Tag Archives: Economy

Venezuela opposition parties fear election ban as Socialists dig in

opposition supporters in Venezuela

By Brian Ellsworth

CARACAS (Reuters) – Venezuela’s government is pushing forward with measures that could exclude some opposition political parties from future elections, potentially paving the way for the ruling Socialists to remain in power despite widespread anger over the country’s collapsing economy.

The Supreme Court, loyal to socialist president Nicolas Maduro, has ordered the main opposition parties to “renew” themselves through petition drives whose conditions are so strict that party leaders and even an election official described them as impossible to meet.

Socialist Party officials scoff at the complaints. They say anti-Maduro candidates would be able to run under the opposition’s Democratic Unity coalition, which has been exempted from the signature drives, even if the main opposition parties are ultimately barred.

But key socialist officials are also trying to have the coalition banned, accusing it of electoral fraud. Government critics point to this and the “renewal” order as signs the socialists are seeking to effectively run uncontested in gubernatorial elections and the 2018 presidential vote.

Investors holding Venezuela’s high-yielding bonds had broadly expected Maduro to be replaced with a more market-friendly government by 2019.

The prospect of opposition parties being blocked from elections could raise concern in Washington where the Trump administration this week blacklisted Venezuela’s Vice President Tareck El Aissami and called for the release of jailed opposition leader Leopoldo Lopez.

Maduro’s opponents say his strategy is similar to that of Nicaraguan leftist president Daniel Ortega, who cruised to a third consecutive election victory in November after a top court ruling ousted the leader of the main opposition party. That left Ortega running against a candidate widely seen as a shadow ally.

“The regime is preparing Nicaraguan-style elections without political parties and false opposition candidates chosen by the government,” legislator and former Congress president Henry Ramos wrote via Twitter, suggesting the government would seek to have shadow allies run as if they were part of the opposition.

The moves come as Maduro’s approval ratings hover near 20 percent due to anger over chronic food shortages that lead to routine supermarket lootings and force many Venezuelans to skip meals. His government has avoided reform measures economists say are necessary to end the dysfunction, such as lifting corruption-riddled currency controls.

The elections council has ordered parties to collect signatures from 0.5 percent of registered voters on specific weekends.

The opposition estimates parties could in some cases have to mobilize a combined total of as many as 600,000 people in a single weekend and take them to 360 authorized locations, an arrangement they call logistically implausible.

‘YOU HAVE NO PARTY’

Luis Rondon, one of five directors of the National Elections Council who tends to be a lone voice of dissent against its decisions, described the process as blocking the chances for opposition parties to stay on the rolls.

The council did not respond to a request for comment.

There is little question that sidelining the opposition would be the Socialist Party’s easiest way to remain in power.

Socialist Party leaders have sought to delegitimize opposition parties by accusing them of involvement in terrorism. They point to the opposition’s past, which includes a bungled coup attempt in 2002 against late socialist leader Hugo Chavez.

Maduro’s ballot-box weakness was put on display when the Democratic Unity coalition took two thirds of the seats in Congress in 2015, the opposition’s biggest win since Chavez took office in 1999.

Socialist Party legislator Hector Rodriguez described the “renewal” process as a “simple requirement,” insisting that “a political party that does not have the capacity to collect that amount (of signatures) cannot be considered a national party.”

Still, Socialist Party officials have done little to dispel fears they are trying to bar opponents from elections.

Following complaints that gubernatorial elections were being stalled, Socialist Party No. 2 Diosdado Cabello reminded the opposition that they could not take part in any race until they complied with the “renewal” order.

“Who would benefit if we held elections tomorrow?” asked Cabello during a January episode of his television talk show ‘Hitting with the Mallet’, in which he often wields a spiked club. “If you want we could hold elections tomorrow and you wouldn’t participate because you have no party.”

Even without pushing parties aside, the Maduro government has already blocked key opposition figures or laid the groundwork to do so.

