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Technology

Nintendo Switch Joy-Con Drift Caused by Fundamental Design Flaws, Says Consumer Group

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The Nintendo Switch’s Joy-Con drift issue is caused by a fundamental design flaw according to a UK consumer group.

As reported by Eurogamer, a report from Which claims that, even after just a few months of use, the Joy-Con’s plastic circuit boards show significant wear on the joystick slider contact points. This causes Joy-Con drift, an issue that Nintendo hasn’t been able to fully address in the console’s five years on the market.

The report also criticises Nintendo’s returns and refunds policy in relation to Joy-Con drift issues, saying it should provide a refund or compensation plan for anyone who can prove they’ve bought a replacement Joy-Con since the Switch’s launch in 2017.

Nintendo disagreed that the issue is so prevalent, however, saying in response to the survey that only a small number of controllers are affected and that it’s improved the design several times since launch.

“The percentage of Joy-Con controllers that have been reported as experiencing issues with the analogue stick in the past is small, and we have been making continuous improvements to the Joy-Con analogue stick since its launch in 2017,” it said.

“We expect all our hardware to perform as designed, and, if anything falls short of this goal, we always encourage consumers to contact Nintendo customer support, who will be happy to openly and leniently resolve any consumer issues related to the Joy-Con controllers’ analogue sticks, including in cases where the warranty may no longer apply.”

Top 25 Nintendo Switch Games

Nintendo launched a Switch repair subscription service in Japan earlier this year but hasn’t yet announced a version for the U.S. or Europe.

It did open a Joy-Con drift specific repair service back in 2019 but it recently materialised that the repair centres themselves were so overwhelmed that mistakes were made when the controllers were meant to be fixed. The issue is so persistent that Nintendo has faced several lawsuits as a result of its Joy-Con malfunctions.

Ryan Dinsdale is an IGN freelancer and acting UK news editor. He’ll talk about The Witcher all day.

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Technology

Nintendo Switch Joy-Con drift due to “design flaw”, UK consumer group reports

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A major new study from UK consumer group Which? has found evidence that the Nintendo Switch’s infamous Joy-Con drift is likely caused by a mechanical fault, pointing to fundamental design flaws.

The research found that the Joy-Con’s plastic circuit boards showed noticeable wear on the joystick slider contact points, despite only being used for months. It is this wear that ultimately results in drifting.

In addition, dust and other contaminants were found in the Switch’s internal components, despite attempts by Nintendo at dustproofing said areas.

The Eurogamer Newscast News Quiz of the Year 2022!

Which? also criticised Nintendo’s handling of the situation and its response to affected consumers.

The organisation has called upon Nintendo to provide a compensation or refund plan for any UK consumers who can prove they purchased a replacement Joy-Con due to drift since 2017, and said that this scheme should be widely promoted.

It has also called for Nintendo to offer a “no-quibble” repair or replacement of all Joy-Cons that have developed drift since 2017, completely free of charge.

In a response to the study, Nintendo issued the following statement: “The percentage of Joy-Con controllers that have been reported as experiencing issues with the analogue stick in the past is small, and we have been making continuous improvements to the Joy-Con analogue stick since its launch in 2017.”

“We expect all our hardware to perform as designed, and, if anything falls short of this goal, we always encourage consumers to contact Nintendo customer support, who will be happy to openly and leniently resolve any consumer issues related to the Joy-Con controllers’ analogue sticks, including in cases where the warranty may no longer apply.”

If your Joy-Con has developed drift, it’s worth remembering that your first point of contact should be Nintendo Support, which will likely repair your controllers at no cost to you including shipping. From my own experience, you don’t even need to provide proof of purchase, but it would certainly help your cause if you’re within warranty.

Which? also produced a report earlier this year which found that two in five Joy-Con controllers from the original Nintendo Switch release are experiencing drift.

Of course, issues surrounding Joy-Con drift have persisted for several years now. In 2019, a class action lawsuit against Nintendo was filed in the US over the problem, while last year the European Commission stated that it was considering opening an investigation.

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Business

US consumer price inflation eased more than expected in November

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US consumer price inflation eased more than expected in November to its lowest level in almost a year, bolstering the Federal Reserve’s plans to slow the pace of interest rate rises this week.

