please check out our Economic calendar

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Part 2: Embracing a Multifaceted Approach

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Part 4: Optimizing the Older Worker Pool

Part 5: Maximizing Women Workers

Part 6: Getting Men Back into the Game

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Wall Street Threw A Tantrum, But Main Street Carried On

High-propensity start-ups are increasing

Banks are lending

Mom-and-pops are still hiring

opinion

The Week Ahead

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