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.


EU pledges to stay green in virus recovery

Updated 29 May 2020

EU pledges to stay green in virus recovery

  • To help economies from the 27-nation bloc bounce back as quick as possible

BRUSSELS: The European Commission pledged on Thursday to stay away from fossil-fueled projects in its coronavirus recovery strategy, and to stick to its target of making Europe the first climate neutral continent by the middle of the century, but environmental groups said they were unimpressed.

To weather the deep recession triggered by the pandemic, Commission President Ursula von der Leyen has proposed a €1.85 trillion ($2 trillion) package consisting of a revised long-term budget and a recovery fund, with 25 percent of the funding set aside for climate action.

To help economies from the 27-nation bloc bounce back as quick as possible, the EU’s executive arm wants to increase a €7.5-billion ($8.25 billion) fund presented earlier this year that was part of an investment plan aiming at making the continent more environmentally friendly.

Under the commission’s new plan, which requires the approval of member states, the mechanism will be expanded to €40 billion ($44 billion) and is expected to generate another €150 billion in public and private investment. The money is designed to help coal-dependent countries weather the costs of moving away from fossil fuels.

Environmental group WWF acknowledged the commission’s efforts but expressed fears the money could go to “harmful activities such as fossil fuels or building new airports and motorways.”

“It can’t be used to move from coal to coal,” Frans Timmermans, the commission executive vice president in charge the European Green Deal, responded on Thursday. “It is unthinkable that support will be given to go from coal to coal. That is how we are going to approach the issue. That’s the only way you can ensure you actually do not harm.”

Timmermans conceded, however, that projects involving fossil fuels could sometimes be necessary, especially the use of natural gas to help move away from coal.

The commission also wants to dedicate an extra €15 billion ($16.5 billion) to an agricultural fund supporting rural areas in their transition toward a greener model.

Von der Leyen, who took office last year, has made the fight against climate change the priority of her term. Timmermans insisted that her goal to make Europe the world’s first carbon-neutral continent by 2050 remained unchanged, confirming that upgraded targets for the 2030 horizon would be presented by September.

Reacting to the executive arm’s recovery plans, Greenpeace lashed out at a project it described as “contradictory at best and damaging at worst,” accusing the commission of sticking to a growth-driven mentality detrimental to the environment.

“The plan includes several eye-catching green `options,’ including home renovation schemes, taxes on single-use plastic waste and the revenues of digital giants like Google and Facebook. But it does not solve the problem of existing support for gas, oil, coal, and industrial farming — some of the main drivers of a mounting climate and environmental emergency,” Greenpeace said.

“The plan also fails to set strict social or green conditions on access to funding for polluters like airlines or carmakers.”

Timmermans said the EU would keep investing in the development of emission-free public transportation, and promoting clean private transport through the EU budget.