The rate of increase in the consumer price index fell to 7.1 per cent last month, lower than the 7.3 per cent forecast by economists and down from 7.7 per cent in October. It is the lowest level since December 2021.

Overall CPI rose 0.1 per cent from the previous month, less than the 0.4 per cent increase in October.

US stocks initially soared after the release, as investors bet that the central bank might not have to squeeze the economy as aggressively as feared to bring inflation under control. Those gains ebbed throughout the trading day, with the S&P 500 up 0.6 per cent.

Government bonds also rallied, sending the yield on two-year US Treasury bonds, which is sensitive to changes in interest rate expectations, down by 0.22 percentage points to 4.18 per cent at one point. It later traded around 2.24 per cent.

The inflation report, released by the Bureau of Labor Statistics on Tuesday, came at the start of the Federal Open Market Committee’s final two-day policy meeting of the year.

On Wednesday, the central bank is set to raise its benchmark policy rate by half a percentage point, breaking successive 0.75 point interest rate increases.

If that increase is implemented, the federal funds rate will move up to a new target range of 4.25-4.5 per cent, which most officials believe is still not high enough to bring inflation back down to the Fed’s longstanding 2 per cent target.

“One [inflation] number won’t be enough for the Fed, but it certainly is going to put the Fed in a better mood than they have been over the past number of weeks,” said Padhraic Garvey, regional head of research for the Americas at ING. But he warned that inflation could “quite easily” surprise next month.

“The sensible thing from [the Fed’s] perspective is to deliver the [half-percentage point move], do it in a hawkish manner and don’t have a victory lap just yet.

“If they go all dovish tomorrow, the market will read that and will loosen up financial conditions further and it just takes away the value of the hike in the first place.”

Energy and goods prices have begun to slow this year, having previously helped to push up the annual increase in the CPI index to 9.1 per cent in June. But services-related costs have risen at an alarming pace, bolstered in part by an acceleration in wage growth as a result of the surprisingly resilient labour market.

In November, housing-related costs were the biggest driver of the monthly increase in consumer prices, rising 0.6 per cent compared to October and 7.1 per cent on an annual basis. Home prices have fallen materially this year as mortgage expenses have jumped, but those declines take time to show up in the data, suggesting further downward pressure on inflation next year.

Transportation costs and those related to medical services posted monthly declines, despite having increased 14 per cent and nearly 5 per cent respectively compared to November last year. Food prices remain elevated, however, registering a 0.5 per cent monthly increase.

Fed officials have acknowledged that getting inflation under control will require a sustained period of low growth and higher unemployment, but have stopped short of forecasting an outright recession. Most economists say an economic contraction will be necessary and anticipate a mild one next year.

President Joe Biden cheered the slower increase in the CPI in a statement from the White House on Tuesday.

“In a world where inflation is rising at double digits in many major economies around the world, inflation is coming down in America,” he said. “Make no mistake: prices are still too high. We have a lot more work to do, but things are getting better.”

Biden said he hoped prices would be “much closer” to “normal” by the end of next year. “We could see setbacks along the way . . . We shouldn’t take anything for granted. But what is clear is my economic plan is working and we’re just getting started. My goal is simple: get price increases under control without choking off economic growth.”

Additional reporting by Harriet Clarfelt in New York and James Politi in Washington

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Business

China’s producer prices fall, consumer inflation slows on soft demand

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  • PPI falls for a second month
  • Nov PPI -1.3% y/y vs -1.3% y/y in October
  • Nov CPI +1.6% y/y vs +2.1% y/y in October

BEIJING, Dec 9 (Reuters) – China’s factory-gate prices showed an annual fall for a second month in November while consumer inflation slowed, indicating weak activity and soft demand in an economy that has been held back by tough pandemic controls.

Analysts said they expected the government to keep interest rates low and take measures to boost confidence.

The producer price index (PPI) was down 1.3% on a year earlier, unchanged from an annual contraction seen in October, according to National Bureau of Statistics (NBS) data issued on Friday. That was slower than a 1.4% fall tipped in a Reuters poll.

The November consumer price index (CPI) rose at its slowest pace in eight months, climbing 1.6% from a year earlier, which was less than the 2.1% annual rise seen in October but in line with a Reuters poll.

