Job openings plunge to lowest level in 2 years in welcome news for Fed

Published

2 years ago

September 1, 2023

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Businesses posted far fewer open jobs in July and the number of Americans quitting their jobs fell sharply for the second straight month, clear signs that the labor market is cooling in a way that could reduce inflation.

The number of job vacancies dropped to 8.8 million last month, the Labor Department said Tuesday, the fewest since March 2021 and down from 9.2 million in June.

Yet the drop appeared to be even steeper because Junes figure was initially reported as 9.6 million.

That figure was revised lower Tuesday.

Julys figure was still healthy historically before the pandemic the number of openings had never topped 8 million.

And there are still roughly 1.5 available jobs for each unemployed worker, which is also elevated but down from a peak last year of 1.9.

While it might take more time, more applications, and stronger job interview performances to land a job than it did in 2021 and 2022, there are still plenty of jobs going unfilled, said Julia Pollak, chief economist at ZipRecruiter.

Fewer Americans also quit, with 3.5 million people leaving their jobs last month, down from 3.8 million in June, the lowest since February 2021.

Most Americans quit work for other, better-paying jobs, and during and after the pandemic there was a big spike in quitting as workers sought higher pay and benefits elsewhere.

A separate report Tuesday also showed that consumers were less confident in the economy last month, a trend that could cool consumer spending in the coming months.

The Federal Reservewill likely welcomeTuesdays data, because fewer job openings and less quitting reduces pressure on employers to raise pay to find and keep workers.

Pay raises are great for employees, but they can also lead companies to increases prices to offset the higher labor costs, which can push up inflation.

Evidence that the economy is slowing, on top of a steady decline in inflation from its peak of 9.1% in June 2022 to 3.2% last month, could prompt the Fed to skip a rate hike at its next meeting in September.

Federal Reserve Chair Jerome Powell and other Fed officials have hoped that a steady drop in the number of job openings could help bring down inflation, without requiring the layoffs that many economists have warned would be necessary to rein in prices.

So far, job openings have declined substantially without increasing unemployment a highly welcome but historically unusual result that appears to reflect large excess demand for labor, Powell said in a high-profile speech Friday at the Feds annual conference in Jackson Hole, Wyoming. But it isnt clear whether the decline will persist, he said, and this uncertainty underscores the need for agile policymaking.

Later this week, the government will issue its jobs report for August, which economists forecast will show that employers added 170,000 jobs this month.

While that would be a solid increase, it would be the smallest in almost three years, and also point to a potential softening in the economy.

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Investors descend on Trump’s golf club for $148m meme coin dinner amid protests

Published

4 mins ago

May 23, 2025

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Investors descend on Trump's golf club for 8m meme coin dinner amid protests

Donald Trump hosted a dinner for investors in his meme coin on Thursday, as critics warned the US president was putting personal profit first.

Some 220 of the biggest investors in the $TRUMP meme coin descended on the exclusive dinner at Mr Trump’s private country club in Northern Virginia.

As the US president arrived, more than a hundred protesters at the Trump National Golf Club held signs that included “America is not for sale”, “stop crypto corruption” and “release the list”.

Massachusetts senator Elizabeth Warren described the dinner, where the US president spoke for about half an hour before dancing to the song YMCA, as an “orgy of corruption”.

Access to the dinner, and the president, was earned by purchasing enough of his $TRUMP meme coin to secure a seat.

The White House insisted Mr Trump would attend the event “in his personal time”, but the lectern he stood behind had the presidential seal.

NBC News reported that during his remarks, Mr Trump did not unveil any new crypto policies but spoke in support of a potential bitcoin reserve and then left promptly afterward.

In total, investors spent an estimated $148m (£110m), with the top 25 holders of the coin spending more than $111m (£82.56m), according to crypto intelligence firm Inca Digital.

A company controlled by the Trump family, and a second firm, hold 80% of the remaining $TRUMP coins and have so far earned $320.19m (£238.14m), including at least $1.35m (£1m) after the dinner announcement, according to blockchain analytics firm Chainalysis.

‘Trump a very successful businessman,’ says White House

According to blockchain analysis, more than half of the 220 holders who attended the black-tie event are likely based outside the US.

This has led to claims the US president has auctioned off access to himself to foreign investors for personal gain.

In response to criticisms about Mr Trump using his office to enrich himself from the meme coin, White House press secretary Karoline Leavitt said: “All of the president’s assets are in a blind trust, which is managed by his children.

“And I would argue, one of the many reasons that the American people re-elected this president back to this office is because he was a very successful businessman before giving it up to publicly serve our country.”

Who was on the guest list?

One of those attending was China-born crypto entrepreneur and billionaire Justin Sun.

He won first place in the dinner contest with his $18.5m (£13.76m) wallet of the Trump meme coin and is the largest publicly known investor in the family’s crypto platform – which has made them hundreds of millions of dollars.

Mr Sun posted videos of himself visiting parts of the White House complex on Wednesday, and on Thursday of Mr Trump at the dinner event.

In February, the US Securities and Exchange Commission paused a 2023 fraud case against him, citing public interest.

However, the identities of the majority of the coin holders attending the event remain unknown.

Of those going, one was simply known as Ogle, a crypto security specialist who appears in video interviews with his face covered by a bandana and sunglasses.

He says this is to protect his identity.

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Even some pro-Trump crypto voices worried his personal involvement may hurt efforts to establish credibility.

“It’s distasteful and an unnecessary distraction,” said Nic Carter, a Trump supporter and partner at the crypto investment firm Castle Island Ventures.

“We would much rather that he passes common sense legislation and leave it at that.”

The event was capped off with an after-party, called “Meme The Night,” thrown by a Singapore-based meme-coin engagement company called MemeCore.

Business

Economy will have to be ‘strong enough’ for U-turn on winter fuel, business secretary says

Published

4 mins ago

May 23, 2025

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Economy will have to be 'strong enough' for U-turn on winter fuel, business secretary says

The economy will have to be “strong enough” for the government to U-turn on winter fuel payment cuts, the business secretary has said.

Jonathan Reynolds, talking to Beth Rigby on the Electoral Dysfunction podcast, also said the public would have to “wait for the actual budget” to make an announcement on it.

You can listen to the full interview on tomorrow’s Electoral Dysfunction podcast.

Sir Keir Starmer said on Wednesday he would ease the cut to the winter fuel payment, which has been removed from more than 10 million pensioners this winter after it became means-tested.

He and his ministers had insisted they would stick to their guns on the policy, even just hours before Sir Keir revealed his change of heart at Prime Minister’s Questions.

But Mr Reynolds revealed there is more at play to be able to change the policy.

“The economy has got to be strong enough to give you the capacity to make the kind of decisions people want us to see,” he said.

“We want people to know we’re listening.

“All the prime minister has said is ‘look, he’s listening, he’s aware of it.

“He wants a strong economy to be able to deliver for people.

“You’d have to wait for the actual budget to do that.”

What are the options for winter fuel payments?

The Institute for Fiscal Studies has looked into the government’s options after Sir Keir Starmer said he is considering changes to the cut to winter fuel payment (WFP).
The government could make a complete U-turn on removing the payment from pensioners not claiming pension credit so they all receive it again.
There could be a higher eligibility threshold. Households not claiming pension credit could apply directly for the winter fuel payment, reporting their income and other circumstances.
Or, all pensioner households could claim it but those above a certain income level could do a self-assessment tax return to pay some of it back as a higher income tax charge. This could be like child benefit, where the repayment is based on the higher income member of the household.
Instead of reducing pension credit by £1 for every £1 of income, it could be withdrawn more slowly to entitle more households to it, and therefore WFP.
At the moment, WFP is paid to households but if it was paid to individuals the government could means-test each pensioner, rather than their household. This could be based on an individual’s income, which the government already records for tax purposes. Individuals who have a low income could get the payment, even if their spouse is high income. This would mean low income couples getting twice as much, whereas each eligible house currently gets the same.
Instead of just those receiving pension credit getting WFP, the government could extend it to pensioners who claim means-tested welfare for housing or council tax support. A total of 430,000 renting households would be eligible at a cost of about £100m a year.
Pensioners not on pension credit but receiving disability credits could get WFP, extending eligibility to 1.8m households in England and Scotland at a cost of about £500m a year.
Pensioners living in a band A-C property could be automatically entitled to WFP, affected just over half (6.3m).

Chancellor Rachel Reeves has committed to just one major fiscal event a year, meaning just one annual budget in the autumn.

Autumn budgets normally take place in October, with the last one at the end of the month.

If this year’s budget is around the same date it will leave little time for the extra winter fuel payments to be made as they are paid between November and December.

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Pressure builds on Reeves as borrowing rises ahead of spending review

Published

4 mins ago

May 23, 2025

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Pressure builds on Reeves as borrowing rises ahead of spending review

The Chancellor borrowed more than expected at the start of the new tax year, piling more pressure on the public finances ahead of next month’s spending review.

Data from the Office for National Statistics (ONS) showed estimated net borrowing of £20.2bn in April – higher than the £17.9bn forecast by economists and the fourth highest April total on record.

That was despite a £1.7bn projected boost from employer national insurance contributions – hiked in October’s budget to help get the public finances in order and which kicked-in on 6 April.

The main reasons for the rise in borrowing included increases in public sector pay, along with higher benefits and state pensions, the ONS said.

Money latest: How travel insurance cost can surge

The data will do nothing to ease nerves over the state of the nation’s coffers amid renewed concerns Rachel Reeves may be forced to act again, in the autumn budget, to meet her own “non-negotiable” fiscal rules.

They say she must balance day-to-day spending with revenues by 2029-30, while improving public services and targeting accelerated economic growth.

The Chancellor was forced to restore a £10bn buffer at the spring statement in March, led by planned welfare curbs, after the economy flatlined.

A further restoration of headroom may be on the cards in October, given that stronger growth in the first quarter of the year is forecast to prove elusive across the rest of 2025.

The run-up to next month’s spending review – which sets budgets for government departments – has been dominated by a political row over one of her first actions in the role, which saw universal winter fuel payments stopped.

Prime Minister Sir Keir Starmer confirmed on Wednesday that a U-turn, of sorts, is on the cards.

The prospect of a higher bill ahead will do nothing to ease the cost of servicing government debt, with bond market investors continuing to demand a higher premium to hold UK gilts.

Their concerns include not only the forecasts for slowing growth but also persistent inflation.

One good bit of news for Ms Reeves was a downwards revision by the ONS to its government borrowing figure for the last financial year.

The total dropped by almost £4bn to £148.3bn.

The shift was explained by higher tax receipts but the sum still remained about £11bn above the updated forecast by the Office for Budget Responsibility.

Darren Jones, chief secretary to the Treasury, said of the ONS figures: “After years of economic instability crippling the public purse, we have taken the decisions to stabilise our public finances, which has helped deliver four interest rate cuts since August, cutting the cost of borrowing for businesses and working people.

“We’re fixing the NHS, with three million more appointments to bring waiting lists down, rebuilding Britain with our landmark planning reforms and strengthening our borders, delivering on the priorities of the country through our plan for change.”

There is a growing school of thought that Ms Reeves will need to raise taxes in October if she is to meet her commitments, including her fiscal rules.

Lindsay James, investor strategist at wealth management firm Quilter, said: “The decision to hold off on tax rises in the spring budget increasingly looks like a temporary reprieve.

“As borrowing continues to outstrip forecasts and debt interest costs remain elevated, pressure is building on the chancellor to make tougher choices.”