The American Workforce Shrinks, Tesla’s Milestone and More: 5 Things to Know About Monday

Here are the key events that will take place on Monday which could impact trading.

AMERICAN LABOR FORCE: The number of workers in the United States has continued to decline as companies struggle to find employees for their openings.

“The hope for many of a soft landing is that you meet in the middle, with demand cooling and job supply increasing, and we strike a much healthier balance between the two,” said Michael Pugliese, economist. by Wells Fargo Sunday of the Wall Street Journal. “But if the labor supply stabilizes or continues to decline, demand must be further reduced to cool wage growth.”

According to data from the Department of Labor, the number of workers in the United States has dropped by 400,000 since March, a worrying sign after the number of workers approached prepandemic levels earlier this year. The total workforce is now about 600,000 fewer than in early 2020, just before widespread restrictions due to COVID-19 plunged the economy into a recession.

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Workers erect a building under construction in Philadelphia. (Associated Press / AP Images)

The labor shortage has raised fears that the economy will not achieve the “soft landing” that many were hoping for when the restrictions were lifted, with some economists saying the imbalance between labor supply and demand poses the greatest threat to labor. the US economy.

The labor force participation rate, which counts the percentage of Americans aged 16 and over working or looking for work, dropped to 62.1% in July after rising to 62.4% at the start of this survey. ‘year. The number is also far below the 63.4 percent rate recorded before the pandemic, according to the Department of Labor.

The shortage also contributed to high inflation for nearly four decades, which stood at 8.5% in July. As the energy shortage and supply chain problems that fueled inflation last year began to ease, these pressures have been replaced by a tight labor market that has seen private sector wages rise by 5.7%. compared to last year.

The Fed has tried to slow inflation by raising interest rates, something economists say could also cool the demand for labor. Meanwhile, workers who currently participate in the labor market see their roles expand as companies struggle to fill gaps in their organizations.

SURPRISE IN SHANGHAI: Tesla has now produced more than three million cars, a third of them in China, CEO Elon Musk announced Sunday.

“Congratulations to Giga Shanghai for making the millionth car! Tesla’s total has surpassed 3 million,” Musk tweeted.

Construction of the Tesla plant in Shanghai began in 2018, but the facility has been plagued with closures and other problems in recent years due to the coronavirus pandemic.

Tesla produced 258,000 vehicles in the second quarter, a 15% drop from the 305,000 vehicles produced from January to March.

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Despite this, Tesla said June was the most productive month on record and that the 258,000 vehicles produced still represent a 25% year-over-year increase.

By comparison, Toyota produced 8.57 million vehicles worldwide in 2021.

Tesla CEO Elon Musk is pictured wearing a black suit with a black tie

Elon Musk tweeted his praise to the Tesla factory in Shanghai for producing one million cars, a third of the total 3 million produced by Tesla. (AP Photos / Matt Rourke / AP Images)

Musk has forecast record-breaking production in the second half of the year, and Tesla is sticking to his forecast of 50% average annual growth in vehicle sales.

ECONOMIC RELATIONS DUE: The New York Federal Reserve will kick off this week’s economic reports at 8:30 am ET on Monday with a carefully watched indicator of regional manufacturing activity.

The Empire State Manufacturing Survey is expected to drop to 5.5 in August, from a stronger-than-expected reading of 11.12 the previous month when it came out of contraction territory (a number above zero means more producers in the region New York states that trading conditions are improving rather than deteriorating.)

Several homes under construction in Kentucky

Homes under construction at the Norton Commons subdivision in Louisville, Kentucky on Friday, July 1, 2022. (Luke Sharrett / Bloomberg via Getty Images / Getty Images)

Also, look for the first of several housing reports coming out this week.

At 10 a.m. ET, the National Association of Homebuilders will release its Real Estate Market Index for August.

The home builders sentiment indicator is expected to remain stable at 55, the lowest since May 2020, after plunging much more than expected to that level last month after high inflation and mortgage rates hurt home sales. and buyer traffic.

It would indicate that just over half of NAHB members consider trading conditions to be good.

Other reports to look out for this week are housing start and building permits on Tuesday and existing home sales on Thursday, both for the month of July.

INCOME REPORTS CONTINUE: A big week ahead for retail earnings, which should give investors a good insight into the health of the US consumer and provide some clarity on the impact inflation is having on corporate profits.

Markets will pay close attention to management’s indications for confirmation of recent data showing that inflation has peaked.

Among the names reported this week are members of Dow Walmart and Home Depot, both on Tuesday morning. We will hear from their smaller rivals, Target and Lowe’s, on Wednesday.

See also the results of Kohl’s department store, TJX Cos. (parent of TJ Maxx) and Ross Stores, warehouse club chain BJ’s Wholesale Club and sportswear retailer Foot Locker, among others.

Ticker Safety Last Change Change %
WMT WALMART INC. 132.22 +2.40 + 1.85%
HD THE DEPOT INC. HOUSE 314.89 +4.20 + 1.35%
TGT TARGET CORP. 172.48 +2.88 + 1.70%
LOW LOWE’S COS. INC. 206.47 +4.29 + 2.12%
KSS KOHL’S CORP. 33.18 +0.56 + 1.72%
TJX THE TJX COS. INC. 65.47 +1.06 + 1.65%
ROST ROSS STORES INC. 90.12 +1.97 + 2.23%
BJ BJS WHSL CLUB HLDGS INC 68.26 -1.30 -1.87%
FL FOOT LOCKER INC. 31.52 +0.68 + 2.20%

Over 90% of the companies in the S&P 500 reported results from April to June, with earnings numbers and revenues much higher than lower expectations.

MARKET REVIEW: US equities rose Friday, with major indices posting gains for the week as investors cheered for signs of slowing inflation.

Ticker Safety Last Change Change %
Me: DJI MEDIA DOW JONES 33761.05 +424.38 + 1.27%
SP500 S&P 500 4280.15 +72.88 + 1.73%
ME: COMP COMPOSITE INDEX NASDAQ 13047.185943 +267.27 + 2.09%

The S&P 500 and Nasdaq Composite both posted their fourth consecutive week of gains. This marked their longest stretch from a winning streak that ended in early November, when they both rose for five weeks in a row.

Investors are hoping that a recent slowdown in consumer price growth will encourage the Federal Reserve to raise interest rates at a slower pace, which in turn could prevent the economy from falling into a recession.

Lower rates tend to drive up the prices of stocks, bonds, and more speculative assets like cryptocurrencies, and shares have faded in part this year due to the Fed’s aggressive rate hikes.

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Although inflation is still close to its highest level in decades, Wednesday’s data showed that it had eased, settling at 8.5% in July compared to 9.1% in June.

Thursday’s data showed that US suppliers raised prices in July at the slowest annual pace since last fall, supported by a drop in energy prices.

On Friday, the S&P 500 was up 72.88 points, or 1.7%, to 4280.15. The Nasdaq Composite jumped 267.27 points, or 2.1%, to 13047.19. The Dow Jones Industrial Average was up 424.38 points, or 1.3%, to 33761.05.

The Dow was up 2.9% for the week. The Nasdaq and the S&P 500 were up more than 3% during the week.

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