Business View Magazine l November 2022

14 BUSINESS VIEW MAGAZINE VOLUME 9, ISSUE 11 MARKET Roughly 4.1 million workers quit their jobs in September “The U.S. manufacturing sector continues to expand, but at the lowest rate since the coronavirus pandemic recovery began,” Timothy Fiore, chair of the ISM’s manufacturing business survey committee, said Tuesday. “With panelists reporting softening new order rates over the previous five months, the October index reading reflects companies’ preparing for potential future lower demand,” Fiore said in a statement. Despite any reassurance from flagging manufacturing, Fed policymakers will likely parse other data suggesting that their most aggressive effort to curb prices in 40 years has so far fallen short. Worker pay and benefits surged 5% during the third quarter compared with the same period last year. The gain in the employment cost index lagged inflation, indicating that wage pressures may persist in the unusually tight labor market despite the Fed’s most aggressive withdrawal of stimulus since the 1980s. Stiff competition for workers and a recent report that the economy grew 2.6% last quarter suggest that the Fed on Wednesday will likely increase the main interest rate by 0.75 percentage point for the fourth straight meeting. Fed tightening slowed 12-month gains in the Consumer Price Index to 8.2% in September from 9.1% in June, the highest inflation in 40 years. Yet the central bank’s preferred measure of inflation — the core personal consumer expenditures price index— increased 5.1% on an annual basis in September compared with 4.9% in August, the Labor Department said Friday. Fed Chair Jerome Powell and other policymakers have repeatedly said that the central bank needs to see some months of falling price pressures before it begins to slow its policy tightening and feel confident inflation is declining toward its 2% goal. Central bank officials have pledged to withdraw stimulus and hit their inflation goal even at the risk of a setback for businesses and a slump in employment. Source: Construction Dive, Jym Tyson, November 02,2022