WASHINGTON — Kamala Harris is set to unveil plans for a federal ban on food and grocery “price gouging” and assistance of up to $25,000 in down payment support for first-time homeowners – populist proposals the vice president has embraced since becoming the Democratic Party’s presidential nominee.

Harris is scheduled to outline her proposals Friday, in her first speech on the economy focusing on dealing with rising grocery and housing prices – key concerns for voters. She is set to speak in front of supporters at a rally in Raleigh, North Carolina, a battleground state that she and former President Donald Trump, the Republican nominee, are vying to win in the November presidential election.

“In her first 100 days, Vice President Harris will work to enact a plan to bring down Americans’ grocery costs and keep inflation in check,” her campaign said in a memo to reporters Wednesday.

Harris aims to ensure “big corporations can’t unfairly exploit consumers to run up excessive corporate profits,” her campaign said, and will specifically call out the “highly consolidated” meat processing industry. “The lack of competition gives these middlemen the power to drive down earnings for farmers while driving up prices for consumers.”

Speaking to reporters Thursday, Trump called Harris’ proposal “communist price controls.”

“They don’t work, they actually have the exact opposite impact and effect,” he said. But it leads to food shortages, rationing, hunger, dramatically more inflation.”

In the U.S., the Federal Reserve sets interest rates independently, and presidential policies do not have much influence on lowering prices, at least in the short term.

“It is highly unlikely that any single policy introduced by a president could have a significant enough impact to bring inflation down from its current level to the Federal Reserve’s long-term target for the economy, which is 2%,” said Andrew Lautz, associate director for the Bipartisan Policy Center’s Economic Policy Program.

Trump has said he will fight rising prices by boosting oil and gas production. While increasing energy supply could have a downward pressure on prices, and in turn on inflation, it won’t happen quickly, Lautz told VOA.

Lower inflation

While Americans are still feeling the pain, last month U.S. year-over-year inflation dipped under 3% for the first time since March 2021. Unemployment remains low, retail sales figures are upbeat, and most economists no longer warn of recession.

Still the overall health of the economy remains a key concern for voters, and a point of attack on the campaign trail.

“The only thing Kamala Harris can deliver is horrific inflation, massive crime and the death of the American dream,” Trump said.

Both candidates have also promised to slash federal taxes on tips received by workers in the service and hospitality industry.

Critics say that proposal won’t help fast food servers or other low-income workers who don’t get tips and is vulnerable to abuse.

“How can we be sure that it’s deserving working people, as opposed to opening the door to a whole bunch of other people who might treat their bonuses and performance fees like tips and exempt themselves?” said Steven Rosenthal, senior fellow at the Tax Policy Center.

Such proposals are common during presidential campaigns, Rosenthal said. “We often see a race to the bottom, with the candidates trying to outbid themselves for how many tax cuts they can promise.”

If enacted, those promises will be costly at a time when the country needs to seriously think about fiscal responsibility and deficit reduction, said Lautz.

“We are at nearly $28 trillion in federal debt held by the public,” he said. “The Congressional Budget Office estimates that’s going to increase by another $20 trillion or so over the next decade.”

Trump previously held a commanding lead among voters on key economic issues, with various polls showing Americans think they will be better off financially under Trump than President Joe Biden.

However, a survey conducted for the Financial Times and the University of Michigan’s Ross School of Business published this week found that 41% trust Trump to be better at handling the economy, while 42% believe Harris would be better – a figure up seven points from Biden’s numbers in July. 
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Washington — Sun Lijun, a 42-year-old semiconductor engineer, says worries about the quality of air and living, childhood education and the overall economic trajectory in China are some of the reasons he and his wife first started talking about moving to Japan almost a decade ago.

In 2021, they did just that, leaving their life in China behind and relocating with their two children to Okinawa.

Moving to Japan on a business management visa was a first step to “start over and then lead another lifestyle,” he told VOA.

Largest pool of residents

Sun is not alone. He is one of hundreds of thousands of Chinese nationals who have relocated to Japan, where they are now the largest group of immigrants.

