The geopolitical conflicts and the Covid-19 pandemic severely affected economic growth worldwide. Federal Reserve officials and economists are trying to resolve the workforce shortage in the United States. The Fed officials said that labor shortage and imbalance of worker supply lead to inflation.
To maintain the economy, the tech giants are reducing their existing workforce. The first month of the new year started with huge layoffs of nearly 3000 workers from different sectors.
At a December conference, the Federal Reserve chair Jerome Powell said that the COVID-19 pandemic hugely affected the demand for the workforce in the economy. On Jan 24, NYSIF released a report on the long-term impacts of COVID-19 where it mentioned that nearly 18% of Covid patients were still at home.
Powell reasoned about the Fed at his February conference that “I personally understand well that COVID is still out there but that it’s no longer playing an important role in our economy.”
According to CoinMarketCap, the crypto market closely followed the US equities market in 2022. Investor confidence in cryptocurrency is at an all-time low, and the global economic outlook is not showing signs of moving beyond the Covid-recovery mode.
Torsten Slok, chief economist and partner at Apollo Global Management, said, “Ultimately long COVID-19 is a key reason why the Fed will have to keep the Fed funds rate elevated for an extended period.”
US Federal Reserve raised the interest rate by 25 bps
High-interest rates had a huge impact on stocks, investors and cryptocurrencies. Due to high-interest rates, cash flow in the economy has slowed down. The United States central bank has raised interest rates by 25 basis points or 0.25% in a bid to tame record-high inflation. Analysts predict future interest rates will rise by 50 basis points or 0.50 percent.
The Fed said that “Inflation has eased somewhat but remains elevated.” In Wednesday’s conference, Powell said that he expected an economic growth rate this year.
“My base case is that there will be positive growth this year,” Powell said.
Meta share surge
On Wednesday, Meta shared that its fourth-quarter earnings fell 4%, marking straight declining sales from the third quarter. But it didn’t affect the company on Thursday Meta’s stock increased 23%.
The company expenses are increasing from year to year. In 2023 Meta expected to maintain its expenses between $89 billion to $95 billion, lower than the previous year, from $94 billion to $100 billion.
Mark Zuckerberg, Meta CEO, said, “Our community continues to grow and I am pleased with the strong engagement across our apps.” “Our management theme for 2023 is the ‘Year of Efficiency’ and we are focused on becoming a stronger and more nimble organization.”
Amazon crossed its fourth-quarter revenue
On Thursday, Amazon revealed its fourth-quarter sales report, 20% sales growth. Its revenue increased for the year by 9%. In mid-2022, the company’s stock price lost almost half of its value. The report also included about $2.7 billion of charges, of which $640 million are from layoffs.
Andy Jassy, Amazon CEO, said, “In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon.