Wealth Builders Kingdom

Savannah Britt owes about $27,000 on loans she took out to attend college at Rutgers University, a debt she was hoping to see reduced by President Joe Biden’s student loan forgiveness  efforts.

Her payments are currently on hold while courts untangle challenges to the loan forgiveness program. But as the weeks tick down on Biden’s time in office, she could soon face a monthly payment of up to $250.

“With this new administration , the dream is gone. It’s shot,” said Britt, 30, who runs her own communications agency. “I was hopeful before Tuesday. I was waiting out the process. Even my mom has a loan that she took out to support me. She owes about $18,000, and she was in the process of it being forgiven, but it’s at a standstill.”

President-elect Donald Trump  and his fellow Republicans have criticized Biden’s loan forgiveness efforts, and lawsuits by GOP-led states have held up plans for widespread debt cancellation. Trump has not said what he would do on loan forgiveness, leaving millions of borrowers facing uncertainty over their personal finances.

The economy  was an important issue in the election, helping to propel Trump to victory. But for borrowers, concerns about their finances extend beyond inflation to include their student debt, said Persis Yu, managing counsel for the Student Borrower Protection Center.

“That’s a big part of what is making life unaffordable for them is this burden of expenses that they can’t seem to get out from under,” Yu said.

Student loan cancellation was not a focus of the campaign for either Trump or Vice President Kamala Harris , who steered clear of the issue at her political events. The issue came up just once in the September presidential debate, when Trump hammered Harris and Biden for failing to deliver their promise of widespread forgiveness. Trump called it a “total catastrophe” that “taunted young people.”

Biden promised the student loan cancellation program during his run for the presidency. From its launch, Biden’s loan forgiveness faced relentless pushback from opponents who said it heaped advantage on elites and came at the expense of those who repaid their loans or did not attend college.

Biden’s first plan to cancel up to $20,000 for millions of people was blocked by the Supreme Court  last year. A second, narrower plan  has been halted by a federal judge after Republican-led states sued. A separate policy intended to lower loan payments for struggling borrowers has been paused by a judge, also after Republican-controlled states challenged it.

Overall, Biden’s efforts were relatively unpopular, even among those with student loans. Three in 10 U.S. adults said they approved of how Biden had handled student loan debt, according to a poll  this spring from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research . Four in 10 disapproved. The others were neutral or didn’t know enough to say.

Project 2025, the blueprint for a hard-right turn  in American government that aligns with some Trump priorities , calls for getting the federal government out of the student loan business and doing away with repayment plans that pre-date the Biden administration.

Even without directly addressing student loans, Trump has made promises that would affect them. He has pledged to eliminate the U.S. Department of Education, which manages the $1.6 trillion federal student loan portfolio. It’s unclear which entity would take that responsibility if the department were eliminated, which would require approval from Congress.

Yu noted the Biden administration managed to cancel student loans for about 5 million borrowers , even though the signature forgiveness effort has been blocked. The administration did it by leaning into loan cancellation programs already in effect. For example, an existing student loan forgiveness program  for public service workers has granted relief to more than 1 million Americans, up from just 7,000 who were approved before it was updated by the Biden administration two years ago.

“A lot of the cancellation that we saw in the last couple of years was because the Biden administration was committed to making the programs that are actually enshrined in law work for people,” Yu said.

The challenge of repaying the $23,000 she has borrowed to study education policy at Columbia University weighs on 23-year-old Zaakirah Rahman, but she said she did not see an alternative to pursing an advanced degree.

“It feels like the threshold for things is getting higher and suddenly getting a bachelor’s degree isn’t enough,” she said. “It’s expensive. It’s super expensive. But it seems like you don’t really have a choice.”

Sabrina Calazans, 27, owes about $30,000 on federal student loans from her college days at Arcadia University in Pennsylvania. Her payments also have been on hold, but she could soon face a monthly payment of over $300.

“As a first-generation American, I live at home with my family, I contribute to our household finances, and that payment is a lot for me and so many others like me,” said Calazans, who is originally from Brazil.

In her role as managing director for Student Debt Crisis Center, Calazans said she has been telling people to stay up to date on developments by using the loan simulator on the Federal Student Aid website  and reading updated information on forgiveness qualifications and repayment programs.

“There’s a lot of confusion about student loans,” Calazans said, and not just among young people. “We’re seeing a lot of parents take out more debt for their children to be able to go to school. We’re seeing older folks go back to school and having to take out loans as well.”

SOURCE: AP NEWS

 U.S. stocks are rallying Tuesday as voters head to the polls on the last day of the presidential election  and as more data piles up showing the economy remains solid.

The S&P 500 was up 1.2% in afternoon trading, rising closer to its record set last month . The Dow Jones Industrial Average was up 431 points, or 1%, as of 12:50 p.m. Eastern time, while the Nasdaq composite was 1.5% higher.

Treasury yields also rallied after a report showed growth for retailers, transportation companies and other businesses in the U.S. services industries accelerated last month. That was despite economists’ expectations for a slowdown, and the Institute for Supply Management  said it was the strongest growth since July 2022.

The strong data offered more hope that the U.S. economy will remain solid  and avoid a long-feared recession  following the worst inflation in generations .

Excitement about the artificial-intelligence boom also helped lift the stock market, as it has for much of the last year. Software company Palantir Technologies jumped 23% after delivering bigger profit and revenue than analysts expected for the latest quarter. It’s an industry known for thinking and talking big, and CEO Alexander Karp said, “We absolutely eviscerated this quarter, driven by unrelenting AI demand that won’t slow down.”

It helped offset a 6.3% drop for NXP Semiconductors. The Dutch company fell to one of the largest losses in the S&P 500 after warning that weakness it saw in the industrial and other markets during the latest quarter is spreading to Europe and the Americas.

The market’s main event, though, is the election, even if the result may not be known for days, weeks or months as officials count all the votes. Such uncertainty could upset markets, along with an upcoming meeting by the Federal Reserve on interest rates  later this week. The widespread expectation is for it to cut its main interest rate for a second straight time, as it widens its focus to keeping the job market solid in addition to getting inflation under control.

Despite all the uncertainty heading into the final day of voting, many professional investors suggest keeping the focus on the long term and what corporate profits will do over the next few years and a decade. The broad U.S. stock market has historically tended to rise regardless of which party wins the White House, even if each party’s policies help and hurt different industries’ profits underneath the surface.

Since 1945, the S&P 500 has risen in 73% of the years where a Democrat was president and 70% of the years when a Republican was the nation’s chief executive, according to Sam Stovall, chief investment strategist at CFRA.

The U.S. stock market has tended to rise more in magnitude when Democrats have been president, in part because a loss under George W. Bush’s term hurt the Republican’s average. Bush took over as the dot-com bubble was deflating and exited office when the 2008 global financial crisis and Great Recession were devastating markets.

The S&P 500 ended up rising 69.6% from that Election Day in 2020 through Monday, following President Joe Biden’s win. It set its latest all-time high on Oct. 18, as the U.S. economy bounced back from the COVID-19 pandemic and managed to avoid a recession despite a jump in inflation.

In the prior four years, the S&P 500 rose 57.5% from Election Day 2016 through Election Day 2020, in part because of cuts to tax rates signed by Trump.

Investors have already made moves in anticipation of a win by either Trump or Vice President Kamala Harris. The value of the Mexican peso might fall if Trump’s tariffs on Mexico come to fruition, for example.

But Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, suggests not getting caught up in the pre-election moves, or even those immediately after the polls close, “which we believe will face inevitable tempering, if not outright reversals, either before or after Inauguration Day.”

In the bond market, the yield on the 10-year Treasury rose to 4.34% following Tuesday morning’s strong report on U.S services businesses from 4.29% late Monday.

In stock markets abroad, indexes were mixed in Europe and Asia. The moves were mostly modest outside of jumps of 2.3% in Shanghai and 2.1% in Hong Kong.

SOURCE: AP NEWS

Some manufacturers and retailers are urging President Joe Biden to invoke a 1947 law as a way to suspend a strike by 45,000 dockworkers that has shut down 36 U.S. ports  from Maine to Texas.

At issue is Section 206 of the Labor Management Relations Act of 1947, better known as the Taft-Hartley Act. The law authorizes a president to seek a court order for an 80-day cooling-off period for companies and unions to try to resolve their differences.

Biden has said, though, that he won’t intervene in the strike.

Taft-Hartley was meant to curb the power of unions

The law was introduced by two Republicans — Sen. Robert Taft of Ohio and Rep. Fred Hartley Jr. of New Jersey — in the aftermath of World War II. It followed a series of strikes in 1945 and 1946 by workers who demanded better pay and working conditions after the privations of wartime.

