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Mo News: The Economy Gets A Report Card This Week
Mosheh Oinounou
July 25, 2022
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Hi everyone!
Hope you were all able to stay 😎 this weekend as much of the country roasted under record temperatures. A heads up to all of you in the Pacific Northwest: You are up next this week.
Here is what we are reporting on today:
We will finally find out if the US is in a recession...or so we think;
Why the World Health Organization declared Monkeypox an emergency and what it means;
The latest on the explosive wildfire near Yosemite National Park;
Who is actually to blame for the terrible year for air travel;
A controversial jail sentence for a US military officer in Japan;
What the record Mega Millions jackpot is now up to;
And as always, Good Mood Monday to start the week right.
🎙And before we start, big Mo News News! Based on your feedback, we are taking our podcast daily! Be sure to subscribe to the show on your podcast app of choice to ensure it is ready to go every morning. Apple | Spotify | More Platforms
I will also see you tonight at 9pmET for my regular Mondays with Mosh Instagram Live. Bring your questions and comments!
~ Mosh
💰SO, ARE WE IN A RECESSION OR NOT?
What could be the busiest and most important week of the summer for the US Economy is here:
🏦 The Federal Reserve is expected to deliver another three-quarter point rate hike as it fights inflation;
📈 Critical economic reports (including Second Quarter GDP numbers) could provide more clues into whether the economy is in a recession;
💰 Heavy-hitters like Apple, Microsoft, and Alphabet (Google’s parent company) will report their latest earnings;
The Fed In Focus
All eyes are on the Federal Reserve and their two-day meeting on Tuesday and Wednesday. They are expected to raise interest rates… again.
Why? Two words: fighting inflation. And the weapon of choice (interest rates) is a double-edged sword.
United States (year over year) Inflation Rate
The US central bank is doing a delicate balancing act. It's trying to slow down record-high inflation, but keep the economy growing – all while trying not to trigger a recession. It is a goal we can all understand this summer, when controlling the AC: Cool things down but not so much you need a sweater.
How high will they go? The Fed is expected to raise interest rates by another 75 basis points--the fourth rate increase in five months. That would bring the federal funds rate to between 2.25-2.5%. The Fed has been criticized, though, for waiting too long before taking inflation seriously. Some economists say these rate hikes might be too late and too drastic to safely achieve Fed goals.
Driving the decision: While inflation is the largest force driving interest rate hikes, some other factors that go into the decision include the job market, economic growth, the stock market, and manufacturing activity.
State of the Economy
Several major economic reports this week will also paint a clearer picture of just how close the U.S. economy is to a recession.
GDP: Topping the list is Thursday's second-quarter Gross Domestic Product (GDP) report. It will reveal whether the U.S. economy expanded or shrunk in the second quarter of 2022 (April, May, and June).Economists' Expectations: No bueno. Exact estimates vary, but many economists predict the economy will likely contract again, for the second straight quarter.Why that streak matters: One standard for measuring if you are in a recession is two consecutive quarters of negative growth. However, the White House and a number of economists disagree. They point to other factors like hiring and consumer demand--which remain strong--as key to determining a recession.The latest numbers will set off a long debate of "are we or aren't we," since the official organization that designates recessions, the National Bureau of Economic Research, won't make their assessment for several more months. Axios explains more in their story, obviously headlined, "A weird economy may give way to a recession -- or not." And, here is even more on why we won't officially, officially be in recession via SeekingAlpha.
Other key reports: On Tuesday, we’ll get new numbers on home prices, new home sales, and consumer confidence. Personal Consumption Expenditures, or PCE, will be released on Friday morning. This report is another way to measure inflation, and will show how much the prices of goods and services rose in the month of June.
Big Tech On Deck
It's a tech-heavy week for corporate earnings. The country’s two largest companies, Microsoft and Apple, will report earnings this week. We’ll also hear from Alphabet (Google’s parent company), Amazon, and Meta (formerly Facebook). All in all, more than a third of the S&P 500 companies are reporting their financial numbers.