“These data suggest the economic momentum (continues) to weaken,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

A high-level political meeting on Tuesday, a gathering of the ruling Communist Party’s Politburo, emphasised that in 2023 the government would focus on stabilising growth, promoting domestic demand and opening up to the outside world.

Zhang said that, although the government had eased pandemic controls over the past week, it would take further measures to spur the economy.

“The Politburo meeting … identified weak confidence as a major problem for the economy,” he said. “I expect the government will do more to boost market and household confidence. The fast pace of reopening indicates the government’s sense of urgency.”

Growth in the world’s second-largest economy has sagged this year, largely impacted by the uncompromising COVID-19 curbs as global demand has also wavered.

The producer price deflation and milder consumer price inflation of November accompanied record COVID-19 infections and related curbs that disrupted production and curbed mobility.

Although markets have cheered the shift in pandemic policy, economists say it will likely depress growth over the next few months as infections surge, bringing an economic rebound only later in 2023.

Reuters Graphics

Producer deflation was led by the steel industry, in which prices were down 18.7%.

Part of the explanation for slower growth in consumer prices was in food markets.

Food prices were up 3.7% on a year earlier, whereas the rise seen in October was 7.0%. Within the food category, pork was a factor behind moderating inflation: it was 34.4% pricier in November than in the same month last year, but in October the annual rise had been 51.8%.

Underlying core annual inflation, which excludes volatile food and energy prices, was just 0.6% in November, unchanged from October

“The overall inflation pressure remains benign in China, and we expect the CPI inflation will be around 1.6% for 2023, down from 2.0% in 2022. Given this, the monetary policy will remain accommodative over the coming year,” said Hao Zhou, chief economist at Guotai Junan Group.

China’s central bank has kept its benchmark one-year loan prime rate at 3.65% since August. It expects consumer inflation to remain moderate next year.

Reporting by Liangping Gao and Liz Lee; Editing by Edmund Klamann and Bradley Perrett

Our Standards: The Thomson Reuters Trust Principles.

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Business

South Korea GDP, Caixin Manufacturing PMI, Japan Consumer Confidence

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Japanese yen strengthens after Powell commentary on smaller hikes

Temasek’s $245 million FTX loss ’caused reputational damage’ to Singapore, says deputy prime minister

Singapore’s Deputy Prime Minister Lawrence Wong said the state sovereign wealth fund’s investment loss of $275 million in collapsed crypto exchange FTX is “disappointing and has caused reputational damage” to the city-state.

But the investment loss does not mean the governance system is not working, Wong said, adding that an internal review is being conducted.

“Rather, it is the nature of investment and risk-taking,” he said.

The FTX loss will not impact the net investment returns of Singapore’s reserves, which are “tied to the overall expected long term returns of our investment entities and not to individual investments,” he said.

Going forward, Singapore plans to require crypto service providers to implement basic investor protection measures, but “no amount of regulation can remove this risk,” he warned.

– Sheila Chiang

China’s Caixin manufacturing PMI marks fourth straight month of contraction

China’s Caixin/Markit Manufacturing Purchasing Managers’ Index for November came in at 49.4, higher than expectations of 48.9 in a Reuters survey of economists.

The reading marks a fourth consecutive month of contraction, after a reading of 49.2 from October and dipping to 48.1 in September — below the 50-point mark which separates growth from contraction.

Separately, the official PMI print from China’s National Bureau of Statistics reported Wednesday came in at 48, showing a second consecutive month of contraction in factory activity.

– Jihye Lee

Oil prices little changed as White House weighs additional oil reserves

The White House is considering building additional oil reserves against the backdrop of the upcoming winter and uncertainty surrounding the market, sources familiar with the matter told CNBC.

The Biden administration is weighing whether to call on Congress to raise the storage limit, potentially doubling it, to build additional reserves the administration could release if supply tightens or prices rise again, the people said.

The U.S. currently holds about 1 million barrels of heating oil in New York and Connecticut.

The White House is bracing for a potential price spike, as Europe’s oil embargo and G-7’s price cap on Russian oil looms ahead, potentially disrupting supply.

Oil prices are little changed in early Asia hours. The West Texas Intermediate futures dipped fractionally to stand at $80.53 per barrel, while the Brent crude futures shed 0.06% to stand at $86.92 per barrel.

