| | | | | | | | | | | Axios Markets | | By Emily Peck and Matt Phillips · Jul 07, 2022 | | Welcome back! Big morning so far: U.K. Prime Minister Boris Johnson agreed to step down. Investors liked this. The British pound jumped on the news. We've got lots more to share today, though. Let's get into it: Today's newsletter, edited by Kate Marino, is 1,036 words, 4 minutes. | | | | | | 1 big thing: Markets hope for Goldilocks jobs report |  | | | Illustration: Annelise Capossela/Axios | | | | Late last year, the release of the Consumer Price Index supplanted the employment report as the most anticipated data dump of the month, Axios' Hans Nichols and Neil Irwin write. - Now, with the Fed trying to navigate between growth and inflation, tomorrow's jobs report is once again front burner.
The big picture: "The CPI has gotten all the attention for the past 18 months, but with the U.S. on recession watch, the jobs report is back as the most important data every month," said Doug Holtz-Eakin, president of the American Action Forum. State of play: For Wall Street — and Washington — the numbers carry risk in both directions. - If they show a combination of massive job creation and wages rising more rapidly, the Fed likely would lean more into its interest-rate rising campaign — creating a higher risk of a recession later in the year or in 2023.
- On the other hand, if the numbers disappoint in a major way — with net job losses or a meaningful rise in the unemployment rate — it will fuel worries a recession has already begun.
"The jobs numbers are some of the most immediate, real-time indicators of the economy so are the first place we look for signs of recession," says Austan Goolsbee, who served as one of former President Obama's chairs of the Council of Economic Advisers. - Some data in the jobs report provide a "better estimate of inflationary pressure than the direct measures of inflation itself," Goolsbee says.
The Goldilocks scenario is the hope of both financial markets and the Biden administration as we head into midterm elections: an economy still expanding, with workers able to find jobs readily without further tightening of the labor market to goad the Fed into raising rates too far too fast. - White House economists are paying particularly close attention to labor force participation, hoping for it to surge and thus increase the supply of workers in the economy — which all else equal would tend to dampen inflation pressures.
What's next: The Department of Labor report, set to land at 8:30am ET tomorrow, will reveal how many new jobs the economy is adding — the most reliable barometer of how confident businesses are about future growth. - Economists expect the jobless rate to hold steady at 3.6% and for the economy to have added approximately 270,000 jobs in June.
|     | | | | | | 2. Catch up quick | | 🌾 Investigation shows Russia stealing Ukraine grain. (WSJ) 🇨🇳 China IPO applications jump, bucking global trend. (Reuters) 📝 Rare IRS audit targets two Trump enemies. (NYT) | | | | | | | | 3. Crypto dominoes are falling |  | | | Illustration: Rae Cook/Axios | | | | Crypto brokerage Voyager Digital yesterday filed for Chapter 11 bankruptcy, Axios Pro's Ryan Lawler reports. Why it matters: Fallout from the digital asset collapse and bad debt from crypto hedge fund Three Arrows Capital (3AC) continues to work its way through the industry and has now led to two bankruptcies. State of play: Last week, Voyager suspended all trading, deposits and withdrawals from its platform — citing market conditions and a notice of default that it issued 3AC, which itself also filed for bankruptcy. - Voyager said that, through the reorganization plan, customers with crypto in their accounts would receive some combination of crypto, common shares in the newly reorganized company, Voyager tokens, and proceeds of funds recovered from 3AC.
- Customers with U.S. dollar-denominated deposits will receive access to those funds after a reconciliation and fraud prevention process.
Worth noting: A firm tied to Sam Bankman-Fried, the CEO of crypto exchange FTX, is Voyager's largest unsecured creditor, with a $75 million loan outstanding. What we're watching: Voyager is far from the only struggling crypto firm to face tough decisions as a result of 3AC's collapse and subsequent crypto contagion. Read the full story ... and for more like it, subscribe to Axios Pro: Fintech Deals. | | | | | | | | A message from Axios | | Get your first Axios Pro newsletter tomorrow | | |  | | | | Subscribe to Axios Pro today to see everything you've been missing. How it works: Axios Pro unlocks daily premium newsletters, exclusive deals reporting, subscriber-only events, networking opportunities and more. Use code PRO200 at checkout to get $200 off your subscription. | | | | | | 4. The layoffs site everyone's using |  Data: Layoffs.fyi; Chart: Axios Visuals One sign of the economic times: A website that tracks startup layoffs is serving as a recruiting tool, says Roger Lee, who founded the site, layoffs.fyi, back in March 2020, Emily writes. Why it matters: Despite what you're hearing about a recession, the job market has been chugging along. We're waiting on the jobs report to get a better sense of things, as Neil and Hans explain above. State of play: While layoffs started to pick up this spring, they've so far been contained mostly to fintech or lending, as well as crypto and real estate — the companies most directly affected by the Fed raising rates, Lee points out. - Lee's site, which tracks startups and tech companies that recently went public, is a good resource to keep up with (and use to cherry-pick talent).
- "Recruiters and companies are emailing me," Lee tells Axios. They're sending thank you notes because they've used the site — which features spreadsheets with contact information of laid-off workers — to hire. Some are asking him if they can plug his data directly into their recruiting software.
Driving the news: Data out yesterday signaled there was some cooling off in May — but still plenty of jobs and not many layoffs overall, as our friends at Axios Macro explained. - Lee's website shows that June saw a surge in layoffs among startups. The site tracks just those that are publicly reported, likely understating the situation somewhat, he says.
- Behind the surge: Both startup funding and customer demand have cooled — companies need to manage costs accordingly, says Axios' venture capital reporter Kia Kokalitcheva.
Flashback: About 20 years ago, a website called F'd Company tracked layoffs in the startup world with a level of snark that Lee, who was in high school back then, intentionally avoids. - "Layoffs are not fun for anybody," he says. "These are real people."
Go deeper. | | | | |  | | | | If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. | | | | | | | | 5. What were they thinking? | | "The economic outlook warranted moving to a restrictive stance..." — from the minutes of the FOMC policy meeting that concluded June 15. New details emerged yesterday that help explain why the Fed moved aggressively last month, raising rates by 0.75 percentage points when they'd previously signaled a half-point hike: a "break the glass moment," as Axios' Neil Irwin wrote then. Why it matters: The minutes show that the policy committee was worried that inflation would become "entrenched," which would make it harder to tamp down — and push the public to question the Fed's resolve, as Neil explains. Go deeper. | | | | | | | | A message from Axios | | Get your first Axios Pro newsletter tomorrow | | | | | | | | Subscribe to Axios Pro today to see everything you've been missing. How it works: Axios Pro unlocks daily premium newsletters, exclusive deals reporting, subscriber-only events, networking opportunities and more. Use code PRO200 at checkout to get $200 off your subscription. | | | | 📫 1 thing Emily loves: all your emails! You all shared so many great mall memories yesterday. Here's one from reader Tom Broad: "When I moved to Kansas City for a job in 1981, I took a trip to Oak Park Mall. Having grown up in small-town Nebraska, I had never seen a mall so big," he writes. "When I left the mall, after visiting Montgomery Ward (remember them?), Walden Books, and, of course, Spencer Gifts, I couldn't find my car. Walked and walked around the lot." "Mall Security put me in the golf cart and we toured the massive lot." Finally, they discovered his 1965 Mustang on a totally different level of the mall, which was built on hilly terrain. "Goll-ee, Oak Park Mall was huge!" he writes. Keep the emails coming! |  | | Why stop here? Let's go Pro. | | | | | | Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here.
Sponsorship has no influence on editorial content. Axios, 3100 Clarendon Blvd, Arlington VA 22201 | | | You received this email because you signed up for newsletters from Axios.
Change your preferences or unsubscribe here. | | | Was this email forwarded to you?
Sign up now to get Axios in your inbox. | | | | Follow Axios on social media:    | | | | | |
No comments:
Post a Comment