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Jun 1, 2018 Ago Updated 21 Hours Ago CNBC.com
The U.S. economy continued to add jobs at a solid clip in May, with nonfarm payrolls up 223,000 and the unemployment rate falling to an 18-year low of 3.8 percent, the Bureau of Labor Statistics reported Friday.
Economists had been expecting payroll growth of 188,000 and the jobless rate to hold steady at 3.9 percent.
The unemployment rate was last this low in April 2000. A separate level of unemployment that adds in discouraged workers and those holding part-time positions for economic reasons fell to 7.6 percent, the lowest since May 2001. A 0.1-point decline in the labor force participation rate to 62.7 percent, tied for the lowest level in 2018, contributed to the headline unemployment rate decline.
The closely watched average hourly earnings metric rose 0.3 percent, as expected. That translates to an annualized rate of 2.7 percent, up 0.1 point from April.
"The employment this month really underscores, once again, the robust strength of the labor market," said Steve Rick, chief economist at CUNA Mutual Group. "May showed steady momentum in jobs and certainly hit back at any worries among economists who thought hiring was beginning to finally slow after seeing last month's report."
In addition to the better-than-expected payrolls for May, March's count was revised up from 135,000 to 155,000 while April ended lower from 164,000 to 159,000, for a net gain of 15,000.
Job gains came from retail (31,000), health care (29,000), construction (25,000), professional and technical services (23,000) and transportation and warehousing, which added 19,000. Manufacturing also contributed 18,000 and mining grew by 6,000.
The total level of employed Americans as counted in the separate household survey rose by 293,000 while the rolls of the unemployed fell by 281,000, the latter number being the lowest level since January 2001.
Unemployment for blacks fell to a record-low 5.9 percent and 2 percent for Asians.
Overall, job creation skewed heavily toward full-time, which saw an increase of 904,000, while part-time jobs fell by 625,000.
President Donald Trump helped foreshadow a strong jobs report by tweeting about an hour before the release that he was "looking forward" to the report. Presidents typically get to see the embargoed nonfarm payrolls report the night before they are released.
"As has been said so many times by the president's supporters as well as his critics, this is another case where it would be better for President Trump to spend his time doing something other than Tweeting," said Mark Hamrick, Bankrate.com's senior economic analyst.
Investors have been looking through the headline job gains to see whether a tight labor market was pressuring wage growth. The Federal Reserve in particular has been watching for inflationary signs. Central bank officials have indicated that two more interest rate hikes are likely this year on top of the one already approved in March.
The report "had everything needed to support a June rate hike by the Fed," said Paul Ashworth, chief U.S. economist at Capital Economics. Indeed, traders moved up the probability of a June hike to 94 percent, a September increase to 72.5 percent, and a fourth hike this year in December to 37 percent, according to the CME.
"A combination of increasingly tight labor conditions and rising inflation puts the Fed in a position to build on their prior interest rate hikes as policymakers attempt to execute a steady, controlled return to normal policy," said Jim Baird, chief investment officer for Plante Moran Financial Advisors.
Stocks had little reaction to the report but rose in early trading on Wall Street. Government bond yields were sharply higher
2. G7 ministers criticize US tariffs and warn of trade war, BBC News
US Treasury Secretary Steve Mnuchin has faced sharp criticism from angry finance ministers of other G7 nations over America's imposition of new tariffs on steel and aluminium imports.
France's Bruno Le Maire warned a trade war could begin in "a few days".
Meanwhile US Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He in Beijing to try to ease trade tensions.
President Trump insisted on Twitter that the US had been "ripped off by other countries for years on trade".
He says the steel tariffs will protect US steelmakers, which he says are vital to national security. Mr Trump has also complained about barriers US firms face in Europe and elsewhere.
"Time to get smart!" he added.
At a heated meeting in the Canadian ski resort, the EU and Canada threatened to retaliate.
But Mr Mnuchin denied that the US had abandoned leadership in the global economy and said he had passed on the other countries' strong feelings to Mr Trump.
There was no joint statement at the end of the meeting, which the BBC's North America correspondent Chris Buckler says is a clear sign of discord.
Our correspondent says acrimonious debate is likely to continue next weekend when the leaders of the G7 countries - including Mr Trump - meet for a summit in Quebec. What about the China talks?
Mr Ross is in Beijing seeking deals on agriculture and energy to narrow the yawning US trade deficit with China.
His visit comes days after Washington threatened to impose additional tariffs on $50bn (£37bn) of Chinese goods.
Mr Ross said the talks had been friendly and frank but gave no further details.
Mr Mnuchin said the talks with China were also intended to bring about structural changes to allow US companies to compete fairly.
What are the tariffs?
On Thursday, Mr Ross said tariffs of 25% on steel and 10% on aluminium had come into effect.
They apply to items such as plated steel, slabs, coil, rolls of aluminium and tubes - raw materials that are used extensively across US manufacturing, construction and the oil industry.
Mr Ross said talks with the EU, Canada and Mexico had not made enough progress to warrant holding off from imposing the tariffs.
Canadian Prime Minister Justin Trudeau has said the US move is "totally unacceptable".
Canada plans to impose tariffs of up to 25% on about $13bn worth of US exports from 1 July. Goods affected will include some American steel, as well as consumer products such as yoghurt, whiskey and coffee.
Some prominent US Republicans have also voiced opposition.
House Speaker Paul Ryan has said the move "targets America's allies when we should be working with them to address the unfair trading practices of countries like China".
Canada, Mexico and the EU together exported $23bn (£17bn) worth of steel and aluminium to the US in 2017 - nearly half of the $48bn of total steel and aluminium imports last year.
What has the response been?
Leaders from the EU, Canada and Mexico have criticised the move.
French President Emmanuel Macron has called Mr Trump to tell him the tariffs were "illegal" but was told by Mr Trump that there was a need to "rebalance trade" with the EU.
The EU has issued a 10-page list of tariffs on US goods ranging from Harley-Davidson motorcycles to bourbon.
3. A Maritime Revolution Is Coming, and No One’s in the Wheelhouse, Bloomberg
Oceanalpha wants to build the world’s first autonomous cargo ship.
By Blake Schmidt
2018년 5월 29일 오전 6:00
In the vast, freezing Ross Sea, China’s “Snow Dragon” icebreaker needed to find a safe anchorage before it could begin its mission to set up China’s fifth Antarctic research station. The solution was to deploy one of Zhang Yunfei’s freezer-tested boat drones to map the ocean floor.
For Zhang, it was the latest in a string of government contracts — from surveying Tibetan lakes to testing river pollution — that have helped him turn a university project into China’s largest unmanned surface vessel company, one that has fired the interest of some of China’s biggest venture capitalists. In a pending round of funding, Oceanalpha Co. Ltd. may be valued at $780 million — about 40 times revenue — despite never having turned a profit.
“If you look at Chinese traditional culture, we’re not as close to the ocean as Western countries. But now we’re getting closer,” Zhang, 34, said at his offices in Zhuhai, a seaside city next to Macau. “We want to change the relationship that human beings have with the sea."
Outside, workers are building the company’s new $40 million waterfront headquarters on land leased at a steep discount from the government, fashioned like a giant 10-story catamaran, including topographical pools for testing. Alongside a private dock are prototypes of various sizes, from boats that can fit several people to motorized life savers for rescue missions.
While Shenzhen-based DJI led the charge in the competitive consumer market for aerial drones and China has used unmanned submersibles to probe the depths of the South China Sea, Oceanalpha is one of a handful of companies around the globe specializing in ocean-going drones that operate on the surface.
“Zhang found a unique niche,” said Derrick Xiong, a co-founder of EHang Inc., which is developing aerial drones for swarms, deliveries and air taxis in nearby Guangzhou.
Oceanalpha’s advantage is being in China, where capital is readily available and leader Xi Jinping is promoting both technology to move up the manufacturing value chain and maritime industries to enhance the nation’s overseas interests.
As its trading empire has grown, so has China’s interest in the oceans, with the construction of a modern navy, trading ports and an armada of merchant vessels. It’s a turnaround from what China’s textbooks call the “century of humiliation,” when the nation’s weakness at sea allowed a period of foreign interventions beginning with the Opium Wars.
Zhang says venture capitalists began hounding him ever since his start-up won the China Innovation & Entrepreneurship competition in 2013. Zhen Fund and GGV Capital are both investors.
Now, after nearly a decade focusing on research and development, Oceanalpha is expanding from water sampling and hydrological surveys into search and rescue, surveillance and other segments. The company may seek a public listing after 2020.
The big prize is cargo. Zhang has a new partnership with Wuhan University of Technology, China’s Classification Society and Zhuhai municipal government that will use artificial intelligence to direct autonomous container vessels.
“There will be a huge revolution in the maritime industry within three years,” Zhang said. “Cargo ships will be autonomous before cars.”