President Harry Truman opposed Taft-Hartley, but his veto was overridden by Congress.

In addition to authorizing a president to intervene in strikes, the law banned “closed shops,” which require employers to hire only union workers. The ban allowed workers to refuse to join a union.

Taft-Hartley also barred “secondary boycotts,’' thereby making it illegal for unions to pressure neutral companies to stop doing business with an employer that was targeted in a strike.

It also required union leaders to sign affidavits declaring that they did not support the Communist Party.

Presidents can target a strike that may “imperil the national health and safety”

The president can appoint a board of inquiry to review and write a report on the labor dispute — and then direct the attorney general to ask a federal court to suspend a strike by workers or a lockout by management.

If the court issues an injunction, an 80-day cooling-off period would begin. During this period, management and unions must ”make every effort to adjust and settle their differences.’'

Still, the law cannot actually force union members to accept a contract offer.

Presidents have invoked Taft-Hartley 37 times in labor disputes

According to the Congressional Research Service, about half the time that presidents have invoked Section 206 of Taft-Hartley, the parties worked out their differences. But nine times, according to the research service, the workers went ahead with a strike.

President George W. Bush invoked Taft-Hartley in 2002 after 29 West Coast ports locked out members of the International Longshore and Warehouse Union in a standoff. (The two sides ended up reaching a contract.)

Biden has said he won’t use Taft-Hartley to intervene

Despite lobbying by the National Association of Manufacturers and the National Retail Federation, the president has maintained that he has no plans to try to suspend the dockworkers’ strike against ports on the East and Gulf coasts.

On Wednesday, before leaving Joint Base Andrews for an air tour of North Carolina to see the devastation from Hurricane Helene, Biden said the port strike was hampering efforts to provide emergency items for the relief effort.

“This natural disaster is incredibly consequential,” the president said. “The last thing we need on top of that is a man-made disaster — what’s going on at the ports.”

Biden noted that the companies that control East and Gulf coast ports have made huge profits since the pandemic.

“It’s time for them to sit at the table and get this strike done,” he said.

Though many ports are publicly owned, private companies often run operations that load and unload cargo.

William Brucher, a labor relations expert at Rutgers University, notes that Taft-Hartley injunctions are “widely despised, if not universally despised, by labor unions in the United States.”

And Vice President Kamala Harris is relying on support from organized labor in her presidential campaign against Donald Trump.

If the longshoremen’s strike drags on long enough and causes shortages that antagonize American consumers, pressure could grow on Biden to change course and intervene. But experts like Brucher suggest that most voters have already made up their minds and that the election outcome is “really more about turnout” now.

Which means, Brucher said, that “Democrats really can’t afford to alienate organized labor.”

SOURCE: AP NEWS

Laid off by the music streaming service Spotify last year, Joovay Arias figured he’d land another job as a software engineer fairly soon. His previous job search, in 2019, had been a breeze.

“Back then,” he said, “I had tons of recruiters reaching out to me — to the point where I had to turn them down.”

Arias did find another job recently, but only after an unexpected ordeal.

“I thought it was going to be something like three months,’’ said Arias, 39. “It turned into a year and three months.’’

As Arias and other jobseekers can attest, the American labor market, red-hot for the past few years, has cooled. The job market is now in an unusual place: Jobholders are mostly secure, with layoffs low, historically speaking. Yet the pace of hiring has slowed, and landing a job has become harder. On Friday, the government will report on whether hiring slowed sharply again in August after a much-weaker-than-expected July job gain.

“If you have a job and you’re happy with that job and you want to hold onto that job, things are pretty good right now,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. “But if you’re out of work or you have a job and you want to switch to a new one, things aren’t as rosy as they were a couple of years ago.’’

Since peaking in March 2022 as the economy accelerated out of the pandemic recession, the number of listed job openings has dropped by more than a third, according to the government’s latest monthly report on openings and hiring .

Temporary-help firms have reduced jobs for 26 of the past 28 months. That’s a telling sign: Economists generally regard temp jobs as a harbinger for where the job market is headed because many employers hire temps before committing to full-time hires.

In a roundup this week of local economic conditions , the Federal Reserve’s regional banks reported signs of a decelerating job market. Staffing agencies have said that job gains have slowed “as firms are approaching hiring decisions with greater hesitancy,” the New York Fed found. “Job candidates are lingering on the market longer.”

The Minneapolis Fed said that a staffing agency reported that “businesses are getting a lot more picky” about whom they hire. And the Atlanta Fed found that “only a few” companies planned to step up hiring.

