Category: ESTA News

Despite recent record inflation, the US labor market is being evaluated as robust, but more than half of US wage earners have experienced a fall in real wages because of inflation, a new survey found.

According to Reuters, economists affiliated with the Federal Reserve Bank of Dallas said in a report that 53.4% ​​of workers recorded wage increases between the second quarter of last year and the second quarter of this year, lower than the 8.6% increase in the consumer price index (CPI) in urban areas.

“The tight labor market has made wage growth stronger, but for many workers, wages have lagged behind inflation,” economists said. Among those with lower real wages, the median wage decline was 8.6%.

This is not the only time real wages have declined in the past 25 years, but the report’s assessment is that the current situation is unprecedented given the difficulties faced by workers. The median real wage decline over the past 25 years was 6.5%, and the average rate of decline was between 5.7% and 6.8%.

In the midst of this, New York Fed President John Williams said in a speech the previous day that the unemployment rate is expected to rise from 3.7% to 4.5% next year. He also said that the damage caused by high inflation depends on income, and that “those who have the least ability to consume essential goods such as food, energy and housing suffer the most.”

San Francisco Fed President Mary Daley said today there is room for better balance in the labor market without clearly slowing the economy.

Among these, some say that overheating in the labor market has begun to subside as the number of job vacancies announced by the Federal Ministry of Labor in August was 10.1 million, down 10% from the previous month, resulting in a loss of about 1 million jobs.

The New York Stock Exchange rose sharply on the first trading day of October on the back of the easing of the interest rate burden.

On the 3rd (local time), the Dow Jones Industrial Average of the New York Stock Exchange finished trading at 29.490.89, up 765.38 points (2.66%) from the previous day.

The Standard & Poor’s (S&P) 500 index rose 92.81 points (2.59%) to 3,678.43, and the tech stock Nasdaq index rose 239.82 points (2.27%) to close at 10,815.44, respectively.

Last month, the New York stock market succeeded in rebounding sharply after the worst month since March 2020, in the early stages of the novel coronavirus (COVID-19) outbreak.

On the previous trading day, the 30th of last month, the Dow and S&P 500 were pushed back to their November 2020 levels.

The driving force behind the reversal was the stabilization of US Treasury yields.

The 10-year U.S. Treasury yield, which once broke through the 4% level last week, fell to the 3.65% level today due to the aggressive tightening stance of the US central bank, the Federal Reserve, and the aftermath of the UK tax cut. It plunged 0.15 percentage points in just one day from 3.802% on the previous trading day.

The decline in 10-year Treasury yields, which are widely used as benchmarks for market interest rates, including mortgages (mortgage loans), supported the sentiment toward risky assets such as stocks.

It is analyzed that the Wall Street prediction that the Fed, which declared that there will be no rate cut until next year, will eventually change its monetary policy amid concerns about an economic downturn, has lowered the US Treasury yield.

Sam Stovall, chief investment strategist at CFRA Research, told CNBC: “The fact that the S&P 500 fell more than 9% in September and the ISM index was weaker than expected, so people are speculating that the Fed may not be as aggressive as it is now. “As a result, government bond yields have fallen and the dollar has weakened,” he said.

Semiconductor stocks, which had the worst slump this year, such as Intel (4.7%), AMD (4.3%), and Nvidia (3.1%), changed the mood, and oil refining stocks were driven by a surge in international oil prices by around 5% due to the announcement of large-scale production cuts in oil producing countries. also went up at once.

However, it is still unclear whether the day’s rebound will lead to a trend rise or just a bear market rally (short-term rebound in a bear market).

The Fed’s ‘third-person’ John Williams, president of the Federal Reserve Bank of New York, said in a speech to the Hispanic Chamber of Commerce in Phoenix that it would take a long time to get inflation back to its 2% target given the underlying inflation pressures. is not over yet,” suggesting that the austerity stance can be maintained for a long time, contrary to market expectations.

The U.S. Centers for Disease Control and Prevention (CDC) announced on the 3rd that it will not issue travel advisories related to COVID-19 in the future.

“There are fewer and fewer countries testing or reporting confirmed cases of COVID-19,” the CDC said in a statement.

During the COVID-19 pandemic, the CDC has divided travel warnings into four levels according to the COVID-19 situation in each country.

