Business

U.S. Economy had Negative Growth in Second Quarter. Recession?

There was a 0.9% decline in the U.S. economy over the last three months.

The economy has contracted for the second consecutive quarter. A 1.6% decline in GDP was recorded in the first quarter.

The term recession is often used to describe two consecutive quarters of negative growth, but it’s not an official term. U.S. recessions are determined by the National Bureau of Economic Research, a nonprofit, nonpartisan organization. This determination is made by an NBER committee of eight economists, taking into account many factors.

A recession has been ruled out by the White House. As the midterm elections approach, it is no doubt aware of the role the U.S. Economy will play.

A record number of jobs have been created and foreign investment has been attracted to the country, according to President Biden. Biden concluded, “That doesn’t sound like a recession.”.

If so many jobs are being created, can it be a recession?

While two consecutive quarters of negative growth are generally considered a recession, conditions in the U.S. Economy are unique, according to Treasury Secretary Janet Yellen.

In her view, almost 400,000 jobs are created every month, which does not qualify as a recession.

Even so, the economy has weakened regardless of how you slice it.

Businesses retrenched, according to the GDP report. With the Federal Reserve raising interest rates, borrowing has become more expensive. Therefore, less money is available for investment. That could negatively affect job growth, which is the main concern.

As retailers worked through their inventory gluts, they spent less as well. In addition, mortgage rates are rising, which is cooling housing, which has been hot during the pandemic.

It was not all gloom and doom, however. In addition to increasing wages, people were also treating themselves by going out to eat and traveling. There was an increase in income overall.

Due to the Fed’s aggressive hikes in interest rates to combat high inflation, fear of recession has grown considerably.

It has also been a mixed bag when it comes to economic data.

The U.S. Economy was losing jobs in advance of previous downturns, for instance. In spite of this, the U.S. economy continues to add jobs month after month, as Yellen pointed out.

According to Yellen, there is no recession in the U.S. Economy. In a recession, the U.S. Economy is weak across the board. At the moment, we are not experiencing that.”

Recession is not liked by the White House

A recession isn’t automatically triggered by two quarters of negative growth, according to the White House.

The White House is acutely aware of the optics of Americans struggling financially as the midterm elections approach. Americans are already feeling the effects of skyrocketing costs and inflation running at multi-decade highs.

Morning Consult/Politico polls found that 65% of registered voters think we are already in one.

When is a recession likely to occur?

According to the NBER, a recession is defined as “a significant decline in economic activity lasting more than a few months that affects the entire economy.”

Group members take employment into account, and the labor market continues to strengthen. According to the Bureau of Labor Statistics, the unemployment rate held steady at 3.6% in June, which is near its pre-pandemic low. The economy added 372,000 jobs during the month.

According to Bank of America Securities’ chief U.S. economist Michael Gapen, the NBER would not see the data as indicating a recession right now.

The current U.S. Economy may not meet a specific, highly technical definition, but Americans may not care about that.

The U.S. Economy is already slowing in some parts

In spite of the Fed raising interest rates aggressively, the economy seems to be slowing, prices are rising at their fastest pace in decades, and the housing market has begun to cool. An additional 3 3/4 percentage point increase was announced on Thursday by the central bank.

While economists agree that the headline number on Thursday – how much the economy grew or shrank – is likely to attract the most attention, they also emphasize the importance of digging deeper.

Mastercard Economics Institute chief economist Michelle Meyer says it’s the pieces of the GDP puzzle that matter.

As part of the analysis, we will determine whether household spending, which makes up 70% of all economic activity, kept pace with inflation.

At a time like this, when there is so much uncertainty, and when so many Americans are suffering economic difficulties, sentiment and expectations matter, and the key is not to lose too many jobs.

“I think a lot of it comes down to jobs,” says Meyer. “Whether you have a job. Whether you expect to keep your job. And what that might mean for your future path of income.”

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP