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IMF head projects slightly stronger global growth in 2024
WASHINGTON | Strong economic activity in the United States and emerging markets is projected to help drive global growth by about 3% this year, the International Monetary Fund’s chief said Thursday, below the annual historic average and a warning sign about potential lackluster performances through the 2020s.
“Without a course correction, we are indeed heading for ‘the Tepid Twenties’ -– a sluggish and disappointing decade,” said Kristalina Georgieva, the organization’s managing director, in announcing the economic projection and longer-term outlook.
She said global economic activity is weak by past measurements and debt is up, posing major challenges to public finances in many parts of the world.
“The scars of the pandemic are still with us. The global output loss since 2020 is around $3.3 trillion, with the costs disproportionately falling on the most vulnerable countries,” she said.
The anticipated growth rate of just more than 3% is slightly above last year’s projection. The historic average is 3.8%.
“Global growth is marginally stronger on account of robust activity in the United States and in many emerging market economies,” Georgieva said.
The IMF and its fellow lending agency, the World Bank, will hold their spring meetings next week in Washington, where finance ministers, central bankers and policymakers will discuss the global economy’s most pressing issues.
The annual gathering will take place as several conflicts threaten global financial stability, including Russia’s invasion of Ukraine and the war between Hamas and Israel in Gaza.
Instagram begins blurring nudity
in messages
LONDON | Instagram says it’s deploying new tools to protect young people and combat sexual extortion, including a feature that will automatically blur nudity in direct messages.
The social media platform said in a blog post Thursday that it’s testing out the features as part of its campaign to fight sexual scams and other forms of “image abuse,” and to make it tougher for criminals to contact teens.
Sexual extortion, or sextortion, involves persuading a person to send explicit photos online and then threatening to make the images public unless the victim pays money or engages in sexual favors. Recent high-profile cases include two Nigerian brothers who pleaded guilty to sexually extorting teen boys and young men in Michigan, including one who took his own life, and a Virginia sheriff’s deputy who sexually extorted and kidnapped a 15-year-old girl.
Instagram and other social media companies have faced growing criticism for not doing enough to protect young people. Mark Zuckerberg, the CEO of Instagram’s owner Meta Platforms, apologized to the parents of victims of such abuse during a Senate hearing earlier this year.
Meta, which is based in Menlo Park, California, also owns Facebook and WhatsApp but the nudity blur feature won’t be added to messages sent on those platforms.
Instagram said scammers often use direct messages to ask for “intimate images.” To counter this, it will soon start testing out a nudity-protection feature for direct messages that blurs any images with nudity “and encourages people to think twice before sending nude images.”
“The feature is designed not only to protect people from seeing unwanted nudity in their DMs, but also to protect them from scammers who may send nude images to trick people into sending their own images in return,” Instagram said.
The feature will be turned on by default globally for teens under 18. Adult users will get a notification encouraging them to activate it.
Images with nudity will be blurred with a warning, giving users the option to view it. They’ll also get an option to block the sender and report the chat.
For people sending direct messages with nudity, they will get a message reminding them to be cautious when sending “sensitive photos.” They’ll also be informed that they can unsend the photos if they change their mind, but that there’s a chance others may have already seen them.
As with many of Meta’s tools and policies around child safety, critics saw the move as a positive step, but one that does not go far enough.
“I think the tools announced can protect senders, and that is welcome. But what about recipients?” said Arturo Béjar, former engineering director at the social media giant who is known for his expertise in curbing online harassment. He said 1 in 8 teens receives an unwanted advance on Instagram every seven days, citing internal research he compiled while at Meta that he presented in November testimony before Congress. “What tools do they get? What can they do if they get an unwanted nude?”
Béjar said “things won’t meaningfully change” until there is a way for a teen to say they’ve received an unwanted advance, and there is transparency about it.
Instagram said it’s working on technology to help identify accounts that could be potentially be engaging in sexual extortion scams, “based on a range of signals that could indicate sextortion behavior.”
To stop criminals from connecting with young people, it’s also taking measures including not showing the “message” button on a teen’s profile to potential sextortion accounts, even if they already follow each other, and testing new ways to hide teens from these accounts.
