Economy at Long Last Is Gaining Traction
Morning Money Memo…
It's official. The Federal Reserve is sounding more confident that the US economy really is gaining strength. The Fed said in a statement that it plans to stop adding to its bond holdings by October. Interest rates are expected to remain low for a "considerable time" after the bond buying ends. Most investors believe the Fed will start raising rates in the second half of next year.
A new jobs survey out today suggests the market will continue to improve. "Employers expect to add more jobs in the back half of the year," says Jennifer Grasz of CareerBuilder. The employment firm asked than 2,100 HR and hiring managers about their plans. "Nearly half of employers (47 percent) plan to hire full-time permanent employees over the next six months," says Grasz. "The results of this year's survey were indicative of a more confident employer population compared to 2013."
Boeing is raising its long-term forecast for new airplane demand by more than 4 percent and it's still the Asia-Pacific region that is driving most of the growth. Three of the largest US airlines are also giving positive signals about their business. Revenue at American, United and Southwest is up compared to the peak summer travel season last year. Since a series of big mergers that started in 2008, airlines have kept a lid on flights, which helps keeps fares high enough to overcome higher fuel prices.
The price of oil has fallen for nine straight days as global supplies continue to flow despite unrest in the Middle East, the world's most important oil-producing region. The prolonged drop for wholesale crude could lead to lower gasoline prices for American motorists in the weeks ahead.
The insurgency in Iraq is far from resolved, but hasn't halted oil exports. The fighting now seems unlikely to spread to Iraq's major oil fields. Tensions between Israel and Hamas have escalated in the past week, but aren't threatening any major oil production. Oil exports from Libya may rise after an agreement between the government and local militias cleared the way for export terminals to open. US production continues to soar.
Samsung Electronics says it's looking into allegations that one of its Chinese suppliers hired children and underage student workers, who worked long hours without overtime pay and social insurance. The allegations from New York-based China Labor Watch conflict with Samsung's recent report that says no child labor was found by an external audit of about 100 Chinese suppliers.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow