Good day. Federal Reserve Bank of Richmond President Thomas
Barkin said Friday that the Fed is fast approaching a decision on
reducing its $120 billion a month in asset purchases. "I do think
we've come a long way on both the labor market and certainly on
inflation against our goals since December, so I'm supportive of
beginning the process of normalization," he said on CNBC.
Elsewhere, China's economic growth slowed sharply in the third
quarter, reflecting a range of factors, including policy makers'
decision to pare back stimulus enacted in the immediate aftermath
of the pandemic last year. Disruptions to supply chains also
restrained growth in China and they are expected to keep upward
pressure on prices and, increasingly, curb output in the U.S. well
into next year, according to economists surveyed this month by The
Wall Street Journal.
Now on to today's news and analysis.
Top News
Fed's Barkin Says He Is Open To Taper Debate
Richmond Fed President Thomas Barkin declined to say when he
would like the central bank to pull back on its asset-buying
stimulus effort, but said that time is drawing closer.
"We're going to have a discussion in November on tapering," Mr.
Barkin said on CNBC on Friday, in reference to the early November
rate-setting Federal Open Market Committee meeting.
U.S. Economy
Supply-Chain Bottlenecks, Elevated Inflation to Last Well Into
2022
Uncomfortably high inflation will grip the U.S. economy well
into next year, as constrained supply chains keep upward pressure
on prices and, increasingly, curb output, according to economists
surveyed by The Wall Street Journal.
Retail Sales Rise, Showing Resilient U.S. Consumers
Retail sales rose a seasonally adjusted 0.7% in September from
August, the Commerce Department said, as households shrugged off
supply constraints, the Delta variant and the end of enhanced
unemployment benefits.
Unions Push Companies as Workers Stay Scarce
Union leaders are pressing to increase their ranks and secure
gains for their members as workers demand more from their employers
and companies struggle with labor shortages and snarled supply
chains.
What's Driving America's Workers to Leave Jobs in Record
Numbers
In August, a seasonally adjusted 4.3 million resignations were
handed in, according to the Bureau of Labor Statistics. Though
August is a traditionally high turnover month, in part because many
teens and 20-somethings leave jobs to go back to school, the figure
sets a record since the BLS started tracking it in 2000.
Largest Cities Had Some of the Lowest U.S. Inflation in
September
While prices in the U.S. rose across the board for the year
ended last month, the degree of change varied among different
geographic regions and populations. Among the metropolitan areas
surveyed, the largest and most urban places had some of the lowest
price increases.
Glynn's Take: Australian Immigration Push Might Meet Solid
Opposition
By James Glynn
Australia's economic growth has long been reliant on high
immigration, but as Covid-related lockdowns end and the country
looks to throw open international borders, there is a growing
debate about accepting more immigrants that could reshape the
economy's outlook. Read more.
Key Developments Around the World
China's Third-Quarter Economic Growth Slows Sharply to 4.9%
China's economy grew 4.9% in the third quarter from a year
earlier, slowing from the previous quarter's 7.9% growth, as power
and supply-chain problems added to the impact from efforts to rein
in the real estate and technology sectors.
Inflation Sets Off Alarms Around the World
More than a dozen central banks have raised interest rates in
response to sharp consumer-price increases, but two that haven't
are those that loom largest over the global economy: the Federal
Reserve and the European Central Bank.
Australian Bond Yields Spooked by Surging New Zealand
Inflation
Bank Indonesia Likely to Stand Pat as Economy Signals
Recovery
Indonesia's central bank is likely to keep its seven-day reverse
repo rate unchanged at 3.5%, according to all six analysts polled
by the Wall Street Journal. As Indonesia's economy is showing early
signs of recovery, the pressure for more monetary policy support
seems to be easing, ANZ says. Indonesia's economy is likely to
continue improving as the government gradually eases
coronavirus-related curbs and as commodity prices rise, the bank
adds. ANZ expects Bank Indonesia to keep its policy rate unchanged
for the rest of the year and to gradually raise rates in late 2022.
The central bank's decision is due on Tuesday. (Dow Jones
Newswires)
Italy's Tough Covid-19 Mandate for Workers Prompts Protests
Italians returned to workplaces Friday needing to show proof
they received a Covid-19 vaccine, tested negative or recovered from
the virus, a policy that could provide a preview of a similar
mandate planned by the Biden administration.
Financial Regulation Roundup
Evergrande Spillover Risks Can Be Controlled, Central Bank
Says
China's central bank sought to ease concern about potential
contagion from China Evergrande Group's debt crisis, saying the
risk of the developer's problems spilling over into the financial
system was controllable.
Goldman Sachs Cleared to Own All of China Unit
Chinese regulators approved Goldman Sachs Group's application to
take full ownership of a key local unit, another step in China's
gradual opening of its financial system to major players from the
U.S. and elsewhere.
Stablecoin Giant Tether Hit With $41 Million Fine
Tether Ltd., the largest stablecoin issuer, agreed to pay a
federal regulator a $41 million penalty Friday, the latest result
of the Biden administration's broader crackdown on cryptocurrency
markets.
Data Concerns Drag Down U.S.-Listed Chinese Brokers
Shares in online brokers Futu Holdings Ltd. and Up Fintech
Holding Ltd. fell sharply, after Chinese state media said the
country's tough new data-privacy laws would pose challenges for the
two Nasdaq-listed companies.
Bitcoin Price Reaches $60,000 as Traders Anticipate ETF
Bitcoin hit $60,000 Friday for the first time since April, as
traders anticipate U.S. regulators will approve the first
exchange-traded fund to track the cryptocurrency. Approval of an
ETF that will buy bitcoin futures contracts -- though not the coins
themselves -- would increase the cryptocurrency's legitimacy and
make it easier for institutional investors to get exposure. Four
applications for bitcoin futures ETFs are pending approval from the
SEC.
Forward Guidance
Monday (all times ET)
9:15 a.m.: Federal Reserve releases September U.S. industrial
production
10:30 a.m.: Bank of Canada releases business outlook and
consumer expectation surveys
11:40 a.m.: Central Bank of Canada's Lane speaks on panel on
harnessing innovation for the public interest
2:15 p.m.: Minneapolis Fed's Kashkari speaks at forum on
minorities in banking
Tuesday
Time N/A: National Bank of Hungary releases policy statement;
Bank Indonesia releases policy statement
7:10 a.m.: European Central Bank's Elderson gives keynote
speech
8 a.m.: European Central Bank's Panetta speaks at ECB-Cebra
conference on digital currencies and fintech
8:30 a.m.: U.S. Commerce Department releases September housing
starts
10 a.m.: European Central Bank's Lane speaks on panel on central
bank strategy reviews at Bank of Finland-Suerf conference
11 a.m.: San Francisco Fed's Daly speaks at the regional bankers
forum
1 p.m.: Atlanta Fed's Bostic speaks at Fed event on exploring
careers in economics
1:15 p.m.: Fed's Bowman speaks at Richmond Fed conference on
gender diversity and leadership in the boardroom and C-suite
2:50 p.m.: Atlanta Fed's Bostic speaks in interview with the
Hill's Editor-at-Large Steve Clemons
3 p.m.: Fed's Waller speaks on economy at Stanford Institute for
Economic Policy Research meeting
Commentary
Heroic American Shoppers Braved High Prices, Low Inventory
There are a lot of worries about what supply-chain problems
might do to the holiday shopping season, but people's willingness
to spend might hinge on whether they feel the U.S. is on course to
escape the pandemic, Justin Lahart writes.
Basis Points
Consumer sentiment in the U.S. fell slightly in early October as
the spread of the Covid-19 Delta variant and supply-chain strains
weighed on Americans' mood. The preliminary estimate of the index
of consumer sentiment released Friday by the University of Michigan
decreased to 71.4 from 72.8 in September. Economists polled by The
Wall Street Journal expected a 73.0 reading. (Dow Jones
Newswires)
U.S. manufacturing and trade inventories increased 0.6% on month
in August, the Department of Commerce said. Stocks rose on month by
1.2% at wholesalers, by 0.6% at manufacturers and by 0.1% at
retailers. Stockpiles remained lean relative to demand: the ratio
of inventories to sales was 1.26 in August, compared with 1.25 in
July and 1.35 a year earlier. (DJN)
Prices of goods imported to the U.S. rose 0.4% on month in
September following a 0.3% drop in August, the Bureau of Labor
Statistics said. The advance was led by higher petroleum prices,
which rose 3.9% in the month after falling 3.2% in August. On an
annual basis, prices for U.S. imports increased 9.2%, compared with
an 8.9% rise in August. (DJN)
The median U.S. home sale price rose 14% year-over-year to
$376,800 in September, the lowest growth rate since December 2020,
according a Redfin report. September was the 14th consecutive month
of double-digit price gains. (DJN)
Canadian wholesale sales rose 0.3% on a seasonally adjusted
basis in August to 70.27 billion Canadian dollars, or the
equivalent of US$56.81 billion, Statistics Canada said. This marked
the first month-over-month increase after two straight months of
declines. In volume, or price-adjusted terms, sales also rose 0.3%
in August. (DJN)
Singapore's non-oil domestic exports rose at a
faster-than-expected 12.3% pace in September from a year earlier,
thanks to growth in shipments of electronics, pharmaceuticals,
machinery and petrochemicals, Enterprise Singapore said. (DJN)
New Zealand's consumer-price index rose 4.9% from a year earlier
in the third quarter and increased 2.2% from the second quarter,
Statistics New Zealand said. The quarterly increase was the largest
since the October-December quarter of 2010, reinforcing
expectations for higher interest rates. (DJN)
(END) Dow Jones Newswires
October 18, 2021 08:46 ET (12:46 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.