According to data from the Japanese Immigration Service Agency, at the end of last year, 821,838 Chinese nationals were living in Japan, a 13% increase from 2022. Trends of Chinese immigration follow a broader increase in the number of foreigners relocating to Japan, which reached a record high of 3,410,992 people in 2023.

With an aging population and widespread labor shortages, Japan has been rolling out immigration reforms in a bid to attract more foreign nationals to the country.

Beginning in 2019, the Japanese government pushed to loosen qualifications that previously inhibited foreigners from establishing residence in the country. Now, those applying for business management visas and residency can bypass the country’s previously strict standards for special skills, education and residence qualifications.

Chinese demand

The changes in Japanese immigration policy have come with consequences. In the case of Chinese nationals, new residents have driven up housing prices and the rate of real estate development across the country.

Daniel Cheng, president of Wan Guo Jin Liang Company, told VOA that real estate developers in Tokyo often use Chinese sales teams, and that many Chinese-owned real estate companies focus on business with Chinese living in Japan or other places overseas.

Tokyo has attracted many middle-class and wealthy Chinese immigrants, and that has pushed up the average price of newly built central city apartments by nearly 40% from 2022, to around $780,000, according to a report issued by the Tokyo-based Real Estate Economic Institute. That’s much higher than the average price in the capital’s greater metropolitan area, which is about $550,000 for an apartment.

Chin JouSen’s real estate agency, Yuzawa, focuses on the Chinese market. He said that when looking at buying property in Japan, China’s wealthy mainly focus on preserving the value of their investment, whereas middle-class families are looking for a variety of choices that allow them to minimize the cost of living.

Cheng said that Japan’s stable political environment, good medical and social insurance, and property ownership rights are a key draw for Chinese. In China, by contrast, individuals may not own land.

Water Lee, a consultant with InterDots, a company that provides immigration services to people from Hong Kong, told VOA that Hong Kongers are also among those relocating to Japan — given the changes in the political environment in the port city in recent years.

Integration into Japan

Despite the impact of the surge of new foreign residents, the rising cost of housing in Japan’s capital, and the geopolitical rivalry between Tokyo and Beijing, Chinese migrants say public sentiment in Japan toward immigrants is positive.

Chin JouSen recently founded his real estate business in Japan. He said that integrating into Japanese society is the most important thing an immigrant can do. And based on his experience, the Japanese are friendly and accepting, Chin said.

However, while most Japanese people are friendly to foreigners, Tokyo-based aromatherapy business owner Michelle Takahashi, who is originally from Taiwan, told VOA that immigrants can sometimes feel subtle differences in how they are treated.

“Japanese thinking on service work can sometimes make foreigners feel like they are being treated specially or differently. This can be a challenge for foreigners who don’t speak Japanese,” she said.

The Japanese government provides new immigrants with specialists to help them adapt to the new language and culture.

Kazuhiko Isozaki founded Beru Corporation in 2017. The company invests in unused, vacant houses, renovates them and rents them out to disadvantaged groups at low prices. He fully welcomed the influx of foreign capital, especially Chinese capital, into Japan.

“The rise in land and housing prices has a positive impact on the economy, and foreign capital helps to drive up land prices,” he said.

“As Japan’s population continues to decline and incomes within the country fall, it makes sense from an economic perspective to more effectively assist overseas capital and people in entering Japan.”

He said he hopes to engage in business helping foreigners buy real estate in Japan in the future, mainly through education and support services, to reduce the barriers for foreigners to buy houses in Japan.

A slower, happier life

As for Sun and his family, they have settled in Okinawa, Japan’s sparsely populated island south of the main island. Sun says he enjoys the climate, slower pace of life and the internationalism he has found there.

For a while, Sun operated a coin laundry before transitioning to property management. His two daughters are learning Japanese in school.

“After immigrating to Japan, my quality of life and overall happiness of my family increased significantly,” Sun said.

VOA’s Katherine Michaelson contributed to this report.
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Washington — South Asia’s youth bulge is a ticking time bomb. A demographic dividend looms, but millions of young people lack the job skills to cash in, choking the region’s economic potential.

