Tag Archives: Economy

U.S. job growth slows in July, unemployment rate dips

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth slowed more than expected in July as employment in the transportation and utilities sectors fell, but a drop in the unemployment rate suggested that the labor market was tightening.

Nonfarm payrolls increased by 157,000 jobs last month, the Labor Department said on Friday. The economy created 59,000 more jobs in May and June than previously reported and needs to generate about 120,000 jobs per month to keep up with growth in the working-age population.

The unemployment rate fell one-tenth of a percentage point to 3.9 percent in July, even as more people entered the labor force in a sign of confidence in their job prospects. The low unemployment rate could allow the Federal Reserve to raise interest rates again in September.

The jobless rate had risen in June from an 18-year low of 3.8 percent in May. Economists polled by Reuters had forecast nonfarm payrolls increasing by 190,000 jobs last month and the unemployment rate falling to 3.9 percent.

The slowdown in hiring last month likely is not the result of trade tensions, which have escalated in recent days, but rather because of a shortage of workers. There are about 6.6 million unfilled jobs in the nation. A survey of small businesses published on Thursday showed a record number in July of establishments reporting that they could not find workers.

According to the NFIB, the vacancies were concentrated in construction, manufacturing and wholesale trade industries. Small businesses said they were also struggling to fill positions that did not require skilled labor.

The Fed’s Beige Book report last month showed a scarcity of labor across a wide range of occupations, including highly skilled engineers, specialized construction and manufacturing workers, information technology professionals and truck drivers.

The shortage of workers is steadily pushing up wages.

Average hourly earnings increased seven cents, or 0.3 percent, in July after gaining 0.1 percent in June. The annual increase in wages was unchanged at 2.7 percent in July.

U.S. stock market futures dipped after the data while the dollar <.DXY> fell against a basket of currencies. Prices of U.S. Treasuries were slightly higher.

TRADE TENSIONS

President Donald Trump’s administration has imposed duties on steel and aluminum imports, provoking retaliation by the United States’ trade partners, including China, Canada, Mexico and the European Union. It has also slapped 25 percent tariffs on $34 billion worth of Chinese imports.

Beijing has fought back by slapping tariffs on U.S. exports to China. On Friday, China’s Commerce Ministry said a new set of proposed import tariffs on $60 billion worth of U.S. goods are rational and restrained and warned that it reserves the right of further countermeasures in the intensifying trade war.

On Wednesday, Trump proposed a higher 25 percent tariff on $200 billion worth of Chinese imports.

Economists have warned that the tit-for-tat import duties, which have unsettled financial markets, could undercut manufacturing through disruptions to the supply chain and put a brake on the strong economic growth.

There have also been concerns that the trade tensions could dampen business confidence and lead companies to shelve spending and hiring plans. But a $1.5 trillion fiscal stimulus, which helped to power the economy to a 4.1 percent annualized growth pace in the second quarter, is assisting the United States in navigating the stormy trade waters.

The Fed left interest rates unchanged on Wednesday while painting an upbeat portrait of both the labor market and economy. The U.S. central bank said “the labor market has continued to strengthen and economic activity has been rising at a strong rate.” It increased borrowing costs in June for the second time this year.

The moderation in employment gains and steady wage growth could ease concerns about the economy overheating, and keep the Fed on a gradual path of monetary policy tightening.

The Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding the volatile food and energy components, increased 1.9 percent in June. The core PCE hit the central bank’s 2 percent inflation target in March for the first time since December 2011.

Manufacturing payrolls rose by 37,000 jobs last month after increasing by 33,000 in June. Construction companies hired 19,000 more workers after increasing payrolls by 13,000 jobs in June. Retail payrolls rebounded by 7,100 jobs last month after losing 20,200 in June.

Education and health services added 22,000 jobs last month, the fewest since October 2017, after boosting payrolls by 69,000 jobs in June. July’s slowdown in hiring reflected a loss of 10,800 education services jobs.

Transportation payrolls dropped by 1,300 jobs last month, with transit and ground transportation employment declining by 14,800 jobs. Utilities employment fell for a third straight month and the finance and insurance industry shed 9,400 jobs last month.

Government employment fell by 13,000 jobs in July.

(Reporting by Lucia Mutikani; Editing by Jonathan Oatis and Paul Simao)

Author delves into U.S. Social Security’s origins to debunk myths

A sign is seen on the entrance to a Social Security office in New York City, U.S., July 16, 2018. REUTERS/Brendan McDermid

By Mark Miller

CHICAGO (Reuters) – Social Security is unaffordable due to our aging population.

