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Rate Cuts Might Not Cure What Ails the Job Market
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Good morning, CFOs. Tariffs and tight credit weigh on hiring plans; nine technologies that transformed investing; why Microsoft has lower borrowing costs than the U.S.
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Small businesses say that lower interest rates don’t solve all their problems. PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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This stat caught my eye over the weekend in a story by my colleagues Justin Lahart and Ruth Simon: About a fifth of 523 companies said that they were reducing hiring because of tariffs.
That’s according to findings from a quarterly survey of CFOs by Duke University and the Federal Reserve Banks of Atlanta and Richmond. Many said they weren’t filling open positions, while some were laying off workers.
The Federal Reserve resumed its interest-rate cutting campaign earlier this month in an effort to reverse a stall in the job market. The problem: The hiring drought can’t be cured by lower interest rates alone, at least not soon.
Lower rates will help by bolstering demand, as Justin and Ruth reported, especially for interest-sensitive purchases such as houses. But many businesses say their problem, rather than demand, is a panoply of issues from high costs and tariffs to tight credit. The usual levers through which lower rates initially boost the economy—rising stock prices and lower mortgage rates—are also less potent than usual.
Share your thoughts here: How will lower rates affect your spending or your business? Will anything change if interest rates continue to fall?
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Content from our sponsor: Deloitte
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HPE CFO Marie Myers: ‘AI Is a Massive Opportunity for Finance’
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Marie Myers, CFO at Hewlett Packard Enterprise, shares her perspectives on piloting generative AI with agents in operations and investor relations, measuring return on investment, and keys to a successful integration. Read More
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Monday
Earnings: Carnival, Jefferies Financial Group and Vail Resorts
The National Association of Realtors reports pending home sales for August.
Tuesday
Earnings: Lamb Weston Holdings, Nike and Paychex
S&P Cotality releases its Case-Shiller National Home Price Index for July.
The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey.
The Conference Board releases its Consumer Confidence Index for September.
Funding for the U.S. government runs out at 11:59 p.m. unless Congress can hammer out an agreement on a new budget or a stopgap funding bill. A government shutdown would affect the release of some economic data, including the jobs report.
Wednesday
Earnings: Cal-Maine Foods, Conagra Brands and RPM International
ADP releases its National Employment Report for September.
The Institute for Supply Management releases its Manufacturing Purchasing Managers’ Index for September.
Thursday
The Department of Labor is scheduled to report initial jobless claims for the week ending Sept. 27.
Friday
The BLS is scheduled to release the jobs report for September.
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What Else Matters to CFOs
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ILLUSTRATION: DANIEL HERTZBERG
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The Buttonwood Agreement that got the New York Stock Exchange started—a single, handwritten page—couldn’t have been more low-tech.
Since that document was signed on May 17, 1792, by 24 stockbrokers who often conducted business under a buttonwood tree outside 68 Wall St., the financial markets have eagerly embraced new technologies.
The adoption of revolutionary advances such as the telegraph and artificial intelligence have been driven by two entwined desires: the need for more speed to transmit orders and data, and the need for more investors to fund an ever-growing economy.
Here are nine technological advancements that helped turn investing from a private club of two dozen into something of a national pastime. Almost two-thirds of American adults today report owning stocks, and trading can be done on computers, smartphones and under any buttonwood tree at all.
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“If we end up misspending a couple of hundred billion dollars, I think that is going to be very unfortunate obviously, but what I’d say is I actually think the risk is higher on the other side.”
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—Meta's Mark Zuckerberg, on the “ACCESS” podcast earlier this month, regarding AI investments.
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Content From Our Sponsor: DELOITTE
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New Attitudes Toward Corporate Crypto Use
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CFOs are shifting their attitudes and approaches to using cryptocurrency in operations and as investments. Read about what’s happening in the latest CFO insights here
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy. Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew. You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.
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