Lopez, a former mayor, remains behind bars for leading anti-government protests in 2014 following a trial that one of the state prosecutors involved called a mockery of justice.

And the national comptroller has said he is considering barring state governor and ex-presidential candidate Henrique Capriles from holding office on alleged irregularities in managing public funds.

Pollster Luis Vicente Leon, who is openly critical of the government, said continuing delays to the election for governors is a sign the Socialist Party may do the same for other elections in which it faces long odds.

“Once you seek mechanisms by which you avoid, delay, impede or block an election, why wouldn’t you block the rest?” he said in a recent radio interview.

“It’s not that these elections (for governors) are in jeopardy, it’s that all elections are in jeopardy.”

(Editing by Christian Plumb and Andrew Hay)

U.S. weekly jobless claims rise less than expected

leaflet at job fair

WASHINGTON – The number of Americans filing for unemployment benefits increased less than expected last week, a sign that the labor market was continuing to tighten.

Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 239,000 for the week ended Feb. 11, the Labor Department said on Thursday.

Data for the prior week was unrevised.

Claims have been below 300,000, a threshold associated with a strong labor market, for 102 consecutive weeks.

That is the longest stretch since 1970, when the labor market was much smaller.

The labor market is at or close to full employment, with the unemployment rate at 4.8 percent.

Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 245,000 in the latest week.

A Labor Department analyst said there were no special factors influencing last week’s data and no states had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, edged up 500 to 245,250 last week.

The claims report also showed the number of people still receiving benefits after an initial week of aid slipped 3,000 to 2.08 million in the week ended Feb. 4.

The four-week average of the so-called continuing claims rose 4,250 to 2.08 million.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

 

U.S. housing starts drop; permits rise to one-year high

house under construction

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. homebuilding fell in January as the construction of multi-family housing projects dropped, but upward revisions to the prior month’s data and a jump in permits to a one-year high suggested the housing recovery remained on track.

Other data on Thursday showed only a modest increase in the number of Americans filing new applications for unemployment benefits last week, a sign that the labor market was continuing to tighten.

Housing starts fell 2.6 percent to a seasonally adjusted annual rate of 1.25 million units last month, the Commerce Department said. December’s starts were revised up to a rate of 1.28 million units from the previously reported 1.23 million pace.

Homebuilding was up 10.5 percent compared to January 2016. Permits for future construction jumped 4.6 percent in January to a rate of 1.29 million units, the highest level since November 2015. Building permits in the South, where most homebuilding occurs, hit their highest level since July 2007.

With overall permits now outpacing starts, homebuilding is likely to rebound in the coming months. Economists polled by Reuters had forecast groundbreaking activity slipping to a rate of 1.22 million units last month and building permits rising to a 1.23 million pace.

Prices of U.S. Treasuries slid and U.S. stock index futures trimmed losses after the data. The dollar <.DXY> pared losses against a basket of currencies.

LABOR MARKET TIGHTENING

The housing recovery is being driven by a strong labor market, which is boosting employment opportunities for young people and supporting household formation.

In a separate report, the Labor Department said initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 239,000 for the week ended Feb. 11.

Claims have been below 300,000, a threshold associated with a strong job market, for 102 consecutive weeks. That is the longest stretch since 1970, when the labor market was much smaller. The labor market is at or close to full employment, with the unemployment rate at 4.8 percent.

Economists had forecast first-time applications for jobless benefits rising to 245,000 in the latest week. While the labor market is expected to continue to underpin the housing market, higher mortgage rates could slow demand for housing.

A survey on Wednesday showed homebuilders’ confidence slipped in February but remained at levels consistent with a growing housing market. Builders anticipated a slowdown in buyer traffic and continued to grapple with shortages of developed lots and skilled labor.

January’s starts were above the fourth-quarter average, suggesting housing will again contribute to gross domestic product in the first three months of this year.