Almost half of South Asia’s population of 1.9 billion is under 24, the highest number of any region in the world. With nearly 100,000 young people entering the job market daily, the region boasts the largest youth labor force globally.

For years, experts have sounded the alarm: Many of South Asia’s youth lack the education and skills for a modern labor force. A 2019 UNICEF study warned that if nothing changes, more than half risked not finding decent jobs in 2030.

Now, International Youth Day has put the spotlight on the region’s skills-gap crisis. While some South Asian countries have made progress in recent years, UNICEF’s latest figures paint a sobering picture: Ninety-three million children and adolescents in South Asia are out of school; almost 6 in 10 can’t read by age 10; and nearly a third are not in any form of education, employment or training, known as NEET.

“We know that the region has the highest number of children and young people, but sadly at the same time, despite the opportunity that that might bring, we know that for many young people, learning and skilling is not good enough,” Mads Sorensen, UNICEF’s chief adolescent adviser for South Asia, said in an interview with VOA. “This clearly holds them back from reaching their full potential.”

The problem, Sorensen said, comes down to the quality of education: Many teachers cling to old methods, schools in many regions lack basic tools such as computers, and students are not taught the digital skills needed to thrive in the modern workplace.

“So, young people are not really acquiring those skills that we know are very much sought after by the labor market, especially the private sector,” Sorensen said.

The skill deficit extends beyond K-12 education. Higher education enrollment in South Asia has tripled in the past two decades, reaching an average of 27% in 2022, according to the World Bank. Yet the quality of college education remains uneven, with many graduates finding that their hard-earned degrees ill-prepare them for today’s job market.

Big investment but scant returns

Take Ariful Islam, a recent graduate with a business administration degree, who now helps his father in his sweets shop in the Bangladeshi capital, Dhaka. After graduating last year, he had multiple job interviews. But none yielded an offer, forcing him to settle for a position that barely covered his expenses.

Having invested nearly $13,000 on Islam’s education, his father, Akram Khan, said he had to quit his job to start a business. Islam wasn’t earning enough, so Khan needed to boost the family’s income.

“I spent so much money to educate my son, but now he is not getting a job according to his qualifications,” Khan said in an interview with VOA. “As a father, [I] will feel bad.”

Others such as Zahirul Haque, a 2022 graduate in public administration, have been locked out of coveted government jobs.

A controversial quota system favoring Liberation War veterans and their offspring, at the heart of Bangladesh’s recent turmoil, has thwarted his aspirations for public service.

After two years of fruitless government-administered exams, he reluctantly accepted a low-paying job with a local nongovernmental organization.

“It was a little disappointing,” he told VOA.

Bangladesh’s strained job market offers few prospects for young graduates such as Haque. But he said he hasn’t given up hope for a better job.

Good news, sobering news

Bangladesh, once among Asia’s poorest countries, has surged economically in recent decades and is now on track to become a middle-income country by 2026.

Collectively, South Asia is poised to be the fastest-growing emerging market this year, according to the World Bank. In a new report released on Monday, the International Labour Organization, or ILO, said South Asia’s youth unemployment rate fell to a 15-year low of 15.1% last year.

Though signaling an easing job market for young people, the unemployment rate was the highest in the Asia Pacific region, ILO said. What’s more, “too many” young women are excluded from the labor market in South Asia, with the number of women not working or learning at more than 42%, the highest in the region, the ILO said.

Sorensen said that while countries such as Bhutan, the Maldives and Sri Lanka have narrowed the skills gap in recent years, the region’s most populous nations — India, Bangladesh and Pakistan — are lagging behind.

The plight of young women is even more grim. One in four girls in South Asia are married before age 18, their education and careers squandered. Bangladesh’s underage marriage numbers have worsened in recent years, Pakistan’s remains “dire,” Sorensen said.

Pakistan lags most of the region in higher education, with 13% enrollment as of 2022. While the country boasts quality universities, many students complain about outdated curriculums.

