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Obama Adviser to Lead Chicago Fed; Barr Signals Stronger Bank-Capital Rules; November Jobs Report Today

12/02/2022 | 07:16am EST

Obama Adviser to Lead Chicago Fed; Barr Signals Stronger Bank-Capital Rules; November Jobs Report Today By James Christie

Good day. The Federal Reserve Bank of Chicago named Austan Goolsbee as its new president yesterday, succeeding Charles Evans who will hit a mandatory retirement age in January and has served as the bank's president since 2007. Mr. Goolsbee is a professor of economics at the University of Chicago's Booth School of Business and served as chair of the White House Council of Economic Advisers from 2010 to 2011. Also on Thursday, the Fed's vice chairman for banking supervision, Michael Barr, said the central bank is still conducting a broad review of its capital requirements and suggested they appear to be lower than they ought to be. Today, the Labor Department will release employment and wage data revealing how the job market fared in November amid rising interest rates and high inflation. Economists surveyed by The Wall Street Journal expect the jobless rate held at 3.7% and estimate employers added 200,000 jobs last month.

Now on to today's news and analysis.

Top News Austan Goolsbee Named Next President of the Chicago Fed

Austan Goolsbee, who served as a top economic adviser to former President Barack Obama, will become the next president and chief executive of the Federal Reserve Bank of Chicago, the bank said Thursday.

The Chicago Fed president will have a vote on the Federal Reserve's interest-rate-setting committee next year as it faces key decisions about how to battle inflation, which is running near a four-decade high.

Fed's Bowman: We Still Have a Lot of Work to Do

The Federal Reserve will continue to raise its benchmark interest rate in coming meetings, Fed governor Michelle Bowman said on Thursday. "We still have a lot of work to do to bring our policy rate to a level that is sufficiently restrictive to bring down inflation over time," Ms. Bowman said in a talk at the KBW CEO Strategy Forum. At the same time, as the central bank's benchmark rate gets closer to restrictive territory, Ms. Bowman said it will be appropriate for the Fed to slow the pace of rate increases. (MarketWatch)

Fed's Top Banking Regulator Signals Tougher Bank-Capital Rules

The Federal Reserve's new regulatory chief on Thursday signaled plans to beef up big-bank capital requirements , potentially revisiting financial rules that were eased during the Trump administration.

U.S. Economy November Employment Report Will Update on Labor Market Tightness

Friday's employment report will reveal how the labor market fared in November amid rising interest rates and high inflation.

The job market has remained resilient this year, with employers still seeking to hire despite an uncertain economic outlook and elevated recession fears. Low unemployment and wage gains have helped fuel consumer spending, the economy's main engine.

The Labor Department will release November employment and wage data on Friday at 8:30 a.m. ET.

Consumer Spending Jumped in October as Inflation Eased

Personal spending rose 0.8% in October from September, the Commerce Department said, adding its inflation gauge-the personal-consumption expenditures price index-rose 6% from a year earlier.

Senate Votes 80-15 to Pass Measure Blocking Railroad Strike

Senate lawmakers passed a bill to prevent a nationwide strike by railroad workers, a move expected to end a long-running labor dispute between Union Pacific Corp., CSX Corp. and other railroads and more than 115,000 workers.

U.S. Jobless Claims Fell Last Week, Showing Solid Labor Market

Initial jobless claims, a proxy for layoffs, decreased by 16,000 to a seasonally adjusted 225,000 last week, the Labor Department said, near the 2019 weekly average of around 218,000, when the labor market was also robust.

Layoffs Hit White-Collar Workers as Amazon, Walmart, Others Cut Jobs Weekend Read: A Survival Guide to Inflation

C-suite executives and other business leaders are planning for a period where inflation is sticky, interest rates are rising, the geopolitical landscape is fraught with tumult and economies across the globe are slowing.

Here's a guide from WSJ's C-suite newsletters on how executives are tackling these challenges:

The C-Suite Survival Guide to Inflation and Economic Turbulence Zero-Based Budgeting, Currency Hedges Among Tools CFOs Can Use CIOs Can Play Key Role in Guiding Companies Through Slowdown How to Take Advantage of the Logistics, Supply-Chain Slowdown Marketers Must Be Flexible, Without Losing Identity, Amid Uncertainty Key Developments Around the World Biden Open to 'Tweaks' to Subsidies That Angered U.S. Allies

President Biden said he was open to making concessions to American allies who objected to new U.S. subsidies for manufacturers, but he didn't commit to specifics after meeting with French President Emmanuel Macron

Chinese Solar Manufacturers Dodged U.S. Tariffs, Probe Finds

Four leading Chinese solar-cell manufacturers circumvented U.S. tariffs by routing some of their operations through Southeast Asia, a Commerce Department investigation found, according to people familiar with it.

Ukraine Hunts the World for Parts to Fix Crippled Energy Grid

As Russia targets Ukraine's energy grid with missiles and drones, Kyiv is running out of vital parts needed to repair a network that provides electricity for homes, businesses and hospitals across the wartorn country.

Financial Regulation Roundup Supreme Court Agrees to Decide Mass Student-Loan Forgiveness

The Supreme Court agreed to decide whether the Biden administration can cancel student-loan debt for millions of Americans, putting the matter on a fast-track timeline that should produce a final ruling by the end of June.

Deluge of Fraud Claims Adds to Concerns About Credit Scores

The consumer credit-scoring system in the U.S. has long been opaque and confusing , and now one change that was intended to help people navigate the system has created a whole new set of problems.

Report: Fintech Firms Oversaw Billions in Fraudulent Covid Aid Loans

Financial technology companies oversaw a disproportionately high rate of fraudulent loans through the Paycheck Protection Program to provide small business loans during the pandemic, a congressional report says.

Credit Suisse Struggles to Win Back Investors

Credit Suisse Group AG's $4.2 billion share sale and sweeping restructuring were supposed to regain the market's confidence. Instead, more investors are betting against the bank, Switzerland's No. 2 bank by assets.

Forward Guidance Friday (all times ET)

8:30 a.m.: Canada labor force survey for November; U.S. employment report for November

10:15 a.m.: Chicago Fed's Evans speaks at Kaufman Center for Financial and Policy Studies: The Role & Effectiveness of Financial Regulation

1:15 p.m.: Chicago Fed's Evans speaks at 36th Annual Chicago Fed Economic Outlook Symposium

9:40 p.m.: ECB's Lagarde chairs roundtable on 'The global dimensions of policy normalisation' at Bank of Thailand's 80th Anniversary Conference

Monday

4 a.m.: Eurozone Services PMI for November

10 a.m.: ISM Report on Business Services PMI for November

Research NFIB Says Number of Unfilled Job Openings Down in November

The number of U.S. small-business owners reporting unfilled job openings declined in November to its lowest level since April of last year, the National Federation of Independent Business says. Bill Dunkelberg, NFIB chief economist, says "the small business economy is recovering, but owners continue to face ongoing labor troubles throughout the country." In November, a seasonally-adjusted 44% of small-business owners said they had job openings they couldn't fill, NFIB says. Also last month, a seasonally adjusted 18% of small-business owners said they planned to create jobs, the lowest level since February of last year, according to NFIB.

-Stephen Nakrosis

Brazil's Lula Likely to Be Pragmatic

Luiz Inácio Lula da Silva, Brazil's left-wing president-elect, is likely to take a pragmatic approach after he takes office on Jan. 1, says Mário Braga, senior analyst for Brazil at Control Risks. Mr. da Silva faces a conservative Congress that will require him to negotiate on much legislation, and will probably adopt similar policies to those of his first two terms in office from 2003 to 2010, Mr. Braga says. Mr. da Silva will also try to avoid the economic problems that troubled his protégée, Dilma Rousseff, while she was in office amid more subdued economic growth in 2023 than Brazil has enjoyed this year, according to Mr. Braga.

-Jeffrey T. Lewis

Commentary Two Fed Mandates Enter, One Mandate Leaves

Considering how much the Federal Reserve has raised rates, and how rate increases take time to work their way through the economy , it is hard to imagine the labor market won't weaken in the months ahead, Justin Lahart writes.

The Weak Yen Is a Mixed Blessing for Japan Inc.

The weak yen has been a mixed blessing for the Japanese stock market, and with the Fed now seemingly set to slow the pace of interest-rate increases, both Japan's currency and its stocks may benefit, Jacky Wong writes.

(MORE TO FOLLOW) Dow Jones Newswires

12-02-22 0715ET

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.01% 0.6485 Delayed Quote.1.97%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.86% 0.70854 Delayed Quote.3.48%
BRITISH POUND / EURO (GBP/EUR) -0.21% 1.1218 Delayed Quote.0.32%
BRITISH POUND / US DOLLAR (GBP/USD) -1.01% 1.22598 Delayed Quote.1.76%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.53% 0.687668 Delayed Quote.0.33%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.27% 0.75111 Delayed Quote.1.80%
EURO / BRAZILIAN REAL (EUR/BRL) -1.54% 5.4664 Delayed Quote.-2.69%
EURO / US DOLLAR (EUR/USD) -0.80% 1.09238 Delayed Quote.1.48%
INDIAN RUPEE / EURO (INR/EUR) 0.32% 0.011173 Delayed Quote.-0.36%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.36% 0.012194 Delayed Quote.1.10%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.40% 0.64889 Delayed Quote.1.40%
US DOLLAR / EURO (USD/EUR) 0.81% 0.915457 Delayed Quote.-1.46%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 0.38% 70.0023 Delayed Quote.-2.01%
WALMART INC. -0.71% 143.57 Delayed Quote.1.47%
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