— Kayla Tausche, Lee Ying Shan

CNBC Pro: Forget Amazon. Here’s what top tech investor Paul Meeks is buying

Investor confidence in the tech sector has been shaken this year amid a flight to safety, but top tech investor Paul Meeks said he is now “more bullish” on the sector than in recent months, though he remains selective within the sector.

He tells CNBC the stocks he favors.

Pro subscribers can read more here.

— Zavier Ong

South Korea’s revised GDP confirms growth in the third quarter

South Korea’s revised gross domestic product for the third quarter confirmed growth of 3.1% compared to the same period a year ago – higher than a 2.9% expansion seen in the second quarter.

The economy saw slower quarterly growth of 0.3% in the third quarter, following a growth of 0.7% in the previous period.

Separately, South Korea reported a trade deficit of $7.01 billion for November, exceeding expectations of $4.42 billion — marking the third consecutive month of rising trade deficit driven by sluggish exports.

Exports shrank by 14%, lower than forecasts of a drop of 11% — while imports grew more than expected by 2.7%, according to preliminary data from the customs agency.

– Jihye Lee

CNBC Pro: UBS reveals 15 global stocks sensitive to China’s reopening plans

Chinese stocks have risen this week after the nation’s health authorities reported a recent uptick in vaccination rates, which experts regard as crucial to reopening the country.

The impact of Beijing’s change in tack toward dealing with the outbreak of Covid-19 is being felt not only in China but also around the world.

The Swiss bank UBS has identified 15 stocks in the MSCI Europe index that will outperform “in an environment where China’s growth rebounds and the country reopens its borders.”

CNBC Pro subscribers can read more here.

— Ganesh Rao

Powell continues to believe in a path to a soft-ish landing

Federal Reserve Chair Jerome Powell says he continues to believe in a path to a “soft-ish” landing — even if the path has narrowed over the past year.

“I would like to continue to believe that there’s a path to a soft or soft-ish landing” Powell said at the Brookings Institution.

“Our job is to try to achieve that, and I think it’s still achievable,” Powell said. “If you look at the history, it’s not a likely outcome, but I would just say this is a different set of circumstances.”

— Sarah Min

Indexes jump on Powell comments

Fed Chair Jerome Powell’s comments indicating the central bank will slow future interest rate hikes as soon as December put upward pressure on the three major indexes.

The S&P 500 jumped up 0.6% from the red on the news.

The Dow was near flat after trading down for most of the day.

The Nasdaq Composite gained steam to 1.3% up.

— Alex Harring

Powell says Fed can “moderate the pace” of future rate increases due to lagged effect of past hikes

Federal Reserve chairman Jerome Powell told an audience at the Brookings Institution Wednesday that the central bank can afford to ease back on its tighter monetary policy at its December meeting (due to wrap up Dec. 14).

The lagged effect of higher rates already taken in 2022, plus the drawing down of the size of the Fed’s balance sheet through quantitative tightening, mean “it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said.

“The time for moderating the pace of rate increases may come as soon as the December meeting,” said the 69-year-old Fed chair.

In response to Powell’s remarks, the S&P 500 quickly gained to about 3970 vs about 3950 before the address.

— Scott Schnipper, Jeff Cox

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Business

Tesla EVs ranked among the worst in annual reliability survey by Consumer Reports

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Nov 15 (Reuters) – (This Nov. 15 story corrects headline to say Tesla EVs ranked ‘among the worst’, not ‘worst’. Story was previously corrected to remove reference to Mercedes in headline and paragraph 1, full-size pick-up trucks in paragraph 1)

Electric vehicles (EVs) from Tesla Inc (TSLA.O) and other brands were among the least reliable vehicles in the United States, Consumer Reports magazine’s annual reliability survey showed on Tuesday.

Although EVs and full-size pick up trucks enjoy the hottest demand in the market, they are the “most problematic”, the nonprofit organization that evaluates products and services said.

The report flagged a growing interest in hybrid vehicles, with 36% of prospective buyers considering one for their next car or truck purchase.

Tesla, the world’s most valuable automaker, climbed by four spots and was ranked 19th out of the 24 brands. The EV leader continues to have issues with body hardware, steering/suspension, paint and trim, and climate system on its models, the report said.

In October, the Elon Musk-helmed company said it expected to miss its vehicle delivery target this year and cited logistics challenges. read more

The top-ranked brands in the survey were Toyota and Lexus, and seven of the ten best-scoring brands were Japanese and Korean.