Homebuilding last month surged 55.4 percent in the Northeast region of the country. It jumped 20.0 percent in the South to the highest level since August 2007. Starts fell 41.3 percent in the West, likely due to the impact of unusually wet weather.

Last month, single-family homebuilding, which accounts for the largest share of the residential housing market, climbed 1.9 percent to a pace of 823,000 units.

Starts for the volatile multi-family housing segment tumbled 10.2 percent to a rate of 423,000 units.

Single-family permits slipped 2.7 percent last month after increasing for five consecutive months. Single-family starts in the South rose to their highest level since August 2007.

Building permits for multi-family units soared 19.8 percent.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

U.S. retail sales beat expectations in January

shopper looking at tablets in best buy

WASHINGTON, Feb 15 (Reuters) – U.S. retail sales rose more than expected in January as households bought electronics and a range of other goods, pointing to sustained domestic demand that should bolster economic growth in the first quarter.

The Commerce Department said on Wednesday retail sales increased 0.4 percent last month. December’s retail sales were revised up to show a 1.0 percent rise instead of the previously reported 0.6 percent advance.

Last month’s fairly upbeat sales came despite motor vehicle purchases recording their biggest drop in 10 months.

Compared to January last year retail sales were up 5.6 percent.

Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.4 percent after an upwardly revised 0.4 percent gain in December.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Economists polled by Reuters had forecast retail sales ticking up 0.1 percent and core sales gaining 0.3 percent last month.

January’s fairly solid retail sales supported views that economic growth will accelerate in the first quarter.

The economy grew at a 1.9 percent annualized rate in the fourth quarter.

Consumer spending is being supported by a tightening labor market, which is gradually boosting wage growth.

That in turn is underpinning economic growth, paving the way for at least two interest rate increases from the Federal Reserve this year.

Fed Chair Janet Yellen told lawmakers on Tuesday that “waiting too long to remove accommodation would be unwise.”

The U.S. central bank has forecast three rate increases this year.

The Fed hiked its overnight interest rate last December by 25 basis points to a range of 0.50 percent to 0.75 percent.

Last month, sales at electronics and appliances stores jumped 1.6 percent, the biggest rise since June 2015, after falling 1.1 percent in December.

Receipts at building material stores increased 0.3 percent.

Sales at clothing stores jumped 1.0 percent, the largest rise in nearly a year.

Department store sales climbed 1.2 percent, the biggest increase since December 2015.

Department store sales have been undercut by online retailers, led by Amazon.com <AMZN.O>.

That has led to some retailers, including Macy’s <M.N>, Sears <SHLD.O> and Abercrombie & Fitch <ANF.N> announcing shop closures.

Sales at online retailers were unchanged last month after soaring 1.9 percent in December.

Receipts at restaurants and bars rose 1.4 percent, while sales at sporting goods and hobby stores shot up 1.8 percent.

Receipts at auto dealerships, however, fell 1.4 percent after vaulting 3.2 percent in December.

Last month’s drop was the biggest since March 2016.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

((Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters

Messaging: lucia.mutikani.thomsonreuters.com@reuters.net))

Consumer prices post largest gain in nearly four years

Vehicles wait in line for gas

WASHINGTON, Feb 15 (Reuters) – U.S. consumer prices recorded their biggest increase in nearly four years in January as households paid more for gasoline and other goods, suggesting inflation pressures could be picking up.

The Labor Department said on Wednesday its Consumer Price Index jumped 0.6 percent last month after gaining 0.3 percent in December. January’s increase in the CPI was the largest since February 2013.

In the 12 months through January, the CPI increased 2.5 percent, the biggest year-on-year gain since March 2012.

The CPI rose 2.1 percent in the year to December.

Economists polled by Reuters had forecast the CPI rising 0.3 percent last month and advancing 2.4 percent from a year ago.

Inflation is trending higher as prices for energy goods and other commodities rebound as global demand picks up.

