Connect with us

Latest News

The hard data says the US economy is just fine



People carry retail shopping bags during Black Friday events on November 25, 2016 in New York City.

Getty Images

One major cluster of data shows the U.S. economy is doing well despite concerns of a potential recession.

The hard data, which refers to actual numbers about the economy such as unemployment and retail sales, continues to reflect economic strength.

The U.S. unemployment rate fell to a 50-year low in September while retail sales grew more than expected in August. However, stocks have struggled in recent months amid disappointing soft data, which includes corporate and consumer sentiment surveys as well as purchasing managers’ index (PMI) numbers.

Soft data is often seen as a leading indicator of the economy and the recent batch has stoked fears of a recession as the U.S.-China trade war drags on. But those fears may be overblown as the hard data shows the U.S. economy remains strong.

“While the survey data have been steadily disappointing expectations, hard data have been a source of positive surprises,” said Doug Peta, chief U.S. investment strategist at BCA Research, in a note. “The labor market remains vibrant enough to exert downward pressure on the unemployment rate, and services continue to expand despite the contraction in manufacturing, both here and abroad. The expansion has slowed, but it’s not finished yet.”

The Bureau of Labor Statistics said Friday that the U.S. unemployment rate dropped to 3.5% in September, its lowest level since December 1969. The rate dropped even as the pace of U.S. job growth slowed last month. Nonfarm payrolls expanded by 136,000 in September, down from 168,000 in August.

The U.S. consumer is also in a solid place. Retail sales rose 0.4% in August, topping a Dow Jones estimate of 0.2%. The better-than-expected retail sales increase came after a 0.8% jump in July.

But despite the solid hard data, the major stock indexes are all down over the past three months as weak soft data has raised concern over the economy moving forward. The Dow Jones Industrial Average and S&P 500 are both down more than 1% in that time. Meanwhile, the Nasdaq Composite has lost more than 2%.

The Institute for Supply Management said last week that its U.S. services PMI fell in September to its lowest level since August 2016. ISM also said U.S. manufacturing activity contracted last month to its lowest level in more than 10 years.

Meanwhile, the University of Michigan’s Surveys of Consumers said last month that a near-record number of consumers are worried about the U.S.-China trade war. A survey released Monday by the National Association for Business Economics showed respondents expect the U.S. economy to grow by less than 2% next year as the trade war rages on. That would be the slowest pace for U.S. economic growth since 2016.

Jan Hatzius, chief economist at Goldman Sachs, said this divergence between the hard and soft data is “is the inverse of what we saw in the first 18 months of the Trump presidency.” He noted the hard U.S. data was lackluster in that time period while the soft numbers pointed to strong growth further down the road.

Equities performed well during President Donald Trump‘s first 1½ years in office. The S&P 500 advanced more than 23% in that time.

But “one reason to worry that history might not repeat itself is that the weakness in business sentiment dragging down the soft [data] reflects a rise in policy uncertainty that looks unlikely to go away anytime soon,” Hatzius said in a note, referring to the trade war.

U.S. and Chinese officials are set to meet later this week in Washington to try and get closer to a trade deal. Both countries have slapped tariffs on billions of dollars worth of their products since last year, dampening expectations for corporate profit and economic growth.

“Even so, there are good reasons to think that output and employment will continue to expand at a trend or slightly above-trend pace, and that worries about a recession will continue to prove too pessimistic,” Goldman’s Hatzius said.

— CNBC’s Jeff Cox contributed to this report.

Subscribe to CNBC on YouTube.

Source link

Latest News

What to watch for in May’s health care jobs numbers




A view outside Bellevue hospital during the coronavirus pandemic on May 1, 2020 in New York City.

Noam Galai | Getty Images

As hospitals, physician practices and dental offices have reopened for non-emergency care over the last month, it seems a good bet that health-care workers furloughed during March and April will be among those most likely to be recalled by their employers, but the May jobs numbers on Friday may not show much of a snap-back. 

“We expect the education and health services industries to recover quicker than will the overall labor market this year,” analysts at Moody’s Investors Services wrote in research note Wednesday, adding “next year, these industries will likely add about 370,000 jobs, or 11% of total private-sector jobs created.”

While private employers added 166,000 education jobs last month, according to payroll processing firm ADP’s May employment report, it was a different story in health care. The private sector shed another 333,000 health care jobs in May, bringing losses over the last three-months to more than 2.4 million.

Dental jobs could see May bounce 

Dentistry saw the biggest employment losses in the health care sector care in April, shedding more than 500,000 jobs, but preliminary data from the American Dental Association show the dental sector could see a healthy bounce back in the May jobs report. 

By last week, 90% of dental practices had reopened, up from 65% in mid-May. More than three out of four practices report paying their staff fully, with patient volumes at about 52% of pre-Covid levels by the end of the month. 

“All of all of my predictions are turning out to be overly bearish. I’d expected a slower recovery and slower rebound in patient volume, and slower bounce back in hiring,” said Marko Vujicic ADA chief economist and vice president.

Slower recovery

The vast majority of physician practices had reopened by the end of last month, as states lifted the moratorium on non-emergency care, but doctors continue to feel the financial strain of the pandemic shutdown. Some 95% of practices have resumed seeing patients in the office, but about half of primary care doctors surveyed by the Larry A. Green Center last week said that the volume of visits remained down more than 50% from pre-Covid levels. 

Nearly 28% of mostly small practices surveyed had skipped or deferred clinician salaries by month’s end, while more than 35% of practices had laid off or furloughed staff. Just over one-in-five said that bills for telehealth visits had been denied. The full results of the survey will be published Friday.

I think it’s going to be a hard and slow recovery … those who close due to lack of payment may not be able to return. I think what we are seeing is a permanent shrinking of the primary care platform,” said Rebecca Etz, associate professor of family medicine at Virginia Commonwealth University and co-director of the Larry A Green Center.

The situation is not much better for physician practices that fall under a hospital system.

“The 60% employed by hospitals and health systems are likely to be vulnerable to prolonged hiring freezes,” said Etz, noting that 11% of physician practices reported that they had rescinded job offers to incoming medical residents.

Hospitals slow to rehire 

In April, the hospital sector cut nearly 135,000 jobs, as patient volumes and medical care revenues plunged during the national Covid shelter-in-place order, and health care facilities across the country postponed virtually all non-emergency procedures.

Over the last month, health systems have seen a rebound in demand for rescheduling postponed elective surgical procedures, but overall volumes have remained well below pre-March levels.

Through mid-May in-patient volumes were down about 20%, but emergency department visits were still down 40% from late February, according to research from health care division of financial payments firm TransUnion.

Hospitals around the country have ramped up advertising and community outreach to assure people it’s safe to come back to their facilities, but they continue to see patients putting off care.  At the same time, new social distancing and coronavirus disinfecting procedures will also hamper their ability to handle patient volumes at pre-Covid levels.  

Hospitals are rescheduling elective surgeries but worry about demand after the backlog is cleared

“The ones we talk to are being extremely mindful of not jumping the gun in terms of necessarily bringing everybody back immediately,” said James Bohnsack, chief strategy officer of TransUnion Healthcare. “They’re having to be mindful and kind of rethink their strategies around expenses overall, which is mostly driven, as you can imagine by the staffing.”

Top of mind for many hospital executives is that the recovery in patient volumes over the summer could be short-lived.  Most executives anticipate a significant second wave of coronavirus later this year, according to research from consulting firm LEK, and two-thirds of hospital leaders expect that they will have to cut back on non-Covid care once again when that wave hits next winter. 

Source link

Continue Reading

Latest News

China stocks up food, oil as coronavirus spurs fears about shortages




A customer wearing face mask buys flour at a supermarket on May 12, 2020 in Taiyuan, Shanxi Province of China.

Zhang Yun | China News Service | Getty Images

China has been building up its food and energy stockpile this year, taking advantage of slumping crude oil prices even before the coronavirus pandemic disrupted supplies.

The world’s second largest economy, which has limited arable land, is facing pressure to shore up its food supplies as prices for food started ticking higher last year, prior to the virus outbreak.

Lockdowns and movement restrictions aimed at containing the coronavirus have triggered transportation and logistics bottlenecks.

Those blockages have highlighted the vulnerability of global supply chains, and fears of food shortages have come to the forefront of countries, both in developed and emerging economies.

Fear is a powerful motivator. It’s driving policy in China currently. Fits well with those hardliners that want to rebuild food reserves.

Arlan Suderman

chief commodities economist at INTL FCStone

Consumers in China are worried about further repercussions from the pandemic as it continues to spread globally.

“People there (in China) are panicked that coronavirus will eventually shut down the world’s ports, making it impossible for them to import,” said Arlan Suderman, chief commodities economist for INTL FCStone in a tweet on Monday. “As such, they are hoarding supplies now while they are cheap and available.”


“Fear is a powerful motivator. It’s driving policy in China currently. Fits well with those hardliners that want to rebuild food reserves,” he added.

Food prices surge

China is the world’s largest consumer of pork, a staple protein for the country.