Among brands owned by Detroit automakers, Lincoln was the only one in the top ten, securing the tenth place.

The magazine’s annual survey of new vehicle reliability predicts which cars will give owners fewer or more problems than their competitors, based on data collected. Its scorecard is influential among consumers and industry executives.

Reporting by Aishwarya Nair in Bengaluru; Editing by Devika Syamnath

Our Standards: The Thomson Reuters Trust Principles.

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Business

Fed’s Waller says market has overreacted to consumer inflation data: ‘We’ve got a long, long way to go’

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Federal Reserve Gov. Christopher Waller said Sunday that financial markets seem to have overreacted to the softer-than-expected October consumer price inflation data last week.

“It was just one data point,” Waller said, in a conversation in Sydney, Australia, sponsored by UBS.

“The market seems to have gotten way out in front over this one CPI report. Everybody should just take a deep breath, calm down. We’ve got a ways to go ” Waller said.

Investors cheered the soft CPI print, released Thursday, driving stocks up to their best week since June. The S&P 500 index
SPX,
+0.92%
closed 5.9% higher for the week.

The data showed that the yearly rate of consumer inflation fell to 7.7% from 8.2%, marking the lowest level since January. Inflation had peaked at a nearly 41-year high of 9.1% in June.

Waller said it was good there was some evidence that inflation was coming down, but noted that there were other times over the past year where it looked like inflation was turning lower.

“We’re going to see a continued run of this kind of behavior and inflation slowly starting to come down, before we really start thinking about taking our foot off the brakes here,” Waller said.

“We’ve got a long, long way to go to get inflation down. Rates are going keep going up and they are going to stay high for awhile until we see this inflation get down closer to our target,” he added.

The Fed is focused on how high rates need to get to bring inflation down, and that will depend solely on inflation, he said.

Waller said “the worst thing” the Fed could do was stop raising rates only to have inflation explode.

The 7.7% inflation rate seen in October “is enormous,” he added.

The Fed signaled at its last meeting earlier this month that it might slow down the pace of its rate hikes in coming meetings.

The central bank has boosted rates by almost 400 basis points since March, including four straight 0.75-percentage-point hikes that had been almost unheard of prior to this year.

“We’re looking at moving in paces of potentially 50 [basis points] at the next meeting or the next meeting after that,” Waller said.

The Fed will hold its next meeting on Dec. 13-14, and then again on Jan. 31-Feb. 1.

At the same time, Powell said the Fed was likely to raise rates above the 4.5%-4.75% terminal rate that they had previously expected.

“The signal was ‘quit paying attention to the pace and start paying attention to where the endpoint is going to be,’” Waller said.

In the wake of the CPI report, investors who trade fed funds futures contracts see the Fed’s terminal rate at 5%-5.25% next spring and then quickly falling back to 4.25%-4.5% by November. That’s well below the levels prior to the CPI data.

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Business

October inflation report likely to show consumer prices increased again

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Northwestern Mutual Wealth Management Chief Investment Strategist Brent Schutte and Raymond James Washington Policy Analyst Ed Mills discuss which directions the market will go after midterm elections on ‘The Claman Countdown.’

A high-stakes inflation report due Thursday is expected to show the fight to wrestle stubbornly high consumer prices under control has a long way to go. 

The Labor Department is releasing the highly anticipated consumer price index (CPI) report Thursday morning, providing a fresh look at how hot inflation ran in October. 

Economists expect the gauge, which measures a basket of goods, including gasoline, health care, groceries and rent, to show that prices rose 0.6% from the previous month — up from the 0.4% reading in September. On an annual basis, inflation is projected to have climbed by 8%. 

The report is likely to show underlying momentum in inflation as home and rent prices march higher. Core prices, which exclude the more volatile measurements of food and energy, are expected to climb 0.5% from the previous month and 6.5% from the same time last year.

THE FED’S WAR ON INFLATION COULD COST 1M JOBS

U.S. Federal Reserve Chair Jerome Powell speaks during a news conference on interest rates, the economy and monetary policy actions at the Federal Reserve Building in Washington, D.C. June 15, 2022.  (Olivier Douliery/AFP via Getty Images / Getty Images)

While consumers have recently gotten a little relief from inflation in the form of lower gas prices, the latest CPI reports will likely show that food and rent costs have skyrocketed. That is a concerning development because higher housing and food costs most directly and acutely affect household budgets.

