US adds 136,000 jobs; unemployment hits 50-year low of 3.5%

US hiring has averaged 157,000 in the past three months, enough to absorb new job seekers and lower unemployment over time. (AFP)
Updated 04 October 2019

US adds 136,000 jobs; unemployment hits 50-year low of 3.5%

  • Hiring has slowed this year as the US-China trade war has intensified
  • With the US economic expansion in its 11th year and unemployment low, many businesses have struggled to find the workers they need

WASHINGTON: US employers added a modest 136,000 jobs in September, enough to help lower the unemployment rate to a new five-decade low of 3.5 percent.
Hiring has slowed this year as the US-China trade war has intensified, global growth has slowed and businesses have cut back on their investment spending. Even so, hiring has averaged 157,000 in the past three months, enough to absorb new job seekers and lower unemployment over time.
Despite the ultra-low unemployment rate, which dropped from 3.7 percent in August, average hourly wages slipped by a penny, the Labor Department said Friday in its monthly jobs report. Hourly pay rose just 2.9 percent from a year earlier, below the 3.4 percent year-over-year gain at the beginning of the year.
The unemployment rate for Latinos fell to 3.9 percent, the lowest on records dating from 1973.
With the US economic expansion in its 11th year and unemployment low, many businesses have struggled to find the workers they need. That is likely one reason why hiring has slowed since last year.
But it’s likely not the only reason. The jobs figures carry more weight than usual because worries about the health of the US economy are mounting. Manufacturers have essentially fallen into recession as US businesses have cut spending on industrial machinery, computers and other factory goods. And overseas demand for US exports has fallen sharply as President Donald Trump’s trade conflicts with China and Europe have triggered retaliatory tariffs.
A measure of factory activity fell in September to its lowest level in more than a decade. And new orders for manufactured items slipped last month, the government reported.
Persistent uncertainties about the economy in the face of Trump’s trade conflicts and a global economic slump are also affecting hotels, restaurants and other service industries. A trade group’s measure of growth in the economy’s vast services sector slowed sharply in September to its lowest point in three years, suggesting that the trade conflicts and rising uncertainty are weakening the bulk of the economy.
The job market is the economy’s main bulwark. As long as hiring is solid enough to keep the unemployment rate from rising, most Americans will likely remain confident enough to spend, offsetting other drags and propelling the economy forward.
But a slump in hiring or a rise in the unemployment rate in coming months could discourage consumers from spending as freely as they otherwise might during the holiday shopping season.
Consumers are still mostly optimistic, and their spending has kept the economy afloat this year. But they may be growing more cautious. Consumer confidence dropped sharply in September, according to the Conference Board, a business research group, although it remains at a high level.
Americans also reined in their spending in August after several months of healthy gains. The 0.1 percent increase in consumer spending that month was the weakest in six months.
Other parts of the US economy are still holding up well. Home sales, for example, have rebounded as mortgage rates have fallen, helped in part by the Federal Reserve’s two interest rate cuts this year. Sales of existing homes reached their highest level in nearly 18 months in August. And new home sales soared.
Americans are also buying cars at a still-healthy pace. Consumers would typically be reluctant to make such major purchases if they were fearful of a downturn.


Japanese keen to invest in Saudi entertainment, tourism sectors

Saudi Arabia is one large open-air museum, offering a testimony to past civilizations. (Shutterstock)
Updated 24 October 2019

Japanese keen to invest in Saudi entertainment, tourism sectors

  • ‘Japan is one of Saudi Arabia’s main target countries when it comes attracting tourists’

TOKYO: There is a genuine interest among Japanese companies to invest in Saudi Arabia’s rapidly growing entertainment and tourism industries, with some planning to set up their own operations in the Kingdom soon, according to Saudi officials.

Avex, a major Japanese company in the entertainment industry, is planning on “launching its own office in Saudi Arabia and start its own entertainment calendar for it,” Muhannad Abanmy, general manager for entertainment infrastructure development at the Kingdom’s General Entertainment Authority (GEA), told Arab News Japan in an exclusive interview.

“We’ve locked a meeting with Avex (on Thursday) to seal (the deal) with them to open their office in Saudi Arabia,” Abanmy said on the sidelines of the Saudi-Japan Vision 2030 Business Forum in Tokyo on Wednesday.

Avex is one of Japan’s top entertainment conglomerates, founded and led by Max Matsuura. It specializes in the audiovisual business as well as anime, video games, live music events and fireworks, among other entertainment-related industries.