The curriculum is “not incorporating the emerging trends of the 21st century,” said Noor Ul Huda, an English major at a public university in Islamabad.

Huda said her major is considered “less practical” than academic fields such as engineering and business, leaving her job prospects bleak.

“The job market is overwhelmingly competitive, and I think I’d have a lot of difficulty finding a job,” she said.

Not ready for jobs

Many parents pouring money into their children’s education confront the same reality: Schools fail to equip students for the job market.

Humna Saleem, a preschool teacher in Rawalpindi, worries about her son, a soon-to-be computer science graduate from a private university. Despite a hefty tuition, he had to learn coding on his own, Saleem said.

“What I observed as an adult is that he is taught a lot of theoretical knowledge, but there are practical skills that are not taught to the students,” she told VOA.

Pakistan’s classrooms, she said, remain stuck in the past, while the world has changed. Students need digital skills and “soft skills,” such as critical thinking and interpersonal communication, not just degrees, she said.

“It doesn’t matter if you are a doctor, or you’re an accountant, or you are an engineer. Whatever profession you choose for yourself, you need to have those skills,” Saleem said.

In recent years, governments in the region have stepped up efforts to close the skills gap.

In India, the Ministry of Skill Development and Entrepreneurship has partnered with UNICEF to provide youth with 21st-century skills, apprenticeships and entrepreneurial opportunities.

In Pakistan, the prime minister’s Youth Skill Development Program, launched in 2013, aims to equip youth with market-driven skills in IT, entrepreneurship, agriculture, tourism and vocational fields.

“We have to equip our youth with the skills in line with modern requirements so that they can contribute to the country’s development,” Pakistan’s education minister, Khalid Maqbool Siddiqui, said in July, according to Associated Press of Pakistan.

In Bangladesh, the National Skills Development Council, led by the prime minister, has introduced a new policy to enhance workforce skills for the modern economy.

Colleges and universities in South Asia have tried to tackle the skills gap crisis by emphasizing critical thinking, creativity, innovation and entrepreneurship. Some have also ramped up digital skills and vocational training to better prepare their graduates for the job market.

Sorensen lauded the regional efforts but said more needs to be done to build a vibrant, modern workforce in South Asia.

“We keep saying that young people are leaders of today, which they are, but they’re also more so leaders of tomorrow,” Sorensen said.

VOA’s Afghan, Bangla and Urdu services contributed to this report.
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Washington — The great inflation spike of the past three years is nearly spent — and economists credit American consumers for helping slay it.

Some of America’s largest companies, from Amazon to Disney to Yum Brands, say their customers are increasingly seeking cheaper alternative products and services, searching for bargains or just avoiding items they deem too expensive. Consumers aren’t cutting back enough to cause an economic downturn. Rather, economists say, they appear to be returning to pre-pandemic norms, when most companies felt they couldn’t raise prices very much without losing business.

“While inflation is down, prices are still high, and I think consumers have gotten to the point where they’re just not accepting it,” Tom Barkin, president of the Federal Reserve Bank of Richmond, said last week at a conference of business economists. “And that’s what you want: The solution to high prices is high prices.”

 

A more price-sensitive consumer helps explain why inflation has appeared to be steadily falling toward the Federal Reserve’s 2% target, ending a period of painfully high prices that strained many people’s budgets and darkened their outlooks on the economy. It also assumed a central place in the presidential election, with inflation leading many Americans to turn sour on the Biden-Harris administration’s handling of the economy.

The reluctance of consumers to keep paying more has forced companies to slow their price increases — or even to cut them. The result is a cooling of inflation pressures.

Other factors have also helped tame inflation, including the healing of supply chains, which has boosted the availability of cars, trucks, meats and furniture, among other items, and the high interest rates engineered by the Fed, which slowed sales of homes, cars and appliances and other interest rate-sensitive purchases.

Still, a key question now is whether shoppers will pull back so much as to put the economy at risk. Consumer spending makes up more than two-thirds of economic activity. With evidence emerging that the job market is cooling, a drop in spending could potentially derail the economy. Such fears caused stock prices to plummet a week ago, though markets have since rebounded.

