WASHINGTON - America's jobless rate tumbled in September to its lowest level in 50 years, according to government data released Friday, delighting the White House even though it may not assuage recession fears as President Donald Trump's trade wars persist.
Meanwhile, with a strong dollar and slowing global economy, the US trade deficit widened in August, as the trade conflicts ate into export growth.
Trump immediately cheered the good jobs data, claiming his economic record should shield him from efforts to impeach him, and shortly after said a trade deal with China was possible soon.
But there was less-than-stellar news as well: The pace of job creation was the slowest in four months and wages fell, while the manufacturing workforce also shrank for the second time this year.
Wall Street was reassured by the news, with the benchmark Dow Jones Industrial Average ending the day with a gain of 1.4 percent.
Unemployment fell two-tenths of a point to 3.5 percent, matching the rate last recorded in December 1969, and well below what analysts had forecast, according to the Labor Department.
Employers added a total of 136,000 net new positions, which was below expectations, with notable slowdowns in education, government, finance and business services.
The August job gain was revised up sharply to 168,000, nearly 40,000 more than originally reported.
But signs of the slowdown were unambiguous: At 157,000, the average for the last three months is now well below the 223,000 a month recorded during 2018.
"Breaking News: Unemployment Rate, at 3.5%, drops to a 50 YEAR LOW. Wow America, lets impeach your President (even though he did nothing wrong!)," Trump tweeted.
The hotly anticipated jobs report also landed amid a raft of worrisome economic data showing Trump's trade wars have put a dent in the business environment and suggesting hiring should slow in the coming months.
But Federal Reserve chief Jerome Powell said Friday that although the economy "faces some risks, overall it is... in a good place."
The Fed's job "is to keep it there as long as possible," he said.
Average hourly wages fell by a penny to $28.09 last month, well below economists' expectations, putting an end to a year-long string of steady gains and limiting consumers' spending power in the coming months.
AS GOOD AS IT GETS
Despite the slight drop in the month, Trump hailed the increase in wages over the past 12 months.
"Wages are up by almost 3 percent. That's a fantastic increase for everybody out there working. We're very happy about those numbers," Trump told reporters at the White House.
But meanwhile the mining sector added no workers after three straight months of layoffs, and the auto sector shed workers for the fourth month in a row.
"Job growth is set to slow much further," Ian Shepherdson of Pantheon Macroeconomics said in a note to clients.
"This is as good as it's likely to get until the trade war is resolved."
But given the dwindling supply of workers in the US economy, some groups continue to benefit: Unemployment among Hispanics fell to its lowest level since records began in 1973.
And for workers without a high school diploma, the jobless rate fell to the lowest since records began in 1992.
The latest data did not reflect the nationwide strike launched last month by General Motors employees, who walked off the job the week after the survey for the September jobs report was conducted.
EXPORTS SLOW
In a separate report also released Friday, the Commerce Department said the yawning US trade deficit rose by nearly $1 billion in August as weakening foreign demand and the churning trade conflict ate into US export growth.
However, Trump said there is a "very good chance" to reach a trade deal with China soon.
"Right now we're in a very important stage in terms of possibly making a deal. If we make it, it will be the biggest trade deal ever made," Trump said.
But the unexpected trade deficit increase could weigh on GDP calculations for the third quarter, with a global economic slowdown expected to weaken US exports while the strong US dollar has fueled imports.
As a result, the US trade balance crept 1.6 percent higher to $54.9 billion for the month, surpassing economists' expectations.
Imports increased 0.5 percent, while exports rose 0.2 percent, rising more slowly than in July.
source: news.abs-cbn.com
WASHINGTON - A key measure of US inflation last month took its biggest leap in more than a year as costs for hospital services and over-the-counter medications rose, according to a government report Thursday.
Despite signs prices may finally be starting to heat up, the Federal Reserve is widely expected to cut interest rates again next week as policymakers seek to ward off the dangers of a slowing world economy amid President Donald Trump's trade conflicts.
After several years of low unemployment failed to ignite inflation, a single month's data may not be enough to persuade economists the long-expected return of price pressures has begun.
