How are you? (December 4-10)
Employee frustrations with wages
In September a wave of strikes and other labor actions began in Britain, largely triggered by workers’ frustration that wages could not keep pace with rising inflation. That wave is now intensifying, with hundreds walking off the track last week. About 600 workers from a non-profit housing organization went on a two-week strike, 200 workers from a brewery went on strike, and several dozen workers from a pickle factory walked out. (According to the union representing these workers, that could lead to beer and pickle shortages during the holiday season.) But that may be just the beginning: Workers in several industries, including healthcare and transportation, are on the rise about to strike and labor actions are planned every day at Christmas. Pay remains the focal point in most cases, especially in the public sector, as the UK government under Prime Minister Rishi Sunak seeks drastic cuts. Mr Sunak has said he is working on “tough new laws” against these strikes.
Relief at the gas pump
Travel this winter — if you’re going by car — is likely to be much cheaper than in the summer, when gasoline prices in the United States hit a record national average of $5 a gallon. Last week, the national average price for gas fell to $3.33 per gallon, according to AAA, almost exactly where prices stood a year ago, when the national average was $3.34. Prices have been driven down by a decline in global energy demand and falling oil prices just in time for the holiday season. It’s a rare bright spot for consumers who are still dealing with uncomfortably high prices elsewhere in the economy, even as inflation begins to lose its grip. But that could all change as China eases its Covid restrictions and oil supplies tighten due to the new embargo on Russian oil.
China eases ‘Zero Covid’
China’s economy has suffered from strict “zero Covid” policies that have closed businesses and caused record levels of youth unemployment. But as the country begins to reverse those measures in response to widespread protests, economic uncertainty remains. Analysts say consumer spending is unlikely to recover quickly after being suppressed for so long, and the country faces a housing crisis as well as declining demand from trading partners that may be approaching a recession. China is also bracing for a surge in Covid cases as restrictions are lifted. Still, optimistic investors hoping for a recovering economy have pushed equity markets in Hong Kong and Shanghai higher.
What’s next? (December 11-17)
High hopes for a more dovish Fed
For many consecutive months, Federal Reserve officials have disappointed—and frightened—investors eager to see the central bank slow the pace of its aggressive rate hikes. But they may be pleased with the outcome of Wednesday’s Fed meeting, as Fed Chairman Jerome H. Powell has signaled that policymakers will begin to moderate their approach. Analysts expect an increase of half a percentage point, compared to the three-quarter percentage point increases during the last four meetings. While the Fed has tried to cool demand and slow down the economy, it has been aware that it could go too far and plunge the country into recession. “My colleagues and I don’t want to over tighten,” said Mr. Powell last month.
New inflation data
Leading up to Wednesday’s Fed meeting, officials will get one last piece of data to fill in the picture of the economy’s direction. The consumer price index on Tuesday is expected to show inflation to moderate further, with analysts predicting prices to have risen 7.3 percent in November, up from 7.7 percent in October. Last month’s report was an encouraging development for both US consumers and Fed officials, who have begun to worry that inflation is becoming more entrenched and feeding itself into a wage-price spiral, in which high prices drive wage increases that then lead to even higher Prices.
Congressional hearings on FTX
Fallen crypto tycoon Sam Bankman-Fried has agreed to appear before the House Committee on Financial Services this week to answer lawmakers’ questions about the stunning implosion of the crypto exchange he founded, FTX. But even as he said he was willing to testify and promised to shed light on topics such as what led up to the crash and how his own shortcomings contributed to it, Mr. Bankman-Fried raises expectations with warnings that he “wouldn’t be that usefulas he would like to be. He has also evaded similar requests from the Senate Banking Committee to testify, and the chair of that panel, Ohio Democrat Senator Sherrod Brown, has told Mr. Bankman-Fried that he is willing to compel his testimony through a subpoena if he didn’t. answers. These hearings are just a fraction of the series of investigations facing the young crypto founder around the world as investigators try to learn more about how billions of dollars in client money went missing.
Morgan Stanley lays off 2 percent of its global workforce. Ramesh Balwani, Elizabeth Holmes’ number 2 at the failed blood startup Theranos, was sentenced to nearly 13 years in prison on Wednesday for fraud. And Janet L. Yellen became the first woman secretary of the treasury to sign US banknotes, which were unveiled Thursday.