Job-hopping, so rampant two years ago, has slowed as workers have gradually lost confidence in their ability to find better pay or working conditions somewhere else. Just 3.3 million Americans quit their jobs in July, compared with a peak of 4.5 million in April 2022.

“People are staying put because they’re afraid they won’t find new jobs,’’ said Aaron Terrazas, chief economist at the employment website Glassdoor.

And the Labor Department has reported, in its annual revised estimates of employment growth, that the economy added 818,000 fewer jobs  in the 12 months that ended in March than it had previously estimated.

In one respect, it’s not at all surprising that the pace of hiring is now moderating. Job growth in 2021 and 2022, as the economy roared back from the COVID-19 recession, was the most explosive on record. Workers gained leverage they hadn’t enjoyed in decades. Companies scrambled to hire fast enough to keep up with surging sales. Many employers had to jack up pay and offer bonuses to keep employees.

It was inevitable — and even healthy, economists say, in the long run — for hiring to slow, thereby easing pressure on wage growth and inflation pressures. Otherwise, the economy could have overheated and forced the Fed to tighten credit so aggressively as to cause a recession.

The post-pandemic jobs boom was a marked contrast to the sluggish recovery from the Great Recession of 2007-2009. Back then, it took more than six years for the economy to recover the jobs that had been lost. By contrast, the breathtaking pandemic job losses of 2020 — 22 million — were reversed in less than 2 1/2 years.

Still, the surging economy ignited inflation, leading the Fed to raise interest rates 11 times in 2022 and 2023 to try to cool the job market and slow inflation. And for a while, the economy and the job market appeared immune from higher borrowing costs. Consumers kept spending, businesses kept expanding and the economy kept growing.

But eventually the continued high rates began leaving their mark. Several high-profile companies, including tech giants like Spotify, announced layoffs last year in the face high interest rates. Outside of the economy’s technology sector, though, and, to a lesser extent, finance, most American companies haven’t cut jobs. The number of people filing first-time applications for unemployment benefits is barely above where it was before the pandemic struck.

Yet the same companies that are keeping workers aren’t necessarily adding more.

“Compared to a year or two ago, it’s a lot more difficult, particularly for entry-level folks,’’ Glassdoor’s Terrazas said. “Because of the gradual drip of layoffs in tech and finance, in professional services over the past year and a half, there have been a lot of high-skilled, experienced folks on the job market.

“By all evidence, they are finding jobs. But they are also pushing more entry-level folks further and further down the queue… Recent grads, folks without a lot of on-the-job experience are feeling the effects of suddenly competing with people who have two, five, 10 years’ experience in the jobs market. When those big fish are in the market, the little fish naturally get squeezed out.’’

Despite the pressure of the highest interest rates in decades, the economy remains in solid shape, having grown at a healthy 3% annual pace  from April through June. Most Americans are enjoying solid job security.

Still, given the growing difficulty of changing jobs, even some of those job holders are feeling the chill.

“The reality is a lot of people, even when they have jobs, are feeling a lot of angst about the economy,’’ Terrazas said. “People are feeling a little bit job insecurity, a lot more pressure in the workplace than they have in a while.’’

In an August survey, the New York Fed found that Americans as a whole are more worried about losing their jobs now than at any time since 2014, when people were just beginning to feel the full effects of the recovery from the Great Recession of 2008-2009.

Adding to the anxiety is that memories of the recent job boom are still fresh.

“The reference point for most people is still 2021, 2022, when the job market was very strong, and what looks like for us economists as a normalization (of the job market from unsustainable levels), I think for a lot of people feels like a loss of status,’’ Terrazas said.

Consider Abby Neff, who, since graduating from Ohio University in May 2023, has struggled to find the “old-fashioned writing job’’ that she hoped to land in journalism

“It’s been pretty tough,” she said, “to find a permanent journalism job.”

In the meantime, Neff, 23, has joined the government’s AmeriCorps agency, which mobilizes Americans to perform community service, in southeastern Ohio. The job doesn’t pay much. But it has given her the opportunity to write and to learn about everything from forestry to sustainable agriculture to watershed management.

She hadn’t expected to encounter such difficulty in finding a job in her field.

“I feel like I did all the ‘right things’ in college,’’ Neff said ruefully.

She edited a campus magazine and made contacts in the business. She has landed some interviews, only to learn later that the job was filled without her having heard from the employer.