This week, the government will provide updates on both inflation and the health of the American consumer. On Wednesday, it will release the consumer price index for July. It’s expected to show that prices — excluding volatile food and energy costs — rose just 3.2% from a year earlier. That would be down from 3.3% in June and would be the lowest such year-over-year inflation figure since April 2021.

And on Thursday, the government will report last month’s retail sales, which are expected to have climbed a decent 0.3% from June. Such a gain would suggest that while Americans have become vigilant about their money, they are still willing to spend.

Many businesses have noticed.

“We’re seeing lower average selling prices … right now because customers continue to trade down on price when they can,” said Andrew Jassy, CEO of Amazon.

David Gibbs, CEO of Yum Brands, which owns Taco Bell, KFC and Pizza Hut, told investors that a more cost-conscious consumer has slowed its sales, which slipped 1% in the April-June quarter at stores open for at least a year.

“Ensuring we provide consumers affordable options,” Gibbs said, “has been an area of greater focus for us since last year.”

Other companies are cutting prices outright. Dormify, an online retailer that sells dorm supplies, is offering comforters starting at $69, down from $99 a year ago.

According to the Fed’s “Beige Book,” an anecdotal collection of business reports from around the country that is released eight times a year, companies in nearly all 12 Fed districts have described similar experiences.

“Almost every district mentioned retailers discounting items or price-sensitive consumers only purchasing essentials, trading down in quality, buying fewer items or shopping around for the best deals,” the Beige Book said last month.

Most economists say consumers are still spending enough to sustain the economy consistently. Barkin said most of the businesses in his district — which covers Virginia, West Virginia, Maryland and North and South Carolina — report that demand remains solid, at least at the right price.

“The way I’d put it is, consumers are still spending, but they’re choosing,” Barkin said.

In a speech a couple of weeks ago, Jared Bernstein, who leads the Biden administration’s Council of Economic Advisers, mentioned consumer caution as a reason why inflation is nearing the end of a “round trip” back to the Fed’s 2% target level.

Emerging from the pandemic, Bernstein noted, consumers were flush with cash after receiving several rounds of stimulus checks and having slashed their spending on in-person services. Their improved finances “gave certain firms the ability to flex a pricing power that was much less prevalent pre-pandemic.” After COVID, consumers were “less responsive to price increases,” Bernstein said.

As a result, “the old adage that the cure for high prices is high prices [was] temporarily disengaged,” Bernstein said.

So some companies raised prices even more than was needed to cover their higher input costs, thereby boosting their profits. Limited competition in some industries, Bernstein added, made it easier for companies to charge more.

Barkin noted that before the pandemic, inflation remained low as online shopping, which makes price comparisons easy, became increasingly prevalent. Major retailers also held down costs, and increased U.S. oil production brought down gas prices.

“A price increase was so rare,” Barkin said, “that if someone came to you with a 5% or 10% price increase, you almost just threw them out, like, ‘How could you possibly do it?’ ”

That changed in 2021.

“There are labor shortages, Barkin said. “Supply chain shortages. And the price increases are coming to you from everywhere. Your gardener is raising your prices, and you don’t have the capacity to do anything other than accept them.”

The economist Isabella Weber at the University of Massachusetts, Amherst, dubbed this phenomenon “sellers’ inflation” in 2023. In an influential paper, she wrote that “publicly reported supply chain bottlenecks” can “create legitimacy for price hikes” and “create acceptance on the part of consumers to pay higher prices.”

Consumers are no longer so accepting, Barkin said.

“People have a little bit more time to stop and say, ‘How do I feel about paying $9.89 for a 12-pack of Diet Coke when I used to pay $5.99?’ They don’t like it that much, and so people are making choices.”

Barkin said he expects this trend to continue to slow price increases and cool inflation.

“I’m actually pretty optimistic that over the next few months, we’re going to see good readings on the inflation side,” he said. “All the elements of inflation seem to be settling down.”
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Geneva — Global youth unemployment rates fell to 13% in 2023, a 15-year low. But a new study by the International Labor Organization warns the post-COVID economic recovery is uneven, with some regions seeing an increase in the number of out-of-work young people. 