In January, the FBI warned of a “huge increase” in sextortion cases targeting children — including financial sextortion, where someone threatens to release compromising images unless the victim pays. The targeted victims are primarily boys between the ages of 14 to 17, but the FBI said any child can become a victim. In the six-month period from October 2022 to March 2023, the FBI saw a more than 20% increase in reporting of financially motivated sextortion cases involving minor victims compared to the same period in the previous year.
Average long-term U.S. mortgage rate edges closer to 7%
LOS ANGELES | The average long-term U.S. mortgage rate rose to its highest level in five weeks, a setback for prospective homebuyers during what’s traditionally the busiest time of the year for home sales.
The average rate on a 30-year mortgage rose to 6.88% from 6.82% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.27%.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.
Rates have been mostly drifting higher in recent weeks as stronger-than-expected reports on employment and inflation have stoked doubt among bond investors over how soon the Federal Reserve will move to lower its benchmark interest rate. The central bank has signaled that it expects to cut its short-term rate three times this year once it sees more evidence of cooling inflation.
On Wednesday, Treasury yields jumped in the bond market following a report showing that inflation was hotter last month than economists expected. The March consumer prices report was the third straight showing inflation readings well above the Fed’s 2% target. A report on Thursday showed inflation at the wholesale level was a touch lower last month than economists expected.
The yield on the 10-year Treasury, which lenders use as a guide to pricing loans, jumped to 4.57% on Thursday afternoon, it’s highest level since November. How the bond market reacts to the Fed’s interest rate policy, the moves in the 10-year Treasury yield, as well as other factors can influence mortgage rates.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December, though it also hasn’t gone below the 6.6% it averaged in mid January.
Mortgage rates will likely continue to hover between that 6.6% and 7% range until inflation shows convincing progress towards the Fed’s target, said Hannah Jones, Realtor.com’s senior economic research analyst.
“Eager buyers and sellers are hoping to see more favorable housing conditions as the spring selling season kicks off,” said Jones. “However, mortgage rates have offered little relief as economic data, as measured by both inflation and employment, remains strong.”
The U.S. housing market is coming off a deep, 2-year sales slump triggered by a sharp rise in mortgage rates and a dearth of homes on the market. The overall pullback in mortgage rates since their peak last fall helped spur a pickup in sales the first two months of this year.
Sales of previously occupied U.S. homes rose in February from the previous month to the strongest pace in a year. That followed a month-to-month home sales increase in January.
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 5%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market because many homeowners who bought or refinanced more than two years ago are reluctant to sell and give up their fixed-rate mortgages below 3% or 4%.
Many economists still expect that mortgage rates will ease moderately later this year, though most forecasts call for the average rate on a 30-year home loan to remain above 6%.
The cost of refinancing a home loan also got pricier this week. Borrowing costs on 15-year fixed-rate mortgages, often used to refinance longer-term mortgages, rose this week, pushing the average rate to 6.16% from 6.06% last week. A year ago it averaged 5.54%, Freddie Mac said.
Fewer Americans file for jobless claims
WASHINGTON | Fewer Americans applied for jobless benefits last week as the labor market continues to thrive despite the Federal Reserve’s efforts to cool it.
The Labor Department reported Thursday that filings for unemployment claims for the week ending April 6 fell by 11,000 to 211,000 from the previous week’s 222,000.
The four-week average of claims, which smooths out some of the week-to-week swings, fell by 250 to 214,250.
Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to stifle the four-decade high inflation that took hold after the economy bounced back from the COVID-19 recession of 2020. Part of the Fed’s goal was to loosen the labor market and cool wage growth, which it believes contributed to persistently high inflation.
Many economists thought there was a chance the rapid rate hikes could tip the country into recession, but jobs have remained plentiful and the economy has held up better than expected thanks to strong consumer spending.
In March, U.S. employers added a surprising 303,000 jobs, yet another example of the U.S. economy’s resilience in the face of high interest rates. The unemployment rate dipped from 3.9% to 3.8% and has now remained below 4% for 26 straight months, the longest such streak since the 1960s.
Though layoffs remain at low levels, companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple, eBay, TikTok, Snap, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.
Outside of tech and media, UPS, Macy’s and Levi Strauss also have recently cut jobs.
In total, 1.82 million Americans were collecting jobless benefits during the week that ended March 30, an increase of 28,000 from the previous week and the most since January.
—From AP reports