The so-called core CPI, which strips out food and energy costs, rose 0.3 percent last month after increasing 0.2 percent in December. That lifted the year-on-year core CPI increase to 2.3 percent in January from December’s 2.2 percent increase.

The Fed has a 2 percent inflation target and tracks an inflation measure which is currently at 1.7 percent.

Gradually firming inflation and a tightening labor market could allow the Fed to raise interest rates at least twice this year.

Fed Chair Janet Yellen told lawmakers on Tuesday that “waiting too long to remove accommodation would be unwise.”

The U.S. central bank has forecast three rate increases this year. The Fed hiked its overnight interest rate last December by 25 basis points to a range of 0.50 percent to 0.75 percent.

Last month, gasoline prices surged 7.8 percent, accounting for nearly half of the rise in the CPI. That followed a 2.4 percent increase in December.

Food prices edged up 0.1 percent after being unchanged for six straight months.

The cost of food consumed at home was unchanged after dropping for eight consecutive months.

Within the core CPI basket, rents increased 0.3 percent last month after a similar gain in December.

Owners’ equivalent rent of primary residence gained 0.2 percent in January after increasing 0.3 percent the prior month.

The cost of medical care rose 0.2 percent, with the prices for hospital services and prescription medicine both increasing 0.3 percent. Motor vehicle prices shot up 0.9 percent, the largest rise since November 2009.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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New York City mayor says ‘affordability crisis’ threatens city

New York Mayor

By Hilary Russ

NEW YORK (Reuters) – New York City is threatened by an “affordability crisis” because rising housing prices have significantly outpaced wage growth, Mayor Bill de Blasio said on Monday.

De Blasio used his state of the city address to speak broadly about New Yorkers’ struggles to pay rent and make ends meet and discussed recent proposals, rather than lay out many new proposals.

De Blasio, a Democrat who took office in January 2014, is up for reelection in November.

Held at the historic Apollo Theater in Harlem, home to numerous American musical legends including Billie Holiday, the program featured at least 45 minutes of introductory remarks that were a mostly a love story to the city’s diversity.

“So many people in this city are afraid they cannot stay in the city that they love,” because of high costs, de Blasio said.

De Blasio cited a long list of what he considers some of his biggest accomplishments, including the implementation of neighborhood policing and the highest ever four-year high-school graduation rate of 72.6 percent in 2016.

He said residents would hear in coming weeks more details of forthcoming proposals about homelessness, opioid addiction and the creation of more higher paying jobs, which he called the “next frontline.”

He said the city would strive to create 100,000 more permanent good jobs that pay at least $50,000 a year.

Last week, de Blasio released information about other proposals that he touched on in his speech, including ways to help seniors and low-income people afford housing by adding new units and providing more rental assistance.

He said previously that he would seek to add 10,000 apartments for households earning less than $40,000 a year, half of which would be reserved for seniors, while another 500 would be for veterans.

De Blasio referenced another element of the plan announced last week to help more than 25,000 older residents with rent of up to $1,300 a month through the city’s “mansion tax,” which he has proposed before.

“You will hear people say it cannot be done,” de Blasio said of the tax. “They will say you cannot get it through Albany,” using the state capital to refer to the state government, whose approval would be required for the tax.

The mansion tax would bring in $336 million on the sale of homes over $2 million, he said.

“We’re not going to give tax breaks to people doing well,” de Blasio said. “We’re going to ask them to do more.”

(Reporting by Hilary Russ; Editing by Leslie Adler)

Higher energy prices boost producer inflation

empty shopping cart

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. producer prices rose more than expected in January, recording their largest gain in more than four years amid increases in the cost of energy products and some services, but a strong dollar continued to keep underlying inflation tame.

The Labor Department said on Tuesday its producer price index for final demand jumped 0.6 percent last month. That was the largest increase since September 2012 and followed a 0.2 percent rise in December.

Despite the surge, the PPI only increased 1.6 percent in the 12 months through January. That followed a similar gain in the 12 months through December. Economists polled by Reuters had forecast the PPI rising 0.3 percent last month and the year-on-year increase moderating to 1.5 percent.