The ILO has issued its Global Employment Trends for Youth 2024 report to coincide with International Youth Day on August 12, to raise awareness of the needs, hopes, and aspirations of young people.    

The current report reflects these issues and analyzes current and future prospects. 

The report predicts that the four-year-long improved global labor market for young people will continue its upward trend for two more years, with unemployment rates expected to fall further to 12.8% this year and next.   

This bright outlook, however, is not universal. The report notes that several regions are falling behind and not getting the benefits of the economic recovery. 

“In three regions, mainly in the Arab States, Southeast Asia and the Pacific, youth unemployment rates were higher in 2023 than in 2019 in pre-COVID-19 days,” Gilbert Houngbo, ILO director-general, told journalists in Geneva last week at a briefing ahead of the report’s publication. 

“At the same time, the recovery has not been the same for young men and young women,” he said. “Some of you may recall, before the pandemic, that young men globally experienced higher unemployment rates than young women. But by 2023, unemployment rates for young women and young men almost converged — 20.9% for young women versus 13.1% for young men. 

“This highlights the disproportionate impact of the pandemic on young women’s employment opportunities and ensures that some young women will have been left behind in the recovery process,” he said. 

Flagging another issue of concern, authors of the report point out that only six percent of the world’s youth population were unemployed in 2023, but a much larger share — 20.4% — was not in employment (individuals without a job and not seeking one), education or training. This is referred to as NEET in ILO parlance. 

The report finds that one in five young people between the ages of 15 and 24 was NEET in 2023 and two in three were female.    

The report underscores the persistent challenges facing young people in gaining decent jobs in developing countries. It highlights the glaring equality gap between rich and poor countries where “the inequalities of opportunity have gotten worse.” 

“Today, only one in four young workers in the low-income countries has a regular secure job compared to three-quarters of young workers in high income countries,” ILO chief Houngbo said. “However, two-thirds of young adults in low- and middle-income countries face education jobless matches because their qualifications do not necessarily align well with their qualifications and requirements.” 

ILO data reveals that youth unemployment rates have reached “historic lows” in North America, in areas of western Europe, and have come down substantially in Latin America in recent years. The data, however, show that youth unemployment rates remain critically high in the Arab states and North Africa. 

“In both subregions, more than one in three economically active youth were unemployed in 2023. Fewer than one in 10 women and fewer than one in three young men in the two subregions are working,” authors of the report say. 

The situation in sub-Saharan Africa is quite different where, according to the report, youth unemployment rates stand at 8.9%, “which are among the lowest in the world.” 

Sara Elder, head of ILO’s employment analyses and economic policies unit, explains, “The issue here is that young people in certain contexts do not have the luxury of being unemployed. They have to take up a job. They have to earn some income. 

“Often it is poverty driven and this is very much what we see in young people in sub-Saharan Africa,” she said, adding that the region “has a very distinct problem of decent work deficits.” 

“It is a region where three in four young people do not have access to what we deem to be a more secure form of employment and also a region where one in three persons is working in a low paid job,” she said. 

Her colleague, Mia Seppo, ILO assistant director-general for jobs and social protection, points out that most young people, around 60%, eke out a living in the agricultural sector, “and a lot of that is in employment that is informal and insecure. And, that is not necessarily reflective of young people’s aspirations.” 

“So, there actually lies the potential in terms of agri-food supply chains and in developing the agricultural sector in terms of new jobs and trying to make agriculture something that is attractive and provides more decent jobs for young people,” she said. 

Authors of the report say demographic trends, notably, the so-called African “youthquake,” means that creating enough decent jobs, “will be critical for social justice and the global economy.” 

The report calls for increased and more effective investment in boosting job creation, especially for young women. It says governments must strengthen labor market policies that target employment for disadvantaged youth, make sure that young people receive equal treatment and social protection at work, and “tackle global inequalities through improved international cooperation.” 
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New York — A week of wild market swings has investors looking ahead to inflation data, corporate earnings and presidential polls for signals that could soothe a recent outbreak of turbulence in U.S. stocks. 

