Dow rose 24, advancers over decliners 2-1 & NAZ dipped 12. The MLP index added 1+ to 193 & the REIT index jumped 5+ to the 453s. Junk bond funds fluctuated & Treasuries were being purchased. Oil went up towards 81 & gold added 7 to 1762.
AMJ (Alerian MLP index tracking fund)
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The number of job openings in the US slipped off a record high in Aug as the quits rate increased to a record high. The total number of job openings fell by 659K to a seasonally adjusted 10.4M at the end of Aug, according to the Labor Dept's Job Opening & Labor Turnover Survey (JOLTS). The number of job openings in Jul was revised higher by 164K to 11.1M. The forecast expected 10.9M available jobs. Industries that saw the largest decrease in the number of job openings include health care & social assistance (-224K), accommodation & food services (-178K) & state & local gov education (-124K). Job openings increased in the federal gov (+22K). Meanwhile, hiring fell in accommodation & food services (-240K) & in state & local gov education (-160K). This as the total number of quits rose by 242K to 4.3M. The quits rate hit a record high 2.9%. Quits increased in accommodation & food services (+157K), wholesale trade (+26K) & state & local gov education (+25K). There have been 72.6M hires & 66.7M separations over the past 12 months, resulting in a net employment gain of 5.9M.
Job openings slip, quits rate hits record
Central banks such as the Federal Reserve should be prepared to tighten policy in case inflation gets out of control, the IMF warned. While the IMF said it largely concurs with assessments from the Fed & other economists that the current global spate of price increases eventually will ease, it noted there is “high uncertainty” around those forecasts. The cautionary tone mentioned the US, as well as the UK & other developed economies, as places where “inflation risk are skewed to the upside.” “While monetary policy can generally look through transitory increases in inflation, central banks should be prepared to act quickly if the risks of rising inflation expectations become more material in this uncharted recovery,” Gita Gopinath, the IMF's economic counselor & director of research, said in exec summary accompanying the report. “Central banks should chart contingent actions, announce clear triggers, and act in line with that communication,” she added. Fed officials have stated that the primary weapon to fight inflation is hiking interest rates. The US central bank has not raised rates since 2018. The warning was part of the IMF's quarterly update on global economic conditions. The fund slightly downgraded the outlook for global growth this year, but slashed the US GDP forecast by a full percentage point from its Jul outlook, albeit to a still robust 6% that is ahead of the 5.2% forecast for all developed economies. With inflation running around a 30-year high in the US, the Fed has had to wrestle with when to start pulling back the extraordinary policy help it has provided since the Covid pandemic crisis began in early 2020. Though the IMF did not single out the Fed, much of its assessment on inflation indirectly addresses a major policy adjustment the US central bank made in Sep 2020, when it said it would be willing to allow inflation to run hotter than normal in the interest of generating full and inclusive employment. That type of policy carries some danger with it if inflation expectations start to surge, the IMF added. “In settings where inflation is rising amid still-subdued employment rates and risks of expectations de-anchoring are becoming concrete, monetary policy may need to be tightened to get ahead of price pressures, even if that delays the employment recovery,” the report said. Waiting for employment to rebound more strongly “runs the risk that inflation increases in a self-fulfilling way,” which then would undermine Fed policy, the IMF noted.
IMF warns on inflation, says the Fed and others should be prepared to tighten policy
A White House official said the Biden administration maintains its stance that OPEC should "do more" to address the crisis. Administration officials have held senior-level talks with OPEC members regarding the situation. The Biden administration is "using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets," an official added. Oil prices have surged to a 7-year high in recent days, topping $82 per barrel. Production has trailed behind rising demand as levels. The crisis has pushed the cost of a gallon of gas to an average economies around the world ramp up activity from COVID-19 pandemic of $3.27. OPEC+ (OPEC oil cartel & allies including Russia) has resisted calls to increase production faster than scheduled to meet the rising demand. Earlier this month, OPEC+ nations said they would continue to raise oil production along monthly benchmarks as they previously agreed – a decision that caused a spike in US crude oil prices. The White House has pushed for weeks for OPEC+ to take steps to stabilize the global market. Last month, White House Press Secretary Jen Psaki said the administration would "continue to speak to international partners, including OPEC, on the importance of competitive markets and setting prices and doing more to support the recovery." And in Aug, National Security Adviser Jake Sullivan said OPEC+’s rate of oil production increases was "simply not enough."
White House wants OPEC+ to 'do more' to address energy crisis: report
Lower growth for GDP & the prospects for higher interest & inflation rates are spooking the stock market. A major broker just reduced growth rates for 2021 & 2022.
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