“It isn’t just the ongoing pace of increase that is troublesome but the pervasiveness of surging prices across various spending categories that have scarred household budgets,”  said Greg McBride, the chief financial analyst at Bankrate.

The report will also have significant implications for the Federal Reserve, which is tightening monetary policy at the fastest rate in decades as it tries to cool consumer demand and reduce out-of-control inflation.

Policymakers in October approved a fourth consecutive 75 basis point rate hike, lifting the federal funds rate to a range of 3.75% to 4% — well into restrictive levels — and indicated that more increases are coming. 

Wall Street’s growing expectation is that the Fed will trigger an economic downturn as it raises interest rates at the fastest pace in three decades to catch up with runaway inflation.

“The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive or restrictive for longer,” Fed Chairman Jerome Powell said last month. “Nonetheless, we’re committed to getting inflation back down to 2%. We think a failure to restore price stability would mean far greater pain.”

If the October inflation data comes in hotter than expected, it could raise the odds of an even steeper rate hike when the Fed meets in December and a more aggressive central bank in the coming months.

“Despite a half-dozen interest rate hikes by the Federal Reserve, any broad-based, significant and sustained easing of inflation pressures remains elusive,” McBride said. “As a result, Fed Chair Jerome Powell says there is ‘a ways to go’ in hiking interest rates to a level that dampens demand enough to corral inflation.”

A customer shops at a supermarket in Millbrae, Calif., Aug. 10, 2022.  (Li Jianguo/Xinhua via Getty Images / Getty Images)

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The Fed is also watching other economic indicators, including job growth and consumer inflation expectations. In a potentially worrisome sign, job growth has been chugging along at a healthy pace, despite the central bank’s efforts to cool the labor market.

“We still have some ways to go,” Chairman Jerome Powell told reporters last week. “And incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.”

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Business

Inflation worries hurt U.S. consumer confidence; house prices decelerating

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  • Consumer confidence index falls 5.3 points to 102.5
  • Labor market differential drops to 32.5 from 38.1
  • House price gains slow further in August

WASHINGTON, Oct 25 (Reuters) – U.S. consumer confidence ebbed in October after two straight monthly increases amid rising concerns about inflation and a possible recession next year, but households remained keen to purchase big-ticket items like motor vehicles and appliances.

The Conference Board survey on Tuesday also showed more consumers planned to buy a home over the next six months, despite soaring borrowing costs. The steady rise in consumers’ buying intentions could provide some stability for the economy in the near-term.

But there are signs that the Federal Reserve’s aggressive interest rate hikes are starting to cool the labor market, with a decline in the share of consumers viewing jobs as “plentiful” and a rise in those saying employment was “hard to get.”

“The biggest risk is the unknown lagged effects from the Fed’s cumulative tightening and the economy may not feel the full effects until next year when recession risks are high,” said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina.

The Conference Board’s consumer confidence index fell to 102.5 this month from 107.8 in September. Economists polled by Reuters had forecast the index at 106.5. The decline in confidence was across all age groups, but more pronounced in the 35-54 and well as the 55 and over cohorts.

Regionally, there were marked decreases in Florida, probably because of Hurricane Ian, and Ohio. Consumers’ 12-month inflation expectations rose to 7.0%, likely reflecting a recent reversal in gasoline prices after falling over the summer, from 6.8% last month. Food also remains very expensive.

Stubbornly high inflation and fading confidence are a blow to President Joe Biden and Democrats’ hopes of retaining control of Congress in Nov. 8 mid-term elections.

The Fed, fighting the fastest-rising inflation in 40 years, has raised its benchmark overnight interest rate from near zero in March to the current range of 3.00% to 3.25%, the swiftest pace of policy tightening in a generation or more. That rate is likely to end the year in the mid-4% range, based on the U.S. central bank officials’ own projections and recent comments.

The survey’s present situation index, based on consumers’ assessment of current business and labor market conditions, tumbled to 138.9, the lowest level since April 2021, from 150.2 in September.