“I will get ‘ghosted,’ ‘’ she said. “I almost feel like I have to hunt employers down to even get a response to an application or submission.”

Arias, the software engineer, started looking for a job “the minute I got laid off’’ in June 2023. At first, he was casual about it. He took time off to care for his newborn daughter and drew money out of his severance package from Spotify. But when the job hunt proved difficult, he “decided to really ramp it up’’ early this year.

Arias started driving for a ride-sharing service and getting job leads from passengers. He reached out to a company through which he had taken part in a computer coding bootcamp, seeking contacts. Eventually, the networking paid off with a new job.

Yet the process proved much more frustrating than he had envisioned. Employers he had communicated with would vanish without explanation.

“That’s the worst part about the experience,’’ Arias said. “You get that introductory message. Then you send your resume. And then that’s it. Communication would end there. Or you’d get an automated response. So you don’t know what happened, what you did wrong … It just feels really demoralizing, really stressful, because you don’t know what happened.”

SOURCE: AP NEWS

U.S. stocks are climbing toward their best day in nearly two years on Thursday after a better-than-expected report  on unemployment eased worries about the slowing economy .

The S&P 500 was rallying by 2.4% in afternoon trading, a day after a big early gain evaporated and flipped  into a loss. The Dow Jones Industrial Average was up 725 points, or 1.9%, as of 2:22 p.m. Eastern time, and the Nasdaq composite was 3% higher as Nvidia and other Big Tech stocks helped lead the way.

Treasury yields also climbed in the bond market, a signal investors are feeling less worried about the economy , after a report showed fewer U.S. workers applied for unemployment benefits last week. The number was better than economists expected.

It was exactly a week ago that worse-than-expected data  on unemployment claims helped enflame worries that the Federal Reserve  has kept interest rates  at too high of an economy-slowing level for too long in order to beat inflation . That helped send markets reeling , along with a rate hike by the Bank of Japan  that sent shockwaves worldwide by scrambling a favorite trade among some hedge funds.

At the worst of it, at least so far, the S&P 500 was down roughly 9% from its record set last month. Such drops are regular occurrences on Wall Street, and “corrections” of 10% happen roughly every year or two.

What made this drop particularly scary was how quickly it happened. A measure of how much investors are paying to protect themselves from future drops for the S&P 500 briefly surged toward its highest level since the COVID crash of 2020.

Still, the market’s swings look more like a “positioning-driven crash” driven by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term downward market caused by a recession, according to strategists at BNP Paribas.

They say it looks more similar to the “flash crash” of 2010  than the 2008 global financial crisis or the 2020 recession caused by the pandemic.

Of course, markets have been quick to turn over the past week regardless of any long-term predictions.

“Today’s jobless claims data may ease some of the concerns raised by last week’s soft jobs report,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. “But with inflation data due out next week and the stock market still working through its biggest pullback of the year, it’s unclear how much this will move the sentiment needle.”

In the meantime, big U.S. companies continue to turn in profit reports for the spring that are mostly better than analysts expected.

Eli Lilly jumped 9.4% to help lead the market after it delivered stronger profit and revenue  than Wall Street had forecast. Sales of its Mounjaro diabetes treatment and its Zepbound weight-loss counterpart are booming, and the company raised its financial forecast for the year.

Big Tech stocks also rose to claw back some of their sharp losses from the last month. After a handful of them almost singlehandedly drove the S&P 500 to dozens of all-time highs this year, the group known as the “Magnificent Seven”  lost momentum last month amid criticism their prices went too high in investors’ frenzy around artificial-intelligence  technology.

How this handful of stocks performs carries extra impact on the S&P 500 and other indexes because they’re by far the market’s most valuable companies. Nvidia , which has become the poster child for the AI trade, rose 6.3% to trim its loss for the week so far to 4% and it was the day’s strongest single force pushing upward on the S&P 500.

Gains of 1.7% for Microsoft and 1.8% for Apple were also big propellants, along with Eli Lilly.

They helped offset a drop of 11.7% for McKesson, which topped analysts’ expectations for profit in the latest quarter but fell short on revenue. It said growth slowed in its medical-surgical business.

Bumble, the Texas-based dating app, lost nearly a third of its value, 31.9%, after its forecast for revenue in the third quarter came in well below Wall Street’s.

In the bond market, the yield on the 10-year Treasury rose to 4.01% from 3.95% late Wednesday.