In February, the travel alert for Korea was upgraded from ‘Level 3: High’ to ‘Level 4: Very High’. Level 4 is the area the CDC recommends avoiding travel to.

However, two months later, the CDC lowered the COVID-19-related travel warning for 90 countries, including South Korea, from Level 4, the highest level, to Level 3. couldn’t pull

The CDC said, “We will issue a travel advisory for the country only if circumstances are identified that require changes to travel recommendations, such as the spread of COVID-19 mutations.”

Washington State officials will receive an annual salary increase and a $1,000 each as a covid-19 booster shot bonus, the civil servants’ union announced.

The Washington State Confederation of Public Officials (WFSE) said the state has agreed to a 4% increase in salaries next year, 3% in 2024, and an additional $1,000 bonus to employees who serve until July 1 next year.

The highlight of this labor-management negotiation is the booster shot bonus.

Earlier this month, Governor Jay Insley emphasized that all his emergency executive orders related to the pandemic, including mandatory vaccinations for health and education officials, will be lifted at the end of October, but the compulsory vaccination measures for most state government officials will remain in effect. did.

Governor Inslee issued an emergency executive order in September last year, obliging all state officials to complete their first and second vaccinations by October, with the exception of a very small number of unavoidable cases. or got fired.

Governor Jamie Smith, spokeswoman for the Governor’s Office, said the “booster shot” bonus was taken “in light of the opinions and recommendations of state officials and labor groups.”

WFSE represents approximately 47,000 state officials, including prison guards, university professors, nurses and sanitation workers. However, according to the WFSE, the contents of the wage negotiation agreement apply only to about 35,000 union members.

In this labor-management negotiation, WFSE said that it won the largest compensation in the history of the union, such as a salary increase as well as a booster shot and a job retention bonus, and asked union members to confirm it through a vote.

WFSE, a longtime supporter of the Democrats, has sent 64 to the Central Committee to support Democratic candidates at all levels over the past five years, including a $210,000 donation to the Washington State Democratic Central Committee in 2012, when Insley first ran for governor. It was reported that he had donated $5,000.

As a result, the Central Committee was recorded as the organization that paid the most money every time Insley held three consecutive elections.

As the November midterm elections are about a month away, Google searches show that immigration and border issues have overtaken abortion issues.

Internet media Axios analyzed Google Trends data from May 23rd to August 8th and September 8th to 20th. As a result of the main search volume on September 12th, border and immigration issues ranked 10th, inflation 15th, Abortion ranked 18th each, it was reported on the 22nd.

The abortion issue came in second after jobs as searches surged on the Internet right after the Supreme Court overturned the Ro v. However, interest continues to decline, except in mid-August, when abortion bans were automatically implemented in some states, including Texas.

On the other hand, the interest in border and immigration issues has been steadily increasing in recent years.

It is analyzed that the controversy sparked after Texas Governor Greg Abbott and Florida Governor Ron DeSantis sent illegal migrants from the South to the North, where Democrats held elected offices in protest of the Biden administration’s immigration policy.

It is estimated that a total of 13,000 illegal immigrants have been sent to Washington, DC, New York, and Chicago so far, some have been transferred to the residence of Vice President Kamala Harris, and the controversy is spreading as the Democratic Party criticizes it as a human rights violation.

Governor DeSantis, one of the Republican presidential nominees, has shown his determination to continue deporting illegal immigrants, and the impact on the November midterm elections remains to be seen.

After the Supreme Court ruling, the rallying of women and progressive voters on the issue of abortion as a link has been observed more predominantly, as it may bring about a change in this trend.

In the four re-elections held since the end of June, for example, the Democratic candidates were counted as receiving nearly 5 percentage points more votes than Joe Biden received in the region in the 2020 presidential election.

As a result, there are speculations that the Democrats will lose the House of Representatives by a smaller margin than expected, along with the possibility that the Democrats will win the Senate in this midterm election. This means that the situation has improved compared to the initial forecast as the abortion issue arose.

However, as immigration and border issues are controversial and attracting the attention of voters, interest is being drawn on how they will affect votes.

Meanwhile, a court in Indiana has issued a preliminary injunction against the recently implemented abortion ban, the Associated Press reported on the same day. Accordingly, the current law that allows legal abortions up to 22 weeks of pregnancy will be maintained for the time being.

