California consumer confidence starts 2024 at 7-month high
Despite numerous financial challenges, California shoppers told pollsters that economic conditions were OK in January.
The overall California confidence index started 2024 at its highest level in seven months. January was 4% above December, but it's still flat versus January 2023 and up only 1% versus the 2022-23 average.
The “present situation” slice of the index hit its highest mark in 11 months. That's after this measurement of what's going on right now gained 8% versus December. It's still up only 1% versus January 2023, but it's 5% above the 2022-23 average.
The good news, economically speaking, is that inflation and interest rates are down and job growth continues.
Consumers remained uncertain about the future. The “expectations” slice of the index suffered its lowest start to a year since 2019. This yardstick of a shopper's financial outlook has been stuck in neutral: It was off 1% versus December and January 2023 and is 2% below the 202223 average.
The bad news powering uncertainty is that unemployment has risen slightly, and California homes are still totally unaffordable. Overall consumer confidence is down 8% versus the pre-pandemic 201819 average. The present situation is off 9% versus 2018-19. And expectations are 6% below 2018-19.
Hiring, wage growth slowed in January, according to ADP data
U.S. companies added fewer jobs than forecast at the start of the year, consistent with a gradually cooling labor market.
Private payrolls increased 107,000 in January from a downwardly revised 158,000 gain in December, according to figures published Wednesday by the ADP Research Institute in collaboration with Stanford Digital Economy Lab.
Though hiring slowed, it was broadbased across industries and regions, signaling demand for workers remains healthy. The median estimate in a Bloomberg survey of economists called for a 150,000 increase.
Nominal wage growth continued to slow, the data shows.
Labor demand and wage growth have moderated from their post-pandemic recovery highs in the past year. Data out Tuesday showed fewer Americans are quitting their jobs, an indication they may be less confident they could find a new one or one that pays better.
Recent high-profile job-cuts announcements from companies including UPS and PayPal Holdings Inc. suggest hiring momentum will slow in coming months.
The Fed leaves rates unchanged, signals cuts aren't imminent
The Federal Reserve indicated Wednesday that it's nearing a long-awaited shift toward cutting interest rates, a sign that its officials have grown confident that they're close to fully taming inflation. But the Fed also signaled that the first rate cut is likely months away.
The Fed kept its key rate unchanged at about 5.4%, a 22-year high. In a statement, it signaled a policy shift by dropping previous wording that had said it was still considering further rate hikes.
Still, the central bank said it “does not expect it will be appropriate” to cut rates “until it has gained greater confidence that inflation is moving sustainably” to its 2% target. That suggests that a rate reduction is unlikely in March.
The overall changes to the statement — compared with its last meeting in December — show that the Fed has moved definitively toward considering rate reductions while still maintaining flexibility.
Walmart to construct, convert 150-plus stores in five years
Walmart plans to build or convert more than 150 stores in the next five years, while continuing to remodel existing stores.
The plan, announced Wednesday, marks a big change for the discounter. In 2016, Walmart announced it was slowing new store openings and instead investing in its online efforts, technology and store remodels as it aimed to be more competitive with online behemoth Amazon. A company spokeswoman said the discounter hadn't opened a new store since November 2021.
The news comes as the Bentonville, Arkansas-based chain, like many other retailers, is relying more on its physical stores to fulfill online orders and use them as online pickup locations.