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U.S. recession worries surge again

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An unexpectedly weak U.S. employment report has rekindled worries a recession may be looming, potentially dashing the Federal Reserve’s hopes for a soft landing for the economy.

 

With stock markets reeling on the premise the Fed has now kept interest rates too high for too long, a narrative of a balanced outcome has suddenly been overtaken by bearish sentiment.

Growth and Demand

Most recessions occur when overall economic output, or gross domestic product (GDP), falls significantly. This has not happened, nor does it appear imminent. Growth in the second quarter came in at 2.8% on an annualised basis, double the rate of the first quarter, matching the average growth rate over the three years before the pandemic.

Fed Chair Jerome Powell’s preferred gauge of underlying private-sector demand, final sales to private domestic purchasers, held at 2.6% in the second quarter, aligning with its average of the last 18 months.

Services Sector Strength

The Institute for Supply Management’s services activity index climbed back into expansion territory, with new orders and employment measures rebounding. Similarly, S&P Global’s services activity measure, accounting for two-thirds of U.S. economic activity, remained near its highest in over two years in July.

Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that the surveys indicate ongoing economic growth at a solid annualised 2.2% pace.

Inflation Cooling

High interest rates persist due to the inflation surge in 2021 and 2022, which has been slow to abate. Early 2024 saw an unexpected inflation uptick, delaying potential rate cuts. However, recent data shows inflation nearing the Fed’s 2% target, suggesting that rate cuts may begin soon. The critical question for investors is whether the Fed waited too long to prioritise employment over inflation.

Job Market Signals Recession?

U.S. employers have slowed hiring, adding an average of about 170,000 jobs each month over the past three months, down from 267,000 a month in the first quarter and 251,000 last year.

The unemployment rate rose in July for the fourth consecutive month to 4.3%, the highest since October 2021.

The Sahm rule, indicating a recession when the three-month moving average of the unemployment rate rises by half a percentage point above its low from the previous 12 months, has historically been accurate.

Claudia Sahm, the economist who defined the rule, noted on Bloomberg TV that while the economy is probably not currently in a recession, it is “uncomfortably close.”

Delinquencies on the Rise

The U.S. household debt delinquency rate rose to 3.2% in the first quarter from 3.1% at the end of last year. Although this is below the 4.7% seen before the pandemic, delinquency rates among credit-card borrowers, particularly younger and lower-income groups who have maxed out their credit limits, have increased significantly.

Analysts warn that financial strains on low-income households could ripple through the broader economy.

The New York Fed is set to release second-quarter data on Tuesday.

Recent economic reports have consistently fallen short of economists’ forecasts, with the latest weak employment data exemplifying this trend.

Citigroup’s “Surprise Index” is near a two-year low, reflecting diminished investor confidence in the Fed’s ability to engineer a soft landing for the economy.

What Can Be Done?

The 2020 pandemic recession saw aggressive fiscal and monetary interventions, including rate cuts to zero and massive bond purchases by the Fed, alongside substantial government spending.

This time, the Fed’s policy rate, currently in the 5.25%-5.5% range, provides more room for cuts compared to March 2020. However, high U.S. government debt levels may limit robust fiscal stimulus from the current or next presidential administration.

Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.

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NASA’s Pandora satellite set to search for alien life

NASA’s Pandora satellite set for January launch to search exoplanets for signs of alien life

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NASA’s Pandora satellite set for January launch to search exoplanets for signs of alien life

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In Short:
– NASA and Lawrence Livermore National Laboratory will launch the Pandora Mission on January 5, 2026, to find signs of life.
– The mission will study 20 exoplanets’ atmospheres for biosignatures, utilising an innovative telescope design.

NASA is gearing up to launch the Pandora Mission on January 5, 2026, aboard a SpaceX Falcon 9 rocket from Vandenberg Space Force Base. The compact satellite, developed with Lawrence Livermore National Laboratory, is designed to probe distant exoplanets for signs of life by analyzing their atmospheric composition. This $20 million mission focuses on detecting water vapor and other biosignatures across 20 known worlds.

At the core of Pandora is CODA, a 45-centimeter all-aluminum telescope offering innovative, cost-effective observations in both visible and near-infrared light. By separating planetary signals from the bright light of host stars, scientists hope to confirm the presence of water—a critical ingredient for life as we know it. Each of the 20 target planets will be observed 10 times during planetary transits, enabling continuous 24-hour monitoring sessions.

Pandora arrives amid growing excitement over exoplanet discoveries, including potential biosignatures found on K2-18b in 2025. Its observations will pave the way for future missions, like NASA’s Habitable Worlds Observatory, while rideshare payloads from Spire Global and Kepler Communications join the launch. The mission operations center at the University of Arizona will process all incoming data.