Indiana was the first state to enact and enforce a de facto outright ban on abortion after a Supreme Court ruling.

Republican governors in the southern United States are debating the deportation of illegal immigrants to northern Democrats.

Florida Governor Ron DeSantis, one of the leading contenders following Texas Governor Greg Abbott, recently chartered about 50 illegal immigrants from Venezuela to Marthas Vineyard, a wealthy resort town in Massachusetts, sparking controversy.

Ahead of the November midterm elections, major Democrats have been criticizing the Republican governors’ position as a protest against the Joe Biden administration’s immigration and border policies and to highlight the issue of illegal immigration.

New York City Mayor Eric Adams, a Democrat, said in an interview with CNN on the 18th (local time) that “we need to make it clear that this is a humanitarian crisis created by human hands.”.

“We have to work together,” Adams said.

According to the state of Texas, more than 2,500 illegal immigrants have been transferred from Texas to New York City so far.

In response, Mayor Adams denounced Abbott and DeSantis as “exemplifying fundamental human rights violations by treating people in an inhuman way.”

Some migrants who arrived in New York were dehydrated or not provided with adequate food, Mayor Adams said, as the state of Texas sent confirmed COVID-19 patients on the same bus as other immigrants. He added: “Some of the immigrants had tags attached to them like animals.”

Senate Democrat Minority Leader Dick Durbin (Illinois) also criticized Republican governors in an interview with NBC on the same day.

“It’s pathetic that [Republican] governors took advantage of powerless people,” Durbin said, noting that they torture illegal immigrants for political purposes.

He then emphasized that the issue of illegal immigration “may pose a political risk” to the Democratic Party ahead of the midterm elections, but that this issue must be resolved.

Earlier, President Biden said to DeSantis and Governor Abbott on the 15th, “What they are doing is wrong and it is not American.”

Republicans defended DeSantis and Governor Abbott, reaffirming their position that the problem of illegal immigration was caused by the federal government.

Senator Mike Rounds of South Dakota, Republic of Korea, told CNN that the governors are “doing their best to inform people about the hardships of those crossing the southern border.” “Governors are letting them know that this is unacceptable and that it is an issue that cannot be addressed at the state level,” he said.

California Governor Gavin Newsom has announced that he has signed a bill calling for transparency in social media companies.

The law, known as ‘AB-587’, requires social media companies to publicly post policies on hate speech, disinformation and extremism on their platforms and report them to the state Department of Justice every six months.

The law was enacted in response to criticism that social media has promoted extremism and violence in the wake of the riots in the US Congress on January 6 last year.

“We will not allow social media to be weaponized to spread hate and disinformation that threatens the fundamental values ​​of our communities and our nation,” Governor Newsom said in a statement.

He added that he expects this measure to bring transparency and accountability to social media content shaping policies.

However, the bill is expected to provoke backlash from big tech companies and related industries, Reuters reported.

He also explained that the bill is expected to be controversial in terms of protecting press freedom.

Last year, the state of Texas signed legislation preventing social media from restricting users or posts based on their views.

Big Tech filed a lawsuit, and in May, the Supreme Court ruled in favor of Big Tech.

The nightmare of Hurricane Ida, which scratched the New York area a year ago, has been revived, including flooding of semi-subterranean houses in some areas of Queens due to sudden torrential rains in New York City at the dawn of the 13th.

According to New York City, the torrential rains caused flooding of low-lying homes and roads in Queens, Brooklyn, and Staten Island.

Flood damage occurred again in the semi-subterranean residential area of ​​Queens, where the damage was concentrated in Ida last year, such as Woodside and Whitestone, Queens. A semi-subterranean house in Woodside was flooded with over 6 feet of rain in an instant, and over 5 feet of water rushed into a semi-subterranean house and parking lot in Whitestone.

Nancy Valero, a tenant of the semi-basement house, said, “We didn’t evacuate after hearing the emergency alert, but after hearing the cry of a baby. When he got out of bed and put his feet on the floor, he could already feel the water,” he said, explaining the tense situation at the time.

Road flooding was also serious, but major highways such as Queens I-495 (Long Island Express), Cross Island Parkway, Clearview Expressway, Grand Central Parkway, and Banwick Expressway were temporarily closed due to heavy rain early this morning.