🌡🚨 MONKEYPOX EMERGENCY
The World Health Organization (WHO) has officially declared the Monkeypox outbreak a global public health emergency. The decision has been debated for weeks, sparking disagreement among WHO panel members.
What constitutes an emergency? WHO defines a public health emergency of international concern or as “an extraordinary event” that poses a “public health risk to other states through the international spread of disease.” It often requires an international response.
The great debate: Last month, a panel of experts decided monkeypox did not qualify as a global public health emergency, mostly because the severity is different in different areas of the world (in Europe and the U.S., for example, the virus is mild - but in Africa, cases are much more severe.) It was a controversial move that was revisited Saturday, and after much debate, the WHO reversed its original decision. Even though the panel was still split, WHO Director-General Tedros Adhanom Ghebreyesus decided the Monkeypox outbreak was worth declaring an emergency.The arguments: Advocates for the public health emergency said it is important to elevate attention for the virus while it can still be contained. Those opposed to the decision argued the conditions of the outbreak were largely unchanged since they last met in June, and pointed to the mild severity of the disease. They also feared an emergency declaration may cause a stigma, “especially in countries where homosexuality is criminalized.”Background: The WHO has made a number of emergency declarations in recent years, including for H1N1, Zika, Polio, Ebola (twice) and COVID-19.
Now, the Biden Administration is considering whether to declare its own public health emergency. Some Department of Health and Human Services officials think it would strengthen the U.S. response to the outbreak, and help get the virus under control.
What is Monkeypox? The virus is in the same family as smallpox, and symptoms are similar to smallpox symptoms, but milder. Monkeypox is rarely fatal – the CDC estimates more than 99% of patients can expect to survive. The last U.S. outbreak was nearly 20 years ago, in 2003. And, aside from their references to wildlife, Monkeypox is not related to Chickenpox.
The numbers: Worldwide, there are more than 16,000 cases and 5 deaths. As of Friday, there were 2,891 confirmed Monkeypox cases in the US. Cases have been confirmed in all but six states: Alaska, Maine, Mississippi, Montana, Vermont, and Wyoming, according to the CDC.
Who is at risk? The Monkeypox outbreak is currently mostly impacting men who have sex with men – but health officials have stressed anyone can catch the virus.Health officials also said they are aware of at least eight cases of Monkeypox in women.On Friday, the CDC confirmed the first two U.S. cases of Monkeypox in kids including a toddler in California and an infant tested in Washington, DC. Officials believe they caught the disease through household transmission, noting anyone can catch the virus through close skin-to-skin contact. In the case of children, the agency said this could include “holding, cuddling, feeding, as well as through shared items such as towels, bedding, cups, and utensils."
What are the symptoms? The most notable symptom is a rash that looks like pimples or blisters on the body. Other common symptoms include fever, headache, muscle & back aches, swollen lymph nodes, chills, and exhaustion.
How does it spread? The virus can spread through close personal contact, like face-to-face or skin-to-skin contact with a carrier. The virus can also spread through the exchange of bodily fluids like saliva, or by touching items and surfaces shared with a carrier, like bedding and towels. WHO warns that eating inadequately cooked meat or other products of infected animals could possibly expose someone to the virus too.
What is the state of vaccines? The supply is limited and health experts are criticizing the U.S. response. An insufficient number of vaccines is causing long lines at vaccination sites in California and NY. In Texas, some people wanting a vaccine are being turned away.The U.S. ordered millions of doses of the vaccine, called Jynneos, but the majority of them won’t arrive for months. And while a smaller batch is expected to arrive in the coming weeks, are waiting on FDA authorization.White House COVID-19 Response Coordinator Ashish Jha is optimistic Monkeypox will be eradicated from America: “The plan here is very straightforward. We – the plan is to eliminate this virus from the United States. I think we can do that. We’ve got the vaccines, and we've got the diagnostic tests.”
🚒🔥 YOSEMITE WILDFIRE EXPLODES
The out-of-control Oak-fire is now one of California’s largest wildfires of the year. The fire-located 75 miles north of Fresno-ignited Friday and remained 0% contained as of Sunday.