Its expectations index, based on consumers’ short-term outlook for income, business and labor market conditions, fell to 78.1 from 79.5 last month. The expectations index remains below a reading of 80, a level associated with a recession and suggests that the risks of a downturn could be rising.

The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, dropped to 32.5, the lowest reading since April 2021, from 38.1 in September.

This measure correlates to the unemployment rate from the Labor Department and is still high by historical standards. Unemployment benefits data show the labor market remains tight.

Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.

SPENDING PLANS RISE

Even as consumers worried about the economy’s outlook, they remained interested in buying big-ticket items over the next six months, though they pulled back on travel plans, suggesting many Americans intended to stay home over the holiday season.

The share of consumers planning to buy motor vehicles increased to the highest level since July 2020. More consumers planned to buy appliances such as refrigerators, washing machines and vacuum cleaners.

“Consumers have abundant excess saving and they are willing to dig into this pile of cash to keep their real spending at least stable, even as inflation eats into their real incomes,” said Scott Hoyt, senior economist at Moody’s Analytics in West Chester, Pennsylvania.

Consumers were also more inclined to buy a house, probably encouraged by a sharp slowdown in house price inflation.

But surging mortgage rates remain an obstacle. The 30-year fixed mortgage rate averaged 6.94% last week, the highest in 20 years, up from 6.92% in the prior week, according to data from mortgage finance agency Freddie Mac.

A separate report on Tuesday showed the S&P CoreLogic Case-Shiller national home price index increased 13.0% year-on-year in August after advancing 15.6% in July. On a monthly basis, prices fell 0.9% in August, the second straight monthly drop.

A third report from the Federal Housing Finance Agency showed home prices increased 11.9% in the 12 months through August after rising 13.9% in July. Prices fell 0.7% on a monthly basis after decreasing 0.6% in July. It was the first time since March 2011 that monthly prices posted back-to-back declines.

“We expect home price inflation to slow in the remainder of 2022, falling to single digits by year-end and to zero by the second quarter of 2023,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York. “With home sales falling as deteriorating affordability sidelines many buyers, prices will have to adjust. However, inventory remains low, and we think that will keep a floor under home prices.”

Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.

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U.S. consumer protection watchdog’s funding unconstitutional, court rules

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Oct 19 (Reuters) – A federal appeals court ruled on Wednesday that the U.S. Consumer Financial Protection Bureau’s funding apparatus is unconstitutional, faulting a system Democrats designed to insulate the agency from requiring congressional appropriations.

The New Orleans-based 5th U.S. Circuit Court of Appeals ruled that the CFPB’s independent funding through the Federal Reserve rather than budgets passed by Congress violated the separation of powers principles in the U.S. Constitution.

That ruling, by a panel of three judges appointed by then-President Donald Trump, a Republican, in the process vacated a 2017 regulation the agency adopted aimed at combating “unfair and abusive” practices in the payday lending industry.

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The Community Financial Services Association of America sued in 2018 to challenge the rule, which barred lenders from making a new attempt to withdraw funds from an account where two consecutive attempts had failed unless consumers consented.

“Even among self-funded agencies, the Bureau is unique,” U.S. Circuit Judge Cory Wilson wrote. “The Bureau’s perpetual self-directed, double-insulated funding structure goes a significant step further than that enjoyed by the other agencies on offer.”

A CFPB spokesperson said there was “nothing novel or unusual about Congress’s decision to fund the CFPB outside of annual spending bills.”

The bureau could ask the full 5th Circuit to reconsider the case or take it to the U.S. Supreme Court.

Multiple other courts have deemed the CFPB’s funding constitutional, a point the 5th Circuit acknowledged but disagreed with.

The ruling marked the latest in a series of legal challenges to the CFPB, which Congress created in 2010 through the passage of the Dodd-Frank Act during Democrat Barack Obama’s presidency, in response to the 2008 financial crisis.

Republicans have long opposed the agency. The Supreme Court in 2020 ruled in another case that the protection Congress originally afforded the CFPB director, who could only be fired for cause, was unconstitutional.

“Extreme right-wing judges are throwing into question every rule the CFPB enforces to protect consumers and businesses alike,” U.S. Senator Elizabeth Warren, the Massachusetts Democrat who proposed the CFPB’s creation, wrote on Twitter.

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Reporting by Nate Raymond in Boston; Editing by Stephen Coates and William Mallard

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

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