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Trump and Zelenskyy progress on Ukraine peace plan

Trump and Zelenskyy announce Ukraine peace plan is 90% complete amid ongoing territorial disputes and renewed Russian attacks

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Trump and Zelenskyy announce Ukraine peace plan is 90% complete amid ongoing territorial disputes and renewed Russian attacks

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In Short:
– Trump and Zelenskyy discussed a peace plan at Mar-a-Lago, expressing optimism despite unresolved territorial disputes.
– Zelenskyy indicated a 90% agreement on the peace plan, emphasising security guarantees and significant reconstruction funding for Ukraine.

US President Donald Trump and Ukrainian President Volodymyr Zelenskyy have held high-stakes talks at Mar-a-Lago, claiming a revised peace framework to end Russia’s nearly four-year war in Ukraine is now 90% agreed. The meeting followed weeks of negotiations between US and Ukrainian officials and came just hours after Trump held an unexpected phone call with Russian President Vladimir Putin, a move that reportedly caught Kyiv off guard.

Zelenskyy says security guarantees are the central breakthrough, with the plan allowing Ukraine to maintain an 800,000-strong military while receiving NATO Article 5-style protections from the United States and European allies. The proposal also includes an $800 billion reconstruction fund and an accelerated path toward European Union membership. Trump described the talks as “outstanding,” warning that without a deal, the conflict could drag on with devastating human costs.

However, major obstacles remain — particularly over territorial control in the eastern Donbas region and the future of the Zaporizhzhia nuclear power plant. Russia is demanding Ukraine surrender all of Donbas, while Kyiv wants borders frozen at the current battle lines. Washington has floated demilitarised and free economic zones, while Zelenskyy has signalled he may put the full proposal to a national referendum. The talks come as Russia intensifies missile and drone attacks on Kyiv, even as European leaders join calls to shape the next phase of negotiations.


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Ukraine presents US-backed peace proposal to Russia

Ukraine presents US-backed peace proposal to Russia amid ongoing drone strikes and escalating tensions

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Ukraine presents US-backed peace proposal to Russia amid ongoing drone strikes and escalating tensions

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In Short:
– Ukrainian President Zelenskyy offered a 20-point peace proposal to Russia to end the four-year war.
– The plan requires Russian troop withdrawal and includes NATO-like security guarantees for Ukraine’s defence.

Ukraine has formally presented a US-backed 20-point peace proposal to Russia, offering a potential framework to end the nearly four-year war. President Volodymyr Zelenskyy unveiled the revised plan on December 23 after weeks of negotiations with American officials and formally delivered it to the Kremlin on December 24. The proposal includes NATO-style security guarantees, demilitarized zones in eastern Ukraine, and other measures designed to secure Ukraine’s sovereignty while reducing the risk of future conflict.

Under the plan, Ukraine would maintain a peacetime force of 800,000 troops and remain a non-nuclear state, with “Article 5-like” guarantees from the United States, NATO, and European partners. Territorial arrangements would require Russian forces to withdraw from parts of Dnipropetrovsk, Mykolaiv, Sumy, and Kharkiv regions. Zelenskyy also floated the creation of demilitarized “free economic zones” in parts of Donetsk Oblast, but only if Russian troops pull back as well. One of the most contentious issues remains the Zaporizhzhia nuclear power plant, with the US proposing joint management by Ukraine, Russia, and the US, while Zelenskyy countered with a Ukraine-US partnership giving Americans oversight of their allocated energy share.

Fragile reality

Even as peace efforts advanced, the conflict raged on. On Christmas night, Russia launched 131 drones across Ukraine, with 106 intercepted by Ukrainian forces but 22 hitting 15 locations. The attacks killed at least two people and caused widespread power outages in several regions. The strikes highlighted the fragile reality of negotiations, showing that the road to peace remains perilous.

Moscow has confirmed that President Vladimir Putin has been briefed on the proposal, though Russian officials have repeatedly rejected key provisions, including NATO-style security guarantees and territorial concessions. The agreement would be overseen by a Peace Council chaired by US President Donald Trump, with violations triggering automatic sanctions. Ratification would require either approval by Ukraine’s parliament or a nationwide referendum within 60 days, with a full ceasefire taking effect immediately once all parties accept the deal.

The plan represents the most comprehensive effort yet to bring Ukraine and Russia to the negotiating table, balancing security guarantees, territorial compromises, and oversight of strategic infrastructure. However, with ongoing attacks and deeply entrenched positions on both sides, analysts warn that achieving lasting peace will require unprecedented diplomacy and international cooperation.


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