Matsuura, who attended Wednesday’s event, spoke of the successful collaboration between Avex and Saudi authorities during the Saudi National Day in Jeddah, and said the company plans to expand its efforts in the Kingdom.

FASTFACTS

● Total trade volume between both countries is $38 billion.

● The Saudi entertainment industry to generate up to $67 billion in 10 years.

● The Kingdom plans to attract 2 million visitors by 2022.

● Thousands of e-visas have been issued since the launch of Saudi Arabia’s tourism e-visa in September.

Saudi officials are banking on the good relations their country has with Japan, including economic ties. 

They say the size of business cooperation between them can grow further with the new entertainment and tourism sectors opened.

Total trade volume between both countries is $38 billion. But “Japan has a lot to offer in terms of expertise,” Sultan Mofti, deputy governor for investment attraction at the Saudi Arabian General Investment Authority (SAGIA), told Arab News Japan.

“Looking at the size of investments in Saudi Arabia by Japanese companies tells you that there’s a lot of room to grow,” he said.

“The creation of the Saudi-Japan Vision 2030 program, the inauguration of the Riyadh office and the launch of the Tokyo office will help a lot in bridging the gap in communicating opportunities to Japanese businesses,” he added.

“That’s what we offer at SAGIA, by offering a portfolio of 20 services to Japanese businesses that are willing to invest in Saudi Arabia,” Mofti said.

“Investors won’t come until they know the return on their investment is high,” but it will be very rewarding to invest in Saudi Arabia, he added.

The Kingdom has great potential in terms of its purchasing power, with nearly 7 million people residing in each of two cities: Riyadh and Jeddah.

One entertainment event saw nearly 400,000 people attend, to the extent that the organizers had to refuse entry to many due to congestion, said officials. 

They expect the entertainment industry to generate up to $67 billion in 10 years and create hundreds of thousands of jobs as it grows.

Despite being the new kid on the block in the entertainment industry, Saudi Arabia has managed so far to create a buzz worldwide with jaw-dropping festivals and star-studded events. But as with all new things, challenges are bound to emerge.

“It’s challenging because it’s new, but the future is there,” said Abanmy, adding that the few handicaps that have been faced, including lack of regulation at one point, usually get sorted by the GEA.

The Saudi government is adamant on supporting its adolescent entertainment industry and the tourism sector, sparing neither cash nor effort to achieve the goal of becoming a global tourist destination.

Some SR5 billion ($1.33 billion) have been spent over the past two years to launch and support the entertainment industry in Saudi Arabia, attracting millions visitors from within the Kingdom and the wider Arab Gulf, said Abanmy.

Sports events are part of the attraction. In December, Saudi Arabia will host the world heavyweight boxing championship.

A world-class tennis tournament will follow suit in mid-December, which has generated a lot of interest among tourists from near and far, Abanmy said. “Recently, we had some 3,600 tourists arriving at King Khalid Airport at the same time,” he added.

This would not have happened had the Saudis not opened up their country to attract investors, officials say.

Thousands of e-visas have been issued since the launch of Saudi Arabia’s tourism e-visa in September, Majid Al-Ghanim, tourism and quality of life managing director at SAGIA, told Arab News Japan on Wednesday.

The Kingdom plans to attract 2 million visitors by 2022, and to see revenue generated from the sector reaching $2 billion by 2030.

Up to 1 million jobs from direct and indirect tourism-related businesses will be available to Saudis in the next seven years, said Al-Ghanim.

This is part of the sustainability approach that the government is planning and that helps increase employment, he added.

Nearly “75 percent of those jobs will be in the private sector, while the government can fulfill the rest,” he said.

Like Abanmy, Al-Ghanim said the Kingdom is targeting Japanese nationals and investors, adding: “Japan is one of the main target countries when it comes to tourists. We’d like to attract tourists from Japan to Saudi Arabia. We want to target and attract the Japanese.” The two countries share similarities in terms of heritage and tradition, he added.

From tourism visas to fun-filled and adrenalin-generating adventures, the Kingdom can offer it all and much more, said Al-Ghanim.

He added that Saudi Arabia is one large open-air museum, offering a testimony to past civilizations, 2,000 years of human heritage and a diverse ecology.

This is manifested in its “large formation of rocks,” archaeological sites, traditional markets, mild weather on one side of the country and a desert on the other, Al-Ghanim said.

Related