In the first four months of the year, meat imports in China rose 82% compared to a year ago. These include pork, beef and poultry.

“We expect food stockpiling to continue especially in cities exposed to logistic disruption. The confluence of expected food price increases alongside an economic contraction and rising unemployment will push up the risk of civil unrest,” said Kaho Yu, senior Asia risk analyst at Verisk Maplecroft, a consultancy.

Already, food inflation in the country has been ticking higher.

Last Tuesday, China announced that food prices rose 14.8% in April from a year ago. Even though it was lower than the 18% increase in March, it was still at a high level.

Pork prices rose almost 97% in April in what has been a persistent trend since early 2019 due to the African swine fever epidemic in pigs that decimated China’s hog herds.

In comparison, non-food prices rose just 0.4% in April, official government data showed.

A worker inspects chickens at a poultry farm in Beijing, China.

Hundreds of millions of chickens at risk of being wiped out with much of China locked down due to virus

Soybean supplies are particularly vulnerable to supply shocks as China, the top importer of the commodity, needs the oilseed to make animal feed and cooking oil.

In April, China’s soybean imports fell 12% from a year earlier, customs data showed, due to bad weather causing the delay of cargoes from top supplier Brazil.

As for rice, China is the world’s largest producer of the staple grain with most of its supplies being consumed domestically.

Even so, concerns about food security of the staple grain have led to panic buying and spurred the state to acquire more stocks from the market for its national reserve.

In April, Chinese authorities assured the population that it was stepping up state buying of rice and that there were enough stocks, state news agency Xinhua reported.

“We expect China to continue stockpiling crops to ensure sufficient supply over the next six months by scouring the globe for available supplies,” said Yu in a recent report.

The consultancy puts China in its “high risk” category in terms of food import security, which means that its food imports risk being subjected to disruption.

Crude oil reserve building

Likewise, China has been building up its crude oil stockpile, and went on a buying spree in the first quarter of this year, data show.

Although crude oil imports fell in April compared to a year ago, they still rose from March. But analysts say limited storage facilities could put a cap on imports.

China is expected to continue importing crude to fill its reserves taking advantage of lower oil prices.

Lei Sun

senior consultant at Wood Mackenzie

“Major crude oil importers such as China have been known to build their strategic reserves when prices are low, as seen in previous oil price routs,” Lei Sun, senior consultant at Wood Mackenzie, said in a March report. “China is expected to continue importing crude to fill its reserves taking advantage of lower oil prices.” 

However, the country has less room to import than it did in the last two years, due to limitations in storage capacity, he said.

As supply lines continue to be disrupted due to the coronavirus outbreak, Yu at Verisk Maplecroft said he expects Beijing to double down on building more storage capacity, on top of energy development at home.

“Energy is also core to the country’s economic engine. Throughout the pandemic, Beijing has been prioritising maintaining a stable coal supply with an eye on power generation for industrial activities,” said Yu. “We also expect Beijing to speed up the resumption of large scale energy infrastructure projects.”

Putting food and energy first

Food and energy security have always been important for China, but the pandemic has underscored these concerns.

In April, President Xi Jinping spoke about food and energy supply security several times, noted Yu.

In the same month, state agencies — such as China’s National Development and Reform Commission, the National Food and Strategic Reserves Administration and other ministries — issued a policy notice aimed at ensuring adequate food production, storage capacity and logistics, Yu noted. 

Also in April, China’s National Energy Agency issued a list of policy areas to focus on this year. They included power supply, grid networks, oil and gas infrastructure, and coal projects.

The developments underscored the government’s concerns, he said.

“Both Xi’s rhetoric and associated policy announcements from various ministries show how food and energy security are high on the government’s agenda,” said Yu.

“All of them are aiming to avoid potential pandemic-linked supply shortages and to increase self-sufficiency of critical resources over the long term. The COVID-19’s disruption on trade and industrial activities has reignited Chinese leadership’s long-running concerns over resource security.”

Source link

Continue Reading

Latest News

Microsoft, UnitedHealth offer companies free app to screen employees for coronavirus




UnitedHealth Group and Microsoft’s ProtectWell coronavirus symptom screener

UnitedHealth Group and Microsoft

UnitedHealth Group and Microsoft are offering companies a coronavirus screening app called ProtectWell that provides a daily symptom screener to help clear employees to go to work or direct them to be tested if they are at risk for infection.

As U.S. companies struggle to bring employees back under stringent new safety requirements, health-care and tech companies are rolling out new services that go beyond temperature checks. The apps are designed to help protect the safety of employees returning to work as well as to entice customers to return to restaurants and stores by ensuring wait staff and clerks are infection-free.