Social Security is a driver of our national debt.

Social Security is built on a house of cards – its assets are just IOUs.

No doubt you have heard some or all of these statements from politicians and pundits debating how to “fix” our most important retirement program. The combined trust funds for the retirement and disability programs will be depleted in 2034, a problem that would require a draconian 23 percent across-the-board benefit cut if left unaddressed. (https://reut.rs/2K8VASy)

But Nancy Altman argues that these claims are not just wrong, but part of a purposeful campaign to undermine and dismantle Social Security that has been underway since the program’s creation in the 1930s.

Altman makes her case in a provocative new book, “The Truth About Social Security: The Founders’ Words Refute Revisionist History, Zombie Lies, and Common Misunderstandings” (Strong Arm Press).

Altman is a well-known progressive advocate for defending and expanding Social Security. She also is an expert on the program’s history, having served as a staff member of the bipartisan 1983 commission that developed the most recent set of important reforms to Social Security. Altman also serves on the Social Security Advisory Board, an independent, bipartisan agency that advises the White House, Congress and Social Security Administration.

Her new book debunks a number of prevalent myths about Social Security, relying on the historical record left by President Franklin Roosevelt and the other founders of the program.

Below is an edited version of my recent interview with Altman, where I asked her to discuss some common misperceptions about Social Security’s origins.

Q: Why is it so important to pay attention to the vision of the founders of Social Security? As you note, the program has always evolved and changed over time.

A: Opponents of Social Security mischaracterize the founders’ vision and then use the mischaracterization as a shield against improvements which the founders, I believe, would have applauded. In response to proposals to expand benefits, for example, opponents argue that the founders never intended Social Security to be more than a foundation on which to build.  So, it is important to set the record straight.

Q: You’re referring to the often-heard comment that Social Security is part of a “three-legged stool” of retirement security. Not true?

A.  It is historically inaccurate. The metaphor of a three-legged stool was first used in 1949 by an insurance executive whose company sold supplemental annuities. There is no evidence whatsoever that Roosevelt and his colleagues intentionally designed Social Security simply to be part of what is needed in retirement. In fact, there is substantial legislative history that the exact opposite was true.

Q: What is the role of Social Security in the federal government’s debt problems?

A: Social Security does not and, by law, cannot add even a penny to the federal deficit. It can only pay benefits if it has sufficient revenue not only to cover all benefit costs but also the administrative costs associated with the payment of those benefits. And it has no borrowing authority to make up any shortfall.

The federal government issues Treasury bonds to finance its own debt, and some of those bonds are purchased by Social Security. Though Treasuries held in reserve by Social Security are sometimes derisively called “IOUs,” they are not casual promises. They are legal arrangements, which have the same legal status as bonds bought by you, me, a foreign government, or any other person or entity that invests in U.S. Treasuries.

Q: We hear often that Social Security is becoming unaffordable because our population is aging so fast. You argue this is incorrect. Why?

A: People are living somewhat longer, on average. It is not the cause of our aging population, however. Rather, it is due to the decline in our fertility rates, and a resulting shift in the ratio of beneficiaries to workers. Social Security is extremely affordable – at the end of the 21st century, Social Security will cost, as a percentage of GDP, around what it costs today. That assumes that life expectancies continue to improve.

Q: Why should Social Security not be means-tested? After all, Warren Buffett and Bill Gates don’t need their Social Security benefits, right?

A: Social Security is a benefit that is earned; it is not based on need. No one would argue that Buffett or Gates should not collect on their fire insurance, if their home burned down, just because they didn’t “need” the proceeds. The same is true with Social Security. No one has to claim their Social Security benefits, but everyone should know that they have earned them.

Q: What should be done to fix Social Security’s financial problems, and should we be doing something beyond that?

A. The only problem that I believe Social Security has is that its benefits are too low. They should be increased. Expanding Social Security and restoring it to balance by requiring the wealthiest to pay their fair share is a solution to a number of challenges. In addition to addressing our looming retirement income crisis, it would slow our rising income and wealth inequality and the decline of our middle class.

(Editing by Matthew Lewis)

Exclusive: North Korean fuel prices drop, suggesting U.N. sanctions being undermined

FILE PHOTO: North Koreans take a truck through a path amongst the fields, along the Yalu River, in Sakchu county, North Phyongan Province, North Korea, June 20, 2015. REUTERS/Jacky Chen/File Photo

By Hyonhee Shin

SEOUL (Reuters) – Gasoline prices in North Korea have nearly halved since late March, market data analyzed by Reuters shows, adding weight to suspicions that fuel is finding its way into the isolated economy from China and elsewhere despite U.N. sanctions.