The U.S. dollar pared losses against a basket of currencies after the data. Prices of U.S. Treasuries were mixed while U.S. stock index futures were largely flat.

The rise in producer prices comes as manufacturers report paying more for raw materials. The Institute for Supply Management’s (ISM) prices index surged in January to its highest level since May 2011. The ISM index, which is closely correlated to the PPI, has increased for 11 straight months.

The gains in PPI last month largely reflected increases in the prices of commodities such as crude oil, which are being boosted by a steadily growing global economy. Oil prices have risen above $50 per barrel.

But with the dollar strengthening further against the currencies of the United States’ main trading partners and wage growth still sluggish, the spillover to consumer inflation from rising commodity prices is likely to be limited.

A government report on Friday showed import prices excluding fuels fell in January for a third straight month. Data on Wednesday is expected to show the consumer price index increased 0.3 percent in January after a similar gain in December, according to a Reuters survey of economists.

Last month, prices for final demand goods increased 1.0 percent, the largest rise since May 2015. The gain accounted for more than 60 percent of the increase in the PPI. Prices for final demand goods advanced 0.6 percent in December.

Wholesale food prices were unchanged last month after climbing 0.5 percent in December. Healthcare costs rose 0.2 percent. Those costs feed into the Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) index.

The volatile trade services component, which measures changes in margins received by wholesalers and retailers, shot up 0.9 percent in January after being unchanged in the prior month.

A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.2 percent. That followed a 0.1 percent gain in December. The so-called core PPI increased 1.6 percent in the 12 months through January, slowing from December’s 1.7 percent gain.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Wall Street opens at record highs as ‘Trump trade’ resumes

Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S.

By Yashaswini Swamynathan

(Reuters) – The main U.S. stock indexes hit record intraday highs on Monday, led by financials and industrials, as the so-called “Trump trade” sparked back to life on renewed optimism about the economy.

The three main indexes closed at record highs on Thursday and Friday rose after President Donald Trump vowed to make a major tax announcement in the next few weeks.

The S&P 500 has surged 8.3 percent since Trump’s Nov. 8 election through Friday’s close, fueled by expectations he will lower corporate taxes, reduce regulations and increase infrastructure spending.

While the rally had stalled amid concerns over Trump’s protectionist stance and lack of clarity on policy reforms, the S&P 500 has not dropped more than 1 percent in 84 trading days, indicating investors were giving Trump the benefit of doubt.

Investors were also comforted by the two-day U.S.-Japan summit held over the weekend apparently having ended smoothly without Trump talking tough on trade, currency and security issues.

The Japanese yen, the demand for which rises when risk appetite falls, was the biggest underperformer among major currencies. World stocks rose, with Asian shares rallying to a 1-1/2-year high.

Global markets are following the leader (U.S. stocks) after the resurgence of the “Trump trade”, Peter Cardillo, chief market economist at First Standard Financial wrote in a note.

At 9:38 a.m. EDT the Dow Jones Industrial Average was up 91.51 points, or 0.45 percent, at 20,360.88.

The S&P 500 was up 7.44 points, or 0.32 percent, at 2,323.54 and the Nasdaq Composite was up 23.61 points, or 0.41 percent, at 5,757.73.

Six of the 11 major S&P sectors were higher, with financials and industrials gaining the most. The two sectors are seen benefiting the most from Trump’s policies.

Telecom stocks were down the most, 1.4 percent, due to a 1.3 percent drop in Verizon after the network carrier said it would reintroduce its unlimited data plan.

Fears of a price war hit other carriers. ATT was down 1.4 percent, T-Mobile dropped 3 percent, Sprint fell 0.4 percent.

Apple was the top stock on the S&P and the Nasdaq, rising 1 percent and closing on its record high after Goldman Sachs raised its price target on the stock.