Microsoft and UnitedHealth, which use the program for their own workers, are now offering the service to U.S. employers free of charge. The program will include resources and guidelines on Covid-19 testing schedules for different workers within an organization, based on their potential on-the-job exposure to the virus.

“A worker in a nursing home, for example, … we would want to be doing the symptom checking every single day, and then be put into a testing schedule that allows them to get tested, anywhere from three to… every five days,” said Ken Ehlert, UnitedHealth Group chief scientific officer. “Different folks in the population need different levels of testing.”

The ProtectWell app provides the worker with his or her test results and notifies the employer when a worker tests positive for the coronavirus.

“When we think about the broader perspective of enabling a safe return to work, it’s imperative that employers also have that ability to be able to … act on that information, so that they can ensure that the workplace is safe” said Dr. David Rhew, Microsoft chief global medical officer. 

The app will not provide tracking and contact tracing information, and while Microsoft’s health-care bot will drive the symptom screening within the app, UnitedHealth will maintain control over the health data itself. Under occupational health and safety rules, workers’ personal health information needs to be kept separate from personnel records.

“The challenge is about data management — how we aggregate testing information, safely permission it to reach the right people, use it to make workplace decisions,” said Dr. Rajaie Batniji, co-founder of benefits firm Collective Health, which launched its own Covid back-to-work service this week.

Testing reliability

Batniji says a testing program, when combined with social distancing and disinfecting practices, can help businesses lower the risk of a workplace outbreak to less than 5%.

The firm’s Collective Go service is partnering with Bay Area start-ups Genalyte, Color and Everlywell to provide employers with on-site and at-home molecular testing for current infections, as well as antibody tests that can show whether a person was previously infected.

“We’re seeing improvement … with regard to accuracy and scalability” of the antibody tests, said Batniji, but he adds that the firm is continually assessing the latest data on the reliability of various Covid-19 tests.

On Thursday ,the Food and Drug Administration raised concerns about the accuracy of Abbott Labs’ ID Now rapid Covid-19 tests, after a study from New York University suggested that the test resulted in a high number of false negatives.

A box containing a 5-minute test for COVID-19 from Abbott Laboratories is pictured during the daily briefing on the novel coronavirus, COVID-19, in the Rose Garden of the White House in Washington, DC, on March 30, 2020.

FDA issues warning on accuracy of Abbott’s rapid coronavirus test after study finds false negatives

UnitedHealth’s Ehlert notes that availability could also be an issue for some employers to adopt wide-scale testing, so it will be important to prioritize testing programs for workers who are most at risk of getting sick.

“We are working within the capacity of trying to get the best tests available, make sure we have enough of them, and prioritize them,” he said.

Race to provide testing  

With the sharp drop in nonemergency diagnostic screening and testing due to the pandemic, new workplace programs could provide a much-needed boost to diagnostic testing firms and hospitals as they try rebound from the financial disruption caused by delayed procedures over the last two months.

New Orleans-based Ochsner Health System set up its own lab for processing Covid testing for its patients and staff and is now working with area employers to help them establish testing and health monitoring programs. CEO Warner Thomas says the return-to-work service will allow the hospital to redeploy clinicians who have been idled, while postponed elective surgery and other procedures are beginning to be rescheduled.

Quest Diagnostics CEO Stephen Rusckowski told analysts last month that reopening presents “substantial opportunities” for providing to testing for employers and municipalities “for overall surveillance within the population and returning to work.”

LabCorp CEO Adam Schechter told CNBC that different parts of the economy will require varying levels of testing to bring workers back and has been in talks with employers to provide on and off-site screening for workers, including temperature checks.

Labcorp CEO Adam Schechter talks as commercial lab executives and government Health officials meet with Vice President Mike Pence on the Coronavirus crisis at the White House on March 4, 2020 in Washington,DC.

LabCorp CEO says the US doesn’t need 2 million coronavirus tests per day to reopen

It’s unclear just how much employers will actually lean into widespread workforce coronavirus testing, but for many American workers it could become a job requirement while the threat of the pandemic remains, which could be for the foreseeable future.

“As a doctor, if I wasn’t up to date on necessary vaccinations or screening, it’s considered a safety issue for patients and co-workers,” said Batniji. “This is a first for many (and) a cultural change for most Americans.”  

Correction: This story has been revised to correct the attribution of a quotation from a Microsoft official. The quote was from Dr. David Rhew, Microsoft’s global chief medical officer. 

Source link

Continue Reading


Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.