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Beige Book Notes Minimum Wage Increases, Warns Of Building Margin Pressures

via by Tyler Durden on Wed, 18 Jan 2017 19:20:16 GMT

The Fed's latest beige book, perhaps the most boring report released by the Federal Reserve, found 10 of the 12 Fed districts growing at the now ubiquitous "modest or moderate pace" with Cleveland growing only slightly and New York reporting little change for the fourth period in a row.  However, despite stagnant growth, margin pressures are building as input prices are rising faster than final goods prices.

The good news for US workers is that according to the Fed, labor market conditions remained tight in the majority of the districts. Employment growth ranged from slight to moderate and most Districts indicated that wages increased modestly. A couple of Districts mentioned layoffs, but even in those Districts, as in other regions, most responding firms were said to have added employment, on net. District reports cited widespread difficulties in finding workers for skilled positions; several also noted problems recruiting for less-killed jobs. Wages in some Districts were pushed up a bit by increases in the states’ minimum wages and most Districts said wage pressures had increased. The Boston, Philadelphia, Cleveland and Atlanta Fed districts reported further tightening in their labor markets over the period, with wage pressures likely to rise and the pace of hiring to hold steady or increase.

Manufacturing activity appeared to be robust at the end of 2016  into the new year.

"Manufacturers in most Districts reported increased sales with several citing turnaround versus earlier in 2016," the Beige Book said. However, manufacturing activity in Cleveland remained steady due to a seasonal decline in new orders. On the other hand, manufacturers in Cleveland reported a break in layoffs."

Software and IT services firms in Boston reported watching the resurging dollar to see if it affects their clients' interests in the manufacturing sector. Dallas, St. Louis and San Francisco manufacturing sectors echoed these concerns, though the Boston Fed reported foreign investment in commercial real estate in the district unaffected by an appreciating dollar.

The bad news is that any increase in wages is being offset by rising prices as pricing pressures intensified somewhat since the last report. Eight out of twelve Districts saw modest price increases and the remainder experienced slight increases, or flat prices in the case of the Atlanta District. Increases in input costs were more widespread than increases in final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. Retailers’ selling prices were mixed, but on balance were flat or down amidst competitive discounting. Prices of most agricultural commodities stayed flat at very low levels. Home prices were stable or up modestly. Businesses in several districts reportedly expect further modest increases in input costs and selling prices in 2017.

And while the number of mentions of "uncertain" declined from 15 in November, to only 6 in Januar, concerns remains over policy changes in the incoming administration.

The Fed also said most districts said non-auto retail sales expanded, but that several districts noted holiday sales were disappointing. New York, Cleveland, Minneapolis, and Dallas reported disappointing or slugglish consumer spending or retail spending through November and December.

But the most troubling news revolves around the threat to corporate margins because despite the "modest, moderate" growth, margin pressures were said to be building as input prices rose faster than final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. At the same time, retailers’ selling prices were mixed, but on balance were flat or down amidst competitive discounting.

We wonder how long before the Trumpflation rally has some variant of "stag" before it?

5 Signs HCP's Best Days Are Ahead

via Motley Fool Headlines by on Wed, 18 Jan 2017 19:12:00 GMT

Live Stream Of Last Obama Lovefest (a.k.a. "Press Conference")

via by Tyler Durden on Wed, 18 Jan 2017 19:10:08 GMT

In what is certain to be an epic lovefest that would put even Hollywood's mushiest romantic comedy to shame, President Obama will take questions from the press in the White House briefing room for the last time at 2:15 EST today...or whenever he decides to show up. 

According to comments from current White House Press Secretary Josh Earnest, Obama will use his last press conference to, once again, blast the incoming Trump administration's "restrictions on the media" while encouraging the triggered snowflakes of America's leftist networks to "rise to the occasion and adapt to the changing environment."  Per Politico:

In an interview with POLITICO, White House press secretary Josh Earnest said Obama will use his final news conference to highlight his concerns about the restrictions on the media that the president-elect put in place during his campaign and transition, and what it might mean for his administration.

 

“The media environment is challenging, and the news media and the journalists who cover the White House will be challenged to rise to the occasion and adapt to the changing environment,” said Earnest, in an interview ahead of Wednesday. “I know the president is interested in showing his support for their efforts to do that.”

Of course, this closing message from Obama is particularly rich in light of his relentless war against whistleblowers over the past 8 years and repeated attempts to subpoena journalists' phone records.  Even CNN's Jake Tapper was forced to admit that Obama's pursuit of journalists was unprecedented...

“The Obama administration has used the Espionage Act to go after whistleblowers who leaked to journalists…more than all previous administrations combined."

...while the Washington Post, back in 2013 called the Obama administration's "efforts to control information" the most aggressive "since the Nixon administration."

 “The [Obama] administration’s war on leaks and other efforts to control information are the most aggressive I’ve seen since the Nixon administration, when I was one of the editors involved in The Washington Post’s investigation of Watergate.”

And while Obama will undoubtedly cite the recent tussle between Trump and CNN's Jim Acosta as a sign of an aggressive stance that will be taken toward the media by the Trump administration, we would have loved to have seen how Obama would have reacted to a "journalist" calling him "inappropriate" during a press conference.

Of course, in the end, Obama's parting coziness with the press will only serve to further boost Trump's approval ratings.

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