In stock markets abroad, indexes were mixed across Asia and Europe. In Japan, which has been home to some of the market’s wildest moves, the Nikkei 225 ticked down by 0.7%. That looked like a ripple following its tidal swings of down 12.4%  and up 10.2% to start the week. ___

SOURCE: AP NEWS

American consumers felt more confident in July as expectations over the near-term future rebounded. However, in a reversal of recent trends, feelings about current conditions weakened.

The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 100.3 in July from a downwardly revised 97.8 in June.

The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.

The measure of Americans’ short-term expectations for income, business and the job market rose in July to 78.2 from 72.8 in June. A reading under 80 can signal a potential recession in the near future.

Consumers’ view of current conditions dipped in July to 133.6, from 135.3 in June.

Elevated prices for food and groceries remain the main driver of consumers’ view of the U.S. economy. Though inflation has come down considerably since the Federal Reserve started boosting interest rates in March of 2022, price increases remain well above pre-pandemic levels.

“Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year,” said Dana Peterson, The Conference Board’s chief economist.

The number of respondents who said they planned to purchase a home fell to a 12-year low as elevated interest rates, sky-high home prices and a lack of supply continue to discourage home shoppers .

The number of consumers predicting a recession inched up this month but is still well of its 2023 peak, the board said.

Consumer spending accounts for nearly 70% of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling.

While the U.S. economy and labor market remain broadly healthy, some weakness has surfaced, spurred by higher interest rates.

The unemployment rate ticked up to 4.1% in June  — the highest rate since November 2021 — even as America’s employers added another 206,000 jobs last month.

Also Tuesday, the government reported that postings for U.S. job openings fell slightly in June . There were 8.18 million job vacancies in June, still a strong number, but down from 8.23 million in May.

The nation’s economy accelerated in the second quarter at a strong 2.8% annual pace , but that comes after growth of just 1.4% in the January-March quarter.

This year’s economic slowdown reflects the much higher borrowing rates for home and auto loans, credit cards and many business loans resulting from the Fed’s aggressive series of interest rate hikes.

The Fed wraps up its current two-day meeting on Wednesday, but most analysts expect no change to interest rates. Most are forecasting the first rate cut in more than four years  to come at its next meeting in September.

SOURCE: AP NEWS

America’s employers delivered another healthy month of hiring in June, adding 206,000 jobs and once again displaying the U.S. economy’s ability to withstand high interest rates.

Last month’s job growth did mark a pullback from 218,000 in May. But it was still a solid gain, reflecting the resilience of America’s consumer-driven economy, which is slowing but still growing steadily.

Still, Friday’s report from the Labor Department contained several signs of a slowing job market. The unemployment rate ticked up from 4% to 4.1%, a still-low number but the highest rate since November 2021. The rate rose in large part because 277,000 people began looking for work in June, and not all of them found jobs right away.

The government also sharply revised down its estimate of job growth for April and May by a combined 111,000. And it said average hourly pay rose just 0.3% from May and 3.9% from June 2023. The year-over-year figure was the smallest such rise since June 2021 and will likely be welcomed by the Federal Reserve in its drive to fully conquer inflation. Most economists think the Fed will begin cutting its benchmark rate in September, and the details in Friday’s jobs report did nothing to counter that expectation.

Just two sectors — government and a category that includes healthcare and social assistance, neither of which captures the economy’s underlying strength — accounted for roughly three-quarters of June’s job growth. Economists also noted that job growth from April through June averaged 177,000, a decent figure but still the lowest three-month average since January 2021.

Other economists, while agreeing that the job market is slowing, suggested that it remains resilient.

“Both May and June hiring was above 200,000 even after revisions, and the trajectory looks stable,” said Eric Winograd, U.S. economist at AllianceBernstein. “The best available evidence is that the labor market remains strong and that any deceleration remains modest.”

The state of the economy is weighing heavily on voters’ minds as the presidential campaign intensifies. Despite consistent hiring, relatively few layoffs and gradually cooling inflation, many Americans have been exasperated by still-high prices and assign blame to President Joe Biden.

Economists have been repeatedly predicting that the job market would lose momentum in the face of the high rates engineered by the Fed, only to see the hiring gains show continued strength. Still, signs of an economic slowdown have emerged in the aftermath of the Fed’s series of rate hikes. The U.S. gross domestic product — the total output of goods and services — grew at a lethargic annual pace of 1.4%  from January through March, the slowest quarterly pace in nearly two years.