The Consumer Price Index, which tracks costs for household goods and services, rose 1.7 percent compared to August of last year, a tenth of a point lower than July, weighed down by falling gasoline and electricity prices.
But when volatile food and energy prices are stripped out, the "core" CPI surged 2.4 percent, the biggest gain since July 2018.
Housing costs, airfares, used auto prices and the cost of recreation all pushed the index higher.
Compared to July, monthly CPI increased only 0.1 percent, matching expectations. But for the third month in a row, the core index rose by a faster-than-expected 0.3 percent in August.
Economists widely expect the US Federal Reserve to deliver another interest rate cut next week, despite steady economic growth, strong labor markets and resilient consumer spending due to the uncertainty created by the trade war with China that is weighing on the outlook.
But economist Diane Swonk of Grant Thornton said rising core inflation could stir up opposition within the Fed to further interest rate cuts.
"The job of convincing the Fed to do more in the absence of more economic weakness just got a bit harder for Fed Chairman Jay Powell," she wrote in an analysis of the inflation numbers.
"He will sway the majority to do another quarter-point rate cut next week, but not without additional dissents."
The Fed cut the benchmark lending rate in July for the first time in more than a decade, but two members of the policy committee voted against the move.
In separate report, the Labor Department said inflation-adjusted hourly wages for US workers rose in August by the most since December.
Real average hourly earnings rose 0.4 percent compared to July, suggesting consumers may have the cash to support continued growth in retail sales, a linchpin of the economy.
source: news.abs-cbn.com
WASHINGTON - A bump in US exports helped shrink America's yawning trade deficit in July while imports from China continued to fall amid the 2 nations' trade war, government data showed Wednesday.
The relatively steady deficit comes as hopes dim for a near-term resolution to the US-China conflict, which has begun to rattle the American economy.
Economists said Wednesday the trade gap is likely to widen in the coming months as demand for US manufacturing exports weakens further, creating a drag on the economy.
The US trade gap in July narrowed by 2.7 percent to $54 billion, the largest drop in 5 months, as the United States exported more automobiles, medications, aircraft and oil drilling equipment, the Commerce Department said.
Economists had been expecting an even bigger decline.
Imports from China, the prime target of President Donald Trump's multi-pronged trade offensive launched last year, fell 1.9 percent to $39 billion, their lowest level since April.
Mexico and the European Union appear to have picked up some of the slack, as the US deficit with both markets continued to rise.
Overall, exports rose 0.6 percent to $207.4 billion -- which still left them below last year's level through July. Imports fell 0.1 percent to $261.4 billion.
Trump this week fired off stern warnings to Beijing and has planned successive waves of tariff increases through the end of the year covering the vast majority of Chinese imports into the US. Negotiations to resolve the conflict have yet to resume.
A 'GRIM' OUTLOOK
The deficit -- which is the difference between what the United States exports and what it imports -- has widened so far this year by more than eight percent.
But Trump has long viewed deficits as a defeat for the United States, arguing that they amount to stealing. These assertions are rejected by most economists.
And, despite his efforts to cut the deficit, it has continued to rise during his presidency as a growing economy, hungry for goods and services, steadily increased imports.
Weak commodities prices hit US exports for the month, as the value of crude oil, coal, fuel oil and other petroleum products fell.
Meanwhile, US services imports, such as tourism and software royalties, hit a record $49.6 billion, eating into an area where America normally enjoys a healthy surplus.
Wall Street was little moved by the numbers, with the Dow Jones Industrial Average up nearly 240 points shortly as traders rallied on positive signs in Hong Kong's political turmoil.
Macroeconomic Advisers said the latest trade numbers shaved three tenths of a percentage point off their third-quarter GDP estimate, which now stands at two percent.
Ian Shepherdson of Pantheon Macroeconomics said the July lull appeared to be the "calm before the storm."
An August survey of US manufacturers showed export orders had fallen to a 10-year low, meaning "the next few months are likely to see a serious rollover in exports," he said in a note to clients.
The hit to GDP growth in the third quarter will likely be "modest," he added, "but the outlook is grim."
source: news.abs-cbn.com