Video shows flames tearing through trees and thick, dark clouds of smoke blanketing the sky, and towering to at least 25,000 feet in the air. Governor Gavin Newsom declared a state of emergency in Mariposa County.
By the numbers:
14,000+ acres burned6,000+ forced to evacuate2,600+ without power400+ firefighters battling the blaze
Climate Crisis: The fires are being linked to climate change--fueled by the ongoing drought and record heatwaves. California has seen its largest and most destructive wildfires in history over the past decade (8 of the 10 largest) as the west coast becomes warmer and drier. The state saw more than 2.5 million acres burned in nearly 9,000 fires last year, according to Cal Fire.
Via KCRA: Flames consume a home as the Oak Fire burns in Mariposa County, Calif., on Saturday. (AP Photo/Noah Berger)
Via KCRA: Firefighters work to keep the Oak Fire from reaching a home in the Jerseydale community of Mariposa County, Calif., on Saturday. (AP Photo/Noah Berger)
🗞 THE SPEED READ
Today, Navy officer Lt. Ridge Alkonis will report for his three-year jail sentence in Japan for a driving accident that killed two people and injured a third in 2021. A Japanese judge convicted Alkonis of crashing into a restaurant parking lot in Fujinomiya. The judge did not accept the U.S. Navy's assessment that Alkonis had lost consciousness due to altitude sickness. Instead, the judge believes the Navy officer had fallen asleep at the wheel. Alkonis' family is now hoping for a political intervention - possibly from President Biden - to keep him out of jail.
In an update Sunday, the White House said President Biden’s COVID-19 symptoms and overall condition is improving, after he testing positive on Thursday. Testing showed the 79 year old president most likely contracted the Omicron subvariant BA.5. Biden is taking the drug, Paxlovid. White House doctors say the president’s primary symptom is a sore throat, while his pulse, respiratory rate and blood pressure remain normal.
Russian missiles have hit the southern Ukrainian port of Odessa, just one day after Ukraine and Russia struck a deal to reopen some Ukrainian ports, which supply and export vital grains for the global food supply. “Russia agreed to some deal on grain export, but immediately after this attacked it – showing they want to continue to threaten the world’s food security,” Ukrainian member of parliament Oleksiy Goncharenko said Saturday. Russia claims they were attacking a military target.
Airlines tried shifting blame, but they’re the biggest cause of delays (Washington Post)
Wondering what's behind all the airport delays and cancelations? New federal data reveals airlines themselves are causing most of the chaos themselves. The Bureau of Transportation Statistics found air carriers were directly responsible for about 41% of delays through May. Late-arriving planes - another problem mostly attributable to airlines - accounted for an additional 37% of delays. Problems with the country's airspace, such as congestion, bad weather or staffing at air traffic control facilities, accounted for 17% of delays. However, when it comes to cancellations, airlines can blame weather for being the #1 culprit. Airlines follow at #2.
9-year-old survived Iowa campground shooting that killed family, mayor says (Des Moines Register)
A 9-year-old boy survived a Friday shooting that killed his parents and sister while they were camping in an eastern Iowa state park. The victims were identified Friday evening as Tyler Schmidt, 42, Sarah Schmidt, 42, and Lula Schmidt, 6, of Cedar Falls. Arlo, 9, was the only survivor of the attack. A GoFundMe has been created for Arlo Schmidt, which has raised more than $115,000 as of Sunday, surpassing its $100,000 goal.
The Mega Millions lottery grand prize has increased to about $790 million, after no winner was declared Friday, when the prize stood at $660 million. There has been no winner since April and it now marks the fourth largest prize in American history. The next drawing take place Tuesday night.
☀️ GOOD MOOD MONDAY
Photo by Billie Weiss/Boston Red Sox/Getty Images
Boston Red Sox Legend David Ortiz aka Big Papi was inducted into the Major League Baseball Hall of Fame on Sunday. He entertained and inspired the crowd in Cooperstown, NY, telling them in part, "When you believe in someone, you can change their world." It was a fun speech.
[Top Banner Photo Credit: WANG ZHAO/AFP via Getty Images]
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