Consumer spending, which accounts for about 70% of all U.S. economic activity and which has powered the expansion the past three years, rose at just a 1.5% pace last quarter after growing more than 3% in each of the previous two quarters. In addition, the number of advertised job openings  has declined steadily since peaking at a record 12.2 million in March 2022.

At the same time, while employers might not be hiring so aggressively after having struggled to fill jobs the past two years, they aren’t cutting many, either. Most workers are enjoying an unusual level of job security.

Hal Lawton, CEO of Tractor Supply, a retail chain that caters to customers in rural areas, said his company still feels under pressure to increase wages. Average hourly pay at Tractor Supply, based in Brentwood, Tennessee, workers exceeds $16. And with rent and food prices high, workers are still seeking pay raises.

“You’ve got a tight labor market, and frontline workers are feeling the pinch of their budgets,” Lawton said. “They’re still out there looking for those wage increases.”

During 2022 and 2023, the Fed raised its benchmark interest rate 11 times  to try to conquer the worst streak of inflation in four decades, lifting its key rate to its highest point in 23 years. The punishingly higher borrowing rates that resulted, for consumers and businesses, were widely expected to trigger a recession. They didn’t. The economy and the job market instead have shown surprising resilience.

Meanwhile, inflation has steadily declined from a 9.1% peak  in 2022 to 3.3%. In remarks this week at a conference in Portugal, Fed Chair Jerome Powell noted that price increases in the United States were slowing again  after higher readings earlier this year. Powell did caution that further evidence that inflation is moving toward the Fed’s 2% target level would be needed before the policymakers would cut rates.

“This is the kind of report that the Federal Reserve wants to see,’’ said Gus Faucher, chief economist at PNC Financial Services Group. “This looks pretty darn good. The labor market is not as strong as it was last year at this time. But the labor market at that time was unsustainably strong.’’

Chris Thomas, an engineering manager in Christiansburg, Virginia, said he can see first-hand that the job market has lost momentum. When Thomas began a previous job hunt back in 2021, when tech startups were desperate to hire, he landed interviews with about a third of the companies he applied to. It took him just a month to find a job.

But after he was laid off in April from a job at a startup, it was clear that the landscape had changed. First, he sought leads through his network of friends and business associates. No luck. Then he sent out hundreds of resumes to positions he thought he was qualified to take. He drew few responses.

Finally, after a nearly three-month search, Thomas landed a job at the end of June.

“This is a very, very different job market than the one we had three years ago,’’ he said.

SOURCE: AP NEWS

Meta must face a proposed class-action lawsuit alleging it prefers hiring foreign workers over U.S. citizens, a California-based federal appeals court ruled  Thursday, after the lawsuit was originally thrown out  in late 2022.

KEY FACTS

A United Nations agency is warning that developments in artificial intelligence could spawn a new surge in Holocaust denial.

A report published Tuesday by UNESCO concludes that AI could result in false and misleading claims about the Holocaust spreading online, either because of flaws in the programs  or because hate groups and Holocaust deniers will intentionally use AI programs to generate content that falsely calls into question the murder of Jews and other groups by the Nazis.

One of the biggest concerns is that AI could be used to create so-called deepfakes of the Holocaust — realistic images or videos that could be used to suggest the Holocaust didn’t happen or was exaggerated. That could lead to greater antisemitism  and a lack of understanding of a key moment in 20th-century history. The report noted that some AI-assisted programs allow  users to interact with simulated historical figures, including prominent Nazis like Adolf Hitler.

“If we allow the horrific facts of the Holocaust to be diluted, distorted or falsified through the irresponsible use of AI, we risk the explosive spread of antisemitism  and the gradual diminution of our understanding about the causes and consequences of these atrocities,” Audrey Azoulay said in a statement accompanying the report.

Widespread use of AI for assistance in education, research and writing are increasing the likelihood that unreliable data and artificial intelligence “hallucinations” could increase public misunderstandings about the Holocaust, even inadvertent ones. AI programs whose understanding of the world is based on relatively narrow sources can also return incomplete or misleading responses when asked about the Holocaust.

UNESCO’s report called on tech companies to establish ethical rules for the development and use of AI, to reduce the chances of unreliable information and to prevent bad actors from harnessing their programs in order to encourage violence and to spread lies  about the Holocaust.

The report was published in partnership with the World Jewish Congress.

SOURCE: AP NEWS