The United Nations Security Council passed a resolution in December to ban nearly 90 percent of refined petroleum exports to North Korea over its nuclear and missile programs.

But as North Korean leader Kim Jong Un has moved to improve relations with the United States, China and South Korea, concerns have grown that the policy of “maximum pressure” through sanctions and isolation, is losing steam.

Kim and U.S. President Donald Trump agreed to work toward denuclearization at their summit in Singapore on June 12. Experts say any fuel aid in breach of sanctions could erode the diplomatic progress.

China said on Tuesday it strictly abided by U.N. sanctions, but indicated it may have resumed some fuel shipments to North Korea in the second quarter of this year.

Gasoline was sold by private dealers in the North Korean capital Pyongyang at about $1.24 per kg as of Tuesday, down 33 percent from $1.86 per kg on June 5 and 44 percent from this year’s peak of $2.22 per kg on March 27, according to Reuters analysis of data compiled by the Daily NK website. Diesel prices are at $0.85 per kg, down about 17 percent from March.

The website is run by North Korean defectors who collect prices via phone calls with multiple traders in the North after cross-checks to corroborate their information, offering a rare glimpse into the livelihoods of ordinary North Koreans.

In North Korea, gas is sold via informal channels such as street stalls and informal markets and by weight rather than by volume, as it is in South Korea, the United States and elsewhere, so North Koreans prefer to quote “per kg” rates, said Kang Mi-jin, who works at Daily NK. A 200 liter barrel of petrol holds around 180 kg.

U.S. prices stand at around 75 cents per liter or $2.839 per gallon.

“My assessment is that there was a greater inflow (of fuel supplies) from abroad, especially China since Kim’s trips there,” said Kang, who speaks regularly to sources inside North Korea.

Kim first visited China to meet President Xi Jinping in March, and they held two more summits, in May and June.

SANCTIONS

The latest fuel data comes amid mounting suspicion in Washington that North Korea may be using the recent diplomatic thaw to get a lifeline from China.

North Korea gets most of its fuel from China, its biggest trading partner, and some from Russia. Washington and Seoul officials have said the North imports some 4.5 million barrels of refined petroleum products and 2 million barrels of crude oil each year.

Last year’s U.N. resolution capped refined imports at 500,000 barrels a year.

Chinese Foreign Ministry spokesman Geng Shuang told reporters on Tuesday that China has consistently and strictly abided by U.N. Security Council resolutions on North Korea.

China had exported 7,432 tonnes of refined oil products to North Korea in the first six months of this year, out of a total of 60,000 tonnes a year stipulated by the U.N. sanctions.

China had reported its exports to the Security Council’s sanctions committee in a timely manner, Geng added.

“The relevant situation is totally open and transparent,” he said, without elaborating.

Since official Chinese customs data showed no gasoline and diesel exports to North Korea from January to March, Geng’s comments suggested China resumed some shipments some time after Kim and Xi’s first meeting.

Overall, China’s trade with North Korea in the first half of this year tumbled 56 percent on the back of the tightening sanctions, customs data showed on Monday.

Last week, U.S. Secretary of State Mike Pompeo accused North Korea of “illegally smuggling petroleum products into the country at a level that far exceeds quotas” established by the UN.

“Illegal ship-to-ship transfers are the most prominent means by which this is happening. Every UN member state must step up enforcement,” he wrote on Twitter, without naming any country.

China and Russia delayed a U.S. push last week for a UN Security Council panel to order a halt to refined petroleum exports to North Korea, asking for more detail on a U.S. accusation that Pyongyang breached sanctions, diplomats said.

The United States provided a list to the committee earlier this month of 89 illicit North Korean transactions and a few select photos, seen by Reuters.

Seoul’s foreign ministry said last week that the authorities were investigating two ships with Panama and Sierra Leone flags suspected to have illegally transferred North Korean coal into South Korea via Russia.

NO MAJOR SUFFERING

North Korean rice prices have also been stable since a spike last September, when the UN Security Council imposed new sanctions. Rice has hovered around $0.62 per kg throughout this year.

Stable fuel and rice prices suggest no immediate signs of major suffering in North Korea despite South Korea’s recent estimates the impoverished state’s economy contracted at its sharpest rate in two decades last year.

South Korea’s central bank said North Korea’s gross domestic product shrank 3.5 percent last year, marking the biggest decline since 1997, citing international sanctions and drought.

While other defectors reported some suffering in remote rural regions, Daily NK’s Kang said fuel demand has been steady in North Korea, and overall living conditions have improved in line with a booming unofficial market economy.

The unofficial markets, known as jangmadang, have grown to account for about 60 percent of the economy, according to the Institute for Korean Integration of Society.

“I’ve seen signs the economy was slowly improving over the past five years, and in last year things are still developing but perhaps not as fast as before,” a Western consultant who makes regular trips to North Korea told Reuters.

Kim, who vowed not to let the people “tighten their belt again” in his first-ever public speech in 2012, announced in April a shift in focus from nuclear programs to the economy. Analysts say that will be difficult while sanctions remain in place.

“I don’t think there is an outcry in the markets now, but there could be one toward the end of this year,” said Kim Byeong-yeon, a North Korea economy specialist at the Seoul National University.

(Reporting by Hyonhee Shin. Additional reporting by Josh Smith and Cynthia Kim in SEOUL and Ben Blanchard in BEIJING. Editing by Lincoln Feast.)

U.S. weekly jobless claims hit more than 48-and-a-half-year low

FILE PHOTO: Job seekers and recruiters gather at TechFair in Los Angeles, California, U.S. March 8, 2018. REUTERS/Monica Almeida

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits dropped to a more than 48-1/2-year low last week as the labor market strengthens further, but trade tensions are casting a shadow over the economy’s outlook.

Other data on Thursday showed manufacturing activity in the mid-Atlantic region accelerated in July amid a surge in orders received by factories. But the Philadelphia Federal Reserve survey also showed manufacturers paying more for inputs and less upbeat about business conditions over the next six months.

Fewer manufacturers planned to increase capital spending, suggesting trade tensions, marked by tit-for-tat import tariffs between the United States and its trade partners, including China, Canada, Mexico and the European Union, could be starting to hurt business sentiment.

The survey came on the heels of the Federal Reserve’s Beige Book report on Wednesday, showing manufacturers in all districts worried about the tariffs and reporting higher prices and supply disruptions, which they blamed on the new trade policies.

“Yesterday’s Beige Book and the recent decline in the investment intentions balance in the Philly Fed survey show that escalating trade tensions are starting to have a material impact on companies’ confidence about the future,” said Brian Coulton, chief economist at ratings agency Fitch.

Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 207,000 for the week ended July 14, the lowest reading since early December 1969, the Labor Department said. Economists polled by Reuters had forecast claims rising to 220,000 in the latest week.

The second straight weekly decline in claims, however, likely reflects difficulties adjusting the data for seasonal fluctuations around this time of the year when motor vehicle manufacturers shut assembly lines for annual retooling.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,750 to 220,500 last week.

The dollar firmed against a basket of currencies. Stocks on Wall Street were lower, while prices for U.S. Treasuries rose.

WORKER SHORTAGE

The claims data covered the survey week for the nonfarm payrolls component of July’s employment report. The four-week average of claims dipped 500 between the June and July survey periods, suggesting solid job growth this month.

The economy created 213,000 jobs in June, with the unemployment rate rising two-tenths of a percentage point to 4.0 percent as more Americans entered the labor force, in a sign of confidence in their job prospects.

Federal Reserve Chairman Jerome Powell told lawmakers this week that with appropriate monetary policy, the job market will remain strong “over the next several years.”

The labor market is viewed as being near or at full employment. There were 6.6 million unfilled jobs in May, an indication that companies cannot find qualified workers.

That was reinforced by the Beige Book, which showed worker shortages persisting in early July across a wide range of occupations, including highly skilled engineers, specialized construction and manufacturing workers, information technology professionals and truck drivers.

Thursday’s survey from the Philadelphia Fed showed its business conditions index jumped to a reading of 25.7 in July from 19.9 in June. The survey’s measure of new orders increased to 31.4 from a reading of 17.9 in June.

But its gauge of factory employment fell as did the average workweek. Manufacturers also continued to report higher prices for both purchased inputs and their own manufactured goods. The survey’s prices paid index soared to 62.9 this month, the highest level since June 2008, from 51.8 in June.

The index has risen 30 points since January. Sixty-three percent of manufacturers in the region reported paying more for inputs this month compared with 54 percent in June.

The price increases are likely related to tariffs on steel and aluminum imports, which were imposed by the Trump administration to protect domestic industries from what it says is unfair foreign competition.

Wednesday’s Beige Book mentioned a machinery manufacturer in the Philadelphia area who described the effects of the steel tariffs as “chaotic to its supply chain, disrupting planned orders, increasing prices, and prompting some panic buying.”

The Philadelphia survey’s index for future activity decreased for the fourth straight month. Capital spending plans over the next six months also fell as did intentions to hire more factory workers.

“Further escalation could create worse conditions and this remains a downside risk to the otherwise positive outlook over the next year,” said Adam Ozimek, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Fed’s Powell: ‘Several years’ of strong jobs, low inflation still ahead

Federal Reserve Chairman Jerome Powell gives his semiannual testimony on the economy and monetary policy before the Senate Banking Committee in Washington July 17, 2018. REUTERS/James Lawler Duggan

By Howard Schneider

WASHINGTON (Reuters) – U.S. Federal Reserve Chairman Jerome Powell, discounting the risk that a trade war may throw a global recovery off track, said the economy is on the cusp of “several years” where the job market remains strong and inflation stays around the Fed’s 2 percent target.

In written testimony delivered to the Senate Banking Committee on Tuesday, the Fed chair signaled not just that he believes the economy is doing well, but that an era of stable growth may continue provided the Fed gets its policy decisions right.

“With appropriate monetary policy, the job market will remain strong and inflation will stay near 2 percent over the next several years,” Powell said in one of the strongest affirmations yet that the Fed is within reach of its dual policy targets more than a decade after the United States endured a deep financial crisis and recession.

The Fed “believes that – for now – the best way forward is to keep gradually raising the federal funds rate” in a way that keeps pace with a strengthening economy but does not raise rates so high or so fast that it weakens growth, Powell said.

Stock and bond markets were largely flat as Powell began his testimony, and analysts said there was little of surprise in the initial message.

“His takeaway was the job market is strong, inflation is going to stay near 2 percent. To me that means two more hikes this year,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

Powell did not address his individual views on the appropriate pace of tightening or whether he thinks, as some of his colleagues have argued, that the Fed should pause its rate hike cycle sometime next year if inflation remains under control. But markets expect the central bank to raise rates two more times this year from the current target level of between 1.75 and 2 percent.

Powell took questions from Senators after presenting his written statement to them, and will appear before a House committee on Wednesday.

Powell and other Fed officials have in recent remarks pointedly declined to declare “victory” in their effort to hit the 2 percent inflation target, though most have acknowledged that, with joblessness at 4 percent, their employment goal has been reached.

But the Fed’s preferred measure of inflation hit 2.3 percent in May, and was right at 2 percent after excluding more volatile food and energy prices.

Inflation is “close” to the Fed’s target and “the recent data are encouraging,” Powell said as he laid out the reasons why he felt the United States’ near decade-long expansion was set to continue.

Still-low interest rates, a stable financial system, ongoing global growth and the boost from recent tax cuts and increased federal spending “continue to support the expansion” Powell said.

After a solid start to the year, growth appears to have accelerated as “robust job gains, rising after-tax incomes, and optimism among households have lifted consumer spending in recent months. Investment by businesses has continued to grow at a healthy rate,” Powell said.

Powell did nod to the uncertainty surrounding the Trump administration’s trade policies, which organizations like the International Monetary Fund have warned could curb global growth if ongoing rounds of U.S. tariffs and retaliation by other countries raise prices, lower demand, and disrupt global business supply chains.

But “it is difficult to predict the ultimate outcome of current discussions over trade policy,” he said. Overall the risks to the economy were “roughly balanced,” with the “most likely path for the economy” one of continued job gains, moderate inflation, and steady growth.

(Reporting by Howard Schneider; Additional reporting by Shruthi Shankar; Editing by Andrea Ricci)

Wall Street enters third day of gains as trade fears ease

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 6, 2018. REUTERS/Brendan McDermid

By Sruthi Shankar

(Reuters) – U.S. stocks rose on Monday, with bank stocks leading third day of gains in a row after strong U.S. jobs data from last week helped investors brush aside trade concerns.

The S&P financial index rose 1.3 percent, providing the biggest boost to the main S&P index. But gains were widespread, with technology, energy, industrials, consumer discretionary and healthcare stocks rising.

The United States and China engaged in tit-for-tat tariffs on Friday, both countries imposing duties worth $34 billion on each others’ goods. But the benchmark S&P 500 closed up 0.84 percent on Friday as many analysts said the move was already priced in, but warned that further escalation could dent the appetite for stocks.

