Third-quarter earnings are indicating a divided economy
With more consumer companies preparing to report third-quarter earnings this week, Wall Street will be watching for signs of a bifurcated or “K-shaped” economy as consumers diverge in their spending behaviors.
There have been increasing signals that wealthier Americans are spending more while lower-income Americans are significantly paring back their spending. Lower-income consumers have been hit hardest by rising inflation and escalating prices on essentials, with September’s consumer price index report indicating a 0.3% increase on the month, putting the annual inflation rate at 3%.
Shortly after the CPI report was released, the Federal Reserve on Wednesday approved its second straight interest rate cut, lowering its benchmark overnight borrowing rate to a range of 3.75% to 4%.
SNAP update: Trump admin will pay 50% of food stamp benefits in November amid shutdown
The Trump administration told a Rhode Island federal judge on Monday that it would tap billions of dollars in contingency funds to pay 50% of the normal amount of SNAP benefits in November as the U.S. government shutdown persists.
The Supplemental Nutrition Assistance Program provides food stamps to about 42 million low-income Americans.
The administration in a court filing told Judge Jack McConnell that it had declined the option he suggested to make full November payments for SNAP benefits by using at least $4 billion from the Child Nutrition Program, as well as from other unspecified funds.
Industry leaders say signs of economic meltdown undeniable…
Warning signs are flashing in all corners of the US economy as regular Americans are under increasing pressure.
Just last week, tens of thousands of workers were laid off by major companies including Amazon, UPS and General Motors.
Meanwhile, one of the largest casino and resort operators in Las Vegas, which runs hotels such as Caesars Palace, admitted that 90,000 rooms sat empty this summer as Americans shunned expensive vacations.
GOOLSBEE: Inflation ‘going wrong way’…
Chicago Federal Reserve president Austan Goolsbee said he is undecided about whether to cut interest rates again in December.
The threshold for cutting again is higher, he said, given inflation concerns and lack of official economic data.
“I’m not decided going into the December meeting,” Goolsbee told Yahoo Finance in an interview Monday. “I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for 4.5 years and it’s trending the wrong way.”