In the case of 108th Street adjacent to I-495, backflow rainwater pushed up the manhole cover, flooding the area and stopping vehicle traffic altogether. Public transport was also suspended or delayed due to heavy rain. According to the MTA, trains C, L and R have been suspended or partially suspended.

There were also power outages. Thousands of homes in Queens and Brooklyn have lost electricity, according to Corn Edison.

The Wall Street Journal (WSJ) reported on the 28th that, thanks to the development of information technology (IT) in the United States, so-called “Laptop Landlords”, which buy and rent houses in remote places that have not been visited before, are increasing online.

According to the report, New York City resident Jack Cronin, 28, had never visited Jackson, Mississippi, but bought a three-bedroom home in the area for $265,000. And he’s taking in tenants he’s never met, and he’s getting $2,300 a month in rent.

Laptop owners like Cronin are usually high-income IT professionals in metropolitan areas. They view rental property ownership as a key investment vehicle along with stock and bond investments. The rise in laptop homeowners is also due to advances in technology that have simplified this process and made it possible to buy a home online, the WSJ said.

For example, data service providers provide detailed information on housing purchases, such as sales prices, local crime rates and school status, and online real estate companies such as ‘Loopstock’ and ‘Affiliate’ connect the manager. Content publishers and online forums also provide investment strategies and advice. “Everything is possible online,” said real estate consultant John Burns.

According to Core Logic, a real estate information company, the proportion of investment home purchases in total single-family home sales increased from 17% in February last year to 28% in February this year.

Individuals like Cronin or small businesses with 10 or fewer homes accounted for about half of all investment home purchases. The areas where professionals invest mainly were large cities in the southern region with many low- and middle-income tenants.

According to ‘Atom Data Solutions’, a real estate information company, the proportion of investors from other states in total home sales in the first half of this year was in southern regions such as Raleigh, North Carolina (4.24%), Atlanta, Georgia (5.26%), and Memphis, Tennessee (8.61%). Big cities are much higher than average.

As such, as laptop owners living in other states are buying and selling and rents are rising, criticism is also being raised that it is becoming increasingly difficult for people living in those areas to ‘buy their own house’. Aaron Banks, a councilor for the Southern District of Jackson, said the increase in investment home purchases could lead to higher rents and “put people in a vicious cycle of being tenants for the rest of their lives”.

However, there are objections that the purchase of a home for investment has opened the way for tenants to access a good school district and a safe area. The price of existing houses has already risen and there are not many for sale, so people are being pushed out of the housing market and have no choice but to rent a house.

“As long as these people in other states provide a good home for residents to live in, they’re also serving the community,” said Kevin Otner, Affiliate’s chief executive.

U.S. Treasury Secretary Janet Yellen said on the 11th that the European Union (EU) ban on Russian oil imports “has the potential to cause a surge in oil prices”.

Secretary Yellen appeared on CNN on the same day, and when asked if the American public should be prepared for the fall in oil prices that could rise again in winter, he replied, “That is the risk that the Russian oil price cap is trying to solve.”

“This winter, the EU will suspend most of its purchases of Russian crude and will also ban the provision of services that make it possible to transport Russian crude via tankers,” he said. It is designed to lower the price of crude oil internationally by reducing imports from Russia, which is used for oil production, while at the same time maintaining the supply of Russian crude oil,” he said.

“We’re trying to implement this to avoid skyrocketing oil prices in the future,” she continued.

The EU is scheduled to implement an embargo on Russian crude oil in December, and seven major countries (G7) including the United States will implement price caps on Russian crude oil and petroleum products at this time, and details are being coordinated.

When asked about the possibility of a recession because of the Federal Reserve’s sharp hikes in interest rates, Yellen said, “That’s the risk of the Fed tightening monetary policy to tackle inflation. “We are monitoring this risk,” he said.

“Economic growth is slowing, but this is natural considering we were in a difficult economic situation when Joe Biden took office,” he said. “The market is still strong,” he said.

Regarding the possibility of an economic soft landing, he said: “For a soft landing that lowers prices while maintaining a strong labor market, the Fed needs great skill as well as luck. I believe there is a way to achieve this.”