Zeltiq Aesthetics surged 12.5 percent to $55.60 after Allergan said it would buy the medical device maker for about $2.48 billion. Allergan’s stock was slightly higher.

Chemours rose 14 percent after the company and DuPont said they had agreed to pay about $671 million in cash to settle several lawsuits related to the leak of a toxic chemical. DuPont’s stock was up 0.5 percent.

Advancing issues outnumbered decliners on the NYSE by 1,987 to 691. On the Nasdaq, 1,784 issues rose and 623 fell.

The S&P 500 index showed 44 new 52-week highs and no new lows, while the Nasdaq recorded 94 new highs and six new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)

Energy products boost U.S. import prices in January

shipping containers

WASHINGTON (Reuters) – U.S. import prices rose more than expected in January amid further gains in the cost of energy products, but a strong dollar continued to dampen underlying imported inflation.

The Labor Department said on Friday import prices increased 0.4 percent last month after an upwardly revised 0.5 percent rise in December. In the 12 months through January, import prices jumped 3.7 percent, the largest gain since February 2012, after advancing 2.0 percent in December.

Economists polled by Reuters had forecast import prices gaining 0.2 percent last month after a previously reported 0.4 percent increase in December.

The dollar extended gains against the euro on the data, while prices for U.S. government debt fell.

Import prices are rising as firming global demand lifts prices for oil and other commodities, but the spillover to a broader increase in inflation is being limited by dollar strength.

The dollar gained 4.4 percent against the currencies of the United States’ main trading partners in 2016, with most of the appreciation occurring in last months of the year.

This suggests that the greenback will continue to depress imported inflation in the near-term even though the dollar has weakened 2.9 percent on a trade-weighted basis this year.

Prices for imported fuels increased 5.8 percent last month

after rising 6.6 percent in December. Import prices excluding fuels fell 0.2 percent following a 0.1 percent dip the prior

month. The cost of imported food dropped 1.3 percent after declining 1.5 percent in December.

Prices for imported capital goods edged down 0.1 percent after being unchanged in December. The cost of imported automobiles dropped 0.5 percent, the biggest decline since January 2015.

Imported consumer goods prices excluding automobiles fell 0.1 percent last month after sliding 0.2 percent in December.

The report also showed export prices ticking up 0.1 percent

in January after increasing 0.4 percent in December.

Export prices were up 2.3 percent from a year ago. That was the biggest increase since January 2012 and followed a 1.3 percent advance in December.

Prices for agricultural exports dipped 0.1 percent last month as falling prices for soybeans offset higher prices for corn. Agricultural export prices fell 0.2 percent in December.

Prices for industrial supplies and materials exports rose for a second straight month in January.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

U.S. jobless claims drop to near 43-year low

Applicants fill out forms at job fair

WASHINGTON, Feb 9 (Reuters) – The number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, amid a further tightening of the labor market that could eventually spur faster wage growth.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 234,000 for the week ended Feb. 4, the Labor Department said on Thursday. That left claims just shy of the 43-year low of 233,000 touched in early November.

Claims have now remained below 300,000, a threshold associated with a strong labor market, for 101 straight weeks.

That is the longest stretch since 1970, when the labor market was much smaller.

The labor market is at or close to full employment, with the unemployment rate at 4.8 percent. It hit a nine-year low of 4.6 percent in November.

Further tightening in labor market conditions could boost wage growth, which has remained stubbornly sluggish despite anecdotal evidence of more companies struggling to find qualified workers.

Lackluster wage growth, if sustained, could hurt consumer spending and crimp economic growth. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 250,000 in the latest week.

A Labor Department analyst said there were no special factors influencing last week’s data and no states had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,750 to 244,250 last week, the lowest level since November 1973.

The claims report also showed the number of people still receiving benefits after an initial week of aid increased 15,000 to 2.08 million in the week ended Jan. 28. The four-week average of the so-called continuing claims fell 3,750 to 2.08 million.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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