The project, called Cloudrift — a reference to the Chinese legend of the monkey king, who could summon a cloud on which he traveled — is racing against rivals to build an unmanned cargo ship this year. Norway has created a test area for pilotless vessels in the Trondheim Fjord in a joint effort by the Norwegian University of Science Technology and companies including Rolls Royce.
Cloudrift’s ship would be battery powered and use China’s BeiDou satellite navigation system. The 50-meter vessel would have a loading capacity of 500 metric tons and a range of 500 nautical miles per charge. The company is building a test site of its own among islands about 50 kilometers from Zhuhai and the group is investing $10 million in cargo technology and $50 million in USV field-test development.
Zhang is in the right place. Zhuhai was one of the fastest-growing commercial ports in China last year and the Pearl River Delta, now calling itself the Greater Bay Area as it turns high-tech, is one of China’s two giant logistics regions for container ships, along with the area around Shanghai.
Raised largely in Shenzhen by parents who worked at state-owned Chinese IT companies, Zhang’s path into boat drones began across the bay at Hong Kong University of Science and Technology, whose alumni include Frank Wang, founder of DJI and the first drone billionaire. Zhang and two PhD schoolmates, Cheng Liang and Wang Mingyu, convinced a chemistry professor to sell them sensors, which they mounted on a prototype to test the local seawater.
The three went on to found Oceanalpha, which now employs 260 people. Wang later left to join DJI. Cheng is general manager at Oceanalpha.
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America's poor becoming more destitute under Trump: U.N. expert
Jun 2, 2018 / 8:03 PM / Updated 4 hours ago
4 Min Read
GENEVA (Reuters) - Poverty in the United States is extensive and deepening under the Trump administration whose policies seem aimed at removing the safety net from millions of poor people, while rewarding the rich, a U.N. human rights investigator has found.
Philip Alston, U.N. special rapporteur on extreme poverty, called on U.S. authorities to provide solid social protection and address underlying problems, rather than “punishing and imprisoning the poor”.
While welfare benefits and access to health insurance are being slashed, President Donald Trump’s tax reform has awarded “financial windfalls” to the mega-rich and large companies, further increasing inequality, he said in a report.
U.S. policies since President Lyndon Johnson’s war on poverty in the 1960s have been “neglectful at best,” he said.
“But the policies pursued over the past year seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship,” Alston said.
Almost 41 million people or 12.7 percent live in poverty, 18.5 million in extreme poverty, and children account for one in three poor, he said. The United States has the highest youth poverty rate among industrialized countries, he added.
“Its citizens live shorter and sicker lives compared to those living in all other rich democracies, eradicable tropical diseases are increasingly prevalent and it has the world’s highest incarceration rate ... and the highest obesity levels in the developed world,” Alston said.
However, the data from the U.S. Census Bureau he cited covers only the period through 2016, and he gave no comparative figures on the extent of poverty before and after Trump came into office in January 2017.
The Australian, a veteran U.N. rights expert and New York University law professor, will present his report to the United Nations Human Rights Council later this month.
It is based on his mission in December to several U.S. states, including rural Alabama, a slum in downtown Los Angeles, California, and the U.S. territory of Puerto Rico.
A U.S. official in Geneva, asked for comment, told Reuters: “The Trump Administration has made it a priority to provide economic opportunity for all Americans.”
“SHAMEFUL STATISTICS”
Citing “shameful statistics” linked to entrenched racial discrimination, Alston said that African Americans are 2.5 times more likely than whites to live in poverty and their unemployment rate is more than double. Women, Hispanics, immigrants, and indigenous people also suffer high rates.
At least 550,000 people are homeless in America, he said.
“The tax reform will worsen this situation and ensure that the United States remains the most unequal society in the developed world,” Alston said. “The planned dramatic cuts in welfare will essentially shred crucial dimensions of a safety net that is already full of holes.”
The tax overhaul, which sailed through the Republican-controlled U.S. Congress in December, permanently cut the top corporate rate to 21 percent from 35 percent. Tax cuts for individuals, however, are temporary and expire after 2025.
Trump has said they will lead to more take-home pay for workers and has touted bonuses some workers received from their employers as evidence the law is working.
Alston dismissed allegations of widespread fraud in the welfare system and criticized the U.S. criminal justice system. It sets large bail bonds for a defendant seeking to go free pending trial, meaning wealthy suspects can afford bail while the poor remain in custody, often losing their jobs, he said.
“There is no magic recipe for eliminating extreme poverty and each level of government must make its own good-faith decisions. At the end of the day, however, particularly in a rich country like the United States, the persistence of extreme poverty is a political choice made by those in power,” he said.