Following months of placid trading, U.S. stock volatility has surged this month as a run of alarming data coincided with the unwinding of a massive, yen-fueled carry trade to deal equities their worst selloff of the year. The S&P 500 .SPX is still down around 6% from a record high set last month, even after making up ground in a series of rallies after Monday’s crushing selloff.  

At issue for many investors is the trajectory of the U.S. economy. After months of betting on an economic soft landing, investors rushed to price in the risk of a more severe downturn, following weaker-than-expected manufacturing and employment data last week.  

“Everybody is now worried about the economy,” said Bob Kalman, a portfolio manager at Miramar Capital. “We are moving away from the greed portion of the program and now the market is facing the fear of significant geopolitical risks, a hotly contested election and volatility that is not going away.”  

Though stocks have rallied in recent days, traders believe it will be a while before calm returns to markets. Indeed, the historical behavior of the Cboe Volatility Index .VIX – which saw its biggest one-day jump ever on Monday – shows that surges of volatility usually take months to dissipate.  

Known as Wall Street’s fear gauge, the index measures demand for options protection from market swings. When it closes above 35 – an elevated level that it topped on Monday – the index has taken 170 sessions on average to return to 17.6, its long-term median and a level associated with far less extreme investor anxiety, a Reuters analysis showed.  

One potential flashpoint will be when the U.S. reports consumer price data on Wednesday. Signs that inflation is dropping too steeply could bolster fears that the Federal Reserve has sent the economy into a tailspin by leaving interest rates elevated for too long, contributing to market turbulence.  

For now, futures markets are pricing in a 55% chance the central bank will bring down benchmark interest rates by 50 basis points in September, at its next policy meeting, compared with a roughly 5% chance seen a month ago.  

“Slower payroll growth reinforces that U.S. economic risks are becoming more two-sided as inflation cools and activity slows,” said Oscar Munoz, chief U.S. macro strategist at TD Securities, in a recent note.  

Corporate earnings, meanwhile, have been neither strong enough nor weak enough to give the market direction, said Charles Lemonides, head of hedge fund ValueWorks LLC.  

Overall, companies in the S&P 500 have reported second-quarter results that are 4.1% above expectations, in line with the long-term average of 4.2% above expectations, according to LSEG data.  

Walmart WMT.N and Home Depot HD.N are among companies reporting earnings next week, with their results seen as offering a snapshot on how U.S. consumers are holding up after months of elevated interest rates.  

The end of the month brings earnings from chip giant Nvidia NVDA.O, whose shares are up around 110% this year even after a recent selloff. The Fed’s annual Jackson Hole gathering, set for Aug. 22-24, will give policymakers another chance to fine tune their monetary policy message before their September meeting.  

Lemonides believes the recent volatility is a healthy correction during an otherwise strong bull market, and he initiated a position in Amazon.com AMZN.O to take advantage of its weakness.  

The U.S. presidential race is also likely to ramp up uncertainty. 

  

Democrat Kamala Harris leads Republican Donald Trump 42% to 37% in the race for the Nov. 5 presidential election, according to an Ipsos poll published on Thursday. Harris, the vice president, entered the race on July 21 when President Joe Biden folded his campaign following a disastrous debate performance on June 27 against Trump.  

With nearly three months until the Nov. 5 vote, investors are braced for plenty of additional twists and turns in an election year that has already been one of the most dramatic in recent memory.  

“While early events suggested a clearer picture of US Presidential and Congressional outcomes, more recent events have again thrown the outcome into doubt,” analysts at JPMorgan wrote.  

Chris Marangi, co-chief investment officer of value at Gabelli Funds, believes the election will add to market volatility. At the same time, expected rate cuts in September could boost a rotation into areas of the market that have lagged in a year that has been dominated by Big Tech, he said.  

“We expect increased volatility into the election but the underlying rotation to continue as lower rates offset economic weakness,” he said. 
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