Bloomberg - Evening Briefing - ‘Goldilocks’ moment

Bloomberg Weekend Reading

Hopes for smaller interest-rate hikes are growing after a December payrolls report showed the US economy is still creating jobs while wage pressures are easing. The labor market remained strong, with 223,000 nonfarm jobs added and wage growth registering its weakest monthly increase since December 2020. Robert Burgess writes in Bloomberg Opinion that this is a “goldilocks” scenario for the Federal Reserve in its hunt for the elusive soft landing. Even Lawrence Summers, the former Treasury secretary (and paid contributor to Bloomberg Television) said the report shows “a strong economy with slowing inflationary pressure.” (He did add that wages need to drop more.)

Wall Street speculation now turns to whether the central bank will stick to its guns with another rate hike of 50 basis points, or perhaps slow its pace to 25. But while record employment continues, it’s the small and medium-size businesses that are doing much of the hiring. Finance and tech giants continue to shed workers en masse, with Amazon this week announcing 18,000 terminations, the most in its history. 

What you’ll want to read this weekend

The longest fight for US Speaker of the House since 1859 has raised questions like: Who started this mess? Joshua Green points to Donald Trump, who he says taught ambitious Republicans about “fomenting chaos and putting personal vendettas above policy goals.” Another problem may be that California Representative Kevin McCarthy, who lost 14 times before finally becoming Speaker early Saturday morning, refused to reach across the aisle. The GOP has long ducked a fight with its far-right wing—but it’s here now

Vladimir Putin said he’s ordered his troops to halt fighting for 36 hours, a move dismissed by Ukraine as a “propaganda gesture.” The announcement came in a week when Russia acknowledged almost 100 of its forces were killed in one of the war’s deadliest strikes by Ukraine’s military. Kyiv authorities said the death toll was much higher. Talks for lasting peace remain far off: Putin rebuffed a call from Turkish President Recep Tayyip Erdogan for a broader ceasefire, repeating that Ukraine must recognize what Putin calls “new territorial realities.” Meantime, Europe’s sanctions on Russian crude have lowered its value, which is “definitely an important tightening of the screws,” Julian Lee writes in Bloomberg Opinion

Corpses are piling up in China’s funeral homes amid sharply rising deaths following Xi Jinping’s abrupt abandonment of his “Covid zero” policies. It appears that Xi’s reversal came with inadequate planning—for more hospital capacity, vaccines and anti-viral medicines. Now, Beijing is repeating mistakes made elsewhere in three years of combatting a virus that’s killed millions of people. The surge is also a challenge to the rest of the world, and while testing travelers from China won’t prevent transmission, Bloomberg’s editors contend that it’s a wise move.

Workers move a coffin at Dongjiao Funeral Parlor in Beijing on Dec. 19. Photograph: Bloomberg

California’s extreme swings from dry weather to drenching highlight what’s known as “hydroclimate whiplash,” another effect of global warming. In the US, it’s been a winter of extremes: a brief, brutal Arctic freeze across much of America turned to near-spring in some areas, including New York. In Europe’s ski-belt, even artificial snow won’t stick at lower altitudes because it’s so warm. On the hopeful side, meet the “climate quitters:” people pursuing careers to combat the climate crisis. 

This year is likely to break major tourism records, so here’s a list of places to go in 2023. Luxury US homebuyers are looking for value and, with high interest rates and a strong dollar, leaving the beaten path. And for the auto hedonist, there’s an outrageously expensive Mercedes that’s taller than a UPS truck and comes with fuel “efficiency” that’s positively embarrassing.

The Mercedes-AMG G63 4x4² starts at $349,000.  Photographer: Ashton Staniszewski

What you’ll need to know next week

  • US data will show how the Fed’s inflation fight is going.
  • Joe Biden and Justin Trudeau travel to Mexico City.
  • Japanese Prime Minister Fumio Kishida embarks on a global tour.
  • Junior doctors in UK hold ballot on whether to strike.
  • Riyadh hosts a summit to discuss mining for minerals.

The Secret to Ron DeSantis’s Success  

As Florida Governor Ron DeSantis moves toward a possible presidential bid, the hard-right Republican is intensifying his demonization of corporate America. Conjuring a distant, shadowy financial elite and vowing to fight it on behalf of the little guy is textbook populist politics—and another move borrowed from Donald Trump. DeSantis is betting he can generate enough resentment of what he calls “woke capital” to keep his momentum going.  

DeSantis campaigning in November. Photographer: Octavio Jones/Getty Images

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