MarketWatch (May 30)
“Rising gas prices and inflation are causing a majority of U.S. households to fall behind financially… and the longer the situation goes on, the more stress it will place on the economy.” According to Gregory Daco, chief economist at EY Parthenon, the U.S. expansion is supported by a fragile pillar formed by “Three A’s,” namely “Affluent consumers, AI investment and Asset appreciation.” This pillar “masks an important reality. A huge swath of middle-class and lower-income families with little or no savings in stocks have not benefited much from the bull market or the AI boom.”
Tags: Affluent consumers, AI boom, AI investment, Asset appreciation Savings, Bull market, Daco, Economist, Economy, Expansion, Fragile, Gas prices, Households, Inflation, Pillar, Stocks, Stress, Three A’s, U.S.
NBC News (April 15)
“Oil prices have started to slip — but not necessarily for reasons that suggest a return to market normalcy.” According to the IEA, “demand destruction” is resulting from “the acute energy commodity shortages stemming from the closure of the Strait of Hormuz.” Oil is now at the “point where it is now so expensive that overseas businesses and households have begun curbing investment and consumption.”
Tags: Acute, Businesses, Closure, Demand destruction, Energy commodity, Expensive, Households, IEA, Investment, Market normalcy, Oil prices, Overseas, Shortages, Slip, Strait of Hormuz
Wall Street Journal (February 19)
Last week, several economists at the Federal Reserve Bank of New York “found that American households and businesses are bearing nearly 90% of the cost of the Trump tariffs, contrary to Mr. Trump’s claim that foreigners will pay.” This week, a defensive White House tried to fight back and sully the research. “If the tariffs are such an unambiguous economic and political winner, why is the Administration so defensive about them…. Clearly the White House is worried that voters might conclude this research aligns with their own experience.”
Tags: Businesses, Cost, Defensive, Economists, Foreigners, Households, New York Fed, Research, Trump tariffs, U.S., Voters, White House, Worried
Fortune (October 24)
“Some economists have called the “K shaped economy.” Affluent households continue to spend freely on travel, entertainment, and premium goods, keeping service-sector inflation stubborn. Lower- and middle-income consumers, by contrast, are pushing back, trading down, stretching budgets, or delaying purchases altogether.”
Tags: Affluent, Consumers, Economists, Entertainment, Households, Inflation, K shaped economy, Middle-income, Premium goods, Service-sector, Spend, Travel
Market Watch (May 17)
“President Donald Trump’s move to defuse an ugly trade war with China not only sparked a massive stock-market rally but also drove down the chances of a recession — for now.” Though it’s a welcome sign of relief, numerous obstacles remain. Nobody can rest assured. “Ongoing trade wars have not gone away, for one thing. Trump could change his mind or the U.S. could fail to strike more economic-friendly deals with China, after that 90-day pause, and other countries.” Moreover, the uncertainty has “made households and business hesitant to spend, hire and invest. Confidence has plunged in the past few months, and anxiety is unlikely to fade quickly.” U.S. growth remains likely “to taper off sharply this year.”
Tags: 90-day pause, China, Confidence, Deals, Defuse, Hire, Households, Invest, Obstacles, Recession, Relief, Spend, Stock-market rally, Trade war, Trump, U.S., Ugly, Uncertainty
Reuters (March 26)
“Thanks to advances in AI, chips and hardware, the United States and China are now racing to develop humanoid robots that can be deployed in factories, restaurants, hospitals and even households. Nvidia CEO Jensen Huang recently declared that in less than five years, humanoid robots will be widely used in manufacturing.” At the moment, “China has shaky upper hand in battle of the robots” and tremendous motivation to succeed. The country faces a tremendous “labour crunch: in 2021 officials forecasted a shortage of nearly 30 million manufacturing workers by 2025” and this is projected to grow worse as China’s workforce continues to contract.
Tags: AI, Battle, China, Chips, Crunch, Factories, Hardware, Hospitals, Households, Huang, Humanoid, Labour, Manufacturing, Nvidia, Restaurants, Robots, Shortage, U.S.
International Banker (December 18)
If Japan’s Financial Services Agency and the nation’s “asset-management industry work together to establish ‘customer-oriented business operations’, they may succeed in gaining the trust of retail investors, and the financial assets of Japanese households may finally show a visible shift from cash and deposits to securities.” Two decades of failed efforts starting with the Big Bang financial reform suggest “it will take much effort to gain the trust of retail investors, some of whom have experienced disappointing returns in the past. Unless the Japanese financial industry works harder than ever for customers’ interests, the goal of ‘savings to investments’ will turn out to be elusive once again.”
Tags: Asset-management industry, Big bang, Customer-oriented, Disappointing, Elusive, Failed, Financial assets, Financial Reform, FSA, Households, Investments, Japan, Retail investors, Securities, Trust
Financial Times (October 30)
Empty housing poses an increasing threat to both Japan and China. The former already grapples with surplus units while the latter “may already have enough housing to meet its future needs.” Nomura Research Institute has forecast that in Japan, “even as the number of empty units roughly doubles between 2023 and 2038, construction will add more than 8mn new ones.” Due to the rise of single person households, the total number of households will only peak next year. From that point, “the housing surplus will rise more acutely and the downward pressure on property prices strengthen.” The major demographic issue facing China, “may be how to avoid a Japan-style property crisis.”
Tags: China, Construction, Demographic, Downward pressure, Empty, Households, Housing, Japan, NRI, Peak, Property crisis, Surplus, Threat, Units
Barron’s (December 10)
As it attempts to address inflation without derailing the recovery (or worse), the Fed will be walking a tight rope. On the upside, “the banking system is now both better capitalized and less exposed to illiquidity risk than in the past.” Moreover, “both households and firms are in better shape to weather higher interest costs now than they were in 1981 or, indeed, other episodes of monetary tightening.”
Tags: Banking system, Capitalized, Derailing, Exposed, Fed, Firms, Households, Illiquidity, Inflation, Interest costs, Recovery, Risk
The Guardian (September 28)
“Queues at the petrol pumps are never a good look for a government. They are especially bad in a pandemic, when so many people already have reason to feel anxious.” Panic buying comes natural after “gas price rises that have led to around 2m households losing their energy supplier” and “empty shelves in supermarkets…. There is a palpable sense that Britain is careering from one crisis to another.”
Tags: Anxious, Careening, Crisis, Empty shelves, Energy, Gas, Government, Households, Pandemic, Petrol, Prices, Queues, Rises, Supermarkets