China’s securities regulator said on Sunday it plans to ease restrictions on foreign investment in stocks listed on the Shanghai or Shenzhen exchanges to attract more foreign capital and support the economy.

The sentiment was largely upbeat after Friday’s U.S. payrolls report showed tame wages and more people looking for work, boosting optimism that the Federal Reserve would stay on a path of gradual interest rate increases.

“Last Friday’s gains managed to put a positive patina on what was otherwise a rather unimpressive week for equity investors,” Peter Kenney, senior market strategist at Global Markets Advisory Group in New York, wrote in a note.

“That tone could serve investors well this week as we launch into Q2 earnings season.”

At 9:49 a.m. ET the Dow Jones Industrial Average was up 193.11 points, or 0.79 percent, at 24,649.59, the S&P 500 was up 15.33 points, or 0.56 percent, at 2,775.15 and the Nasdaq Composite was up 46.97 points, or 0.61 percent, at 7,735.36.

All eyes will turn to second-quarter earnings reports, with banks JPMorgan, Wells Fargo and Citigroup scheduled to report on Friday.

S&P 500 companies are expected to report 21 percent growth in earnings per share for the June quarter, according to Thomson Reuters I/B/E/S. But focus will be on any warnings companies might give about the impact of trade tariffs.

U.S.-listed shares of Chinese companies Alibaba, JD.com and Baidu climbed after KeyBanc recommendations on the stocks.

Tesla was up 1.6 percent after automotive news website Electrek reported the company hiked prices of its Model X and S cars by over $20,000 in China due to tariffs.

Groupon jumped 8.8 percent after a Recode report that the daily deals website operator was looking for a buyer.

Advancing issues outnumbered decliners for a 2.53-to-1 ratio on the NYSE and a 2.16-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and no new lows, while the Nasdaq recorded 97 new highs and six new lows.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

Mexican leftist’s adviser seeks to calm nerves before vote

FILE PHOTO: Mexico's presidential front-runner Andres Manuel Lopez Obrador of the National Regeneration Movement (MORENA) addresses supporters in Oaxaca, Mexico June 16, 2018. REUTERS/Jorge Luis Plata

By Dave Graham

MEXICO CITY (Reuters) – Leading presidential candidate Andres Manuel Lopez Obrador would seek to increase investor confidence in Mexico to strengthen the peso and could hold auctions of oil rights, a top adviser said on Monday, striking a moderate tone days before the election.

Leftist Lopez Obrador is leading ahead of Sunday’s vote and Alfonso Romo, his top business adviser, told reporters a Lopez Obrador government will do everything it can – short of intervention – to help the peso.

Romo, Lopez Obrador’s nominee for chief of staff, said his government would seek to strengthen the rule of law and create business conditions that would give investors confidence in order to support the Mexican currency.

He echoed other advisers, saying Lopez Obrador would respect the independence of the central bank.

Mexico’s peso sank to a 1-1/2 year low this month, hit by a broad dollar rally, a deadlock in talks to rework the NAFTA trade deal and nervousness ahead of the election.

Lopez Obrador, 64, is an anti-system third-time presidential candidate who promises to clean up corruption. Some of his proposals, such as suspending oil auctions, have unnerved investors.

The former Mexico City mayor holds a commanding double-digit lead in all major opinion polls, although one survey on Monday showed his lead narrowing slightly, to 12 points.

Romo sought to calm any jitters on Monday, saying there could be more auctions of oil drilling rights as long as a review of contracts that have already been awarded to private companies showed no problems.

“We will revise them and everything good will remain,” he said, noting Lopez Obrador had taken the same message to investors in New York.

Romo said such a review should be finished quickly, ideally by October, during the transition period before Mexico’s next president takes office in December.

Romo said he felt “at ease” with what he had reviewed so far regarding the landmark energy opening under current President Enrique Pena Nieto.

(Reporting by Dave Graham; Writing by Michael O’Boyle; Editing by Frank Jack Daniel and Dan Grebler)

Companies need older workers: here is why

FILE PHOTO: Office workers take their lunch at a food court in Sydney, Australia May 4, 2018. REUTERS/Edgar Su/File Photo

By Mark Miller

CHICAGO (Reuters) – The demographic trend is no secret: the populations of the United States and other major industrial countries are getting older, and fast. That means workforces are aging too, but employers are doing surprisingly little to prepare to meet the challenges or adapt to employees’ needs.

In the United States, the 65-and-over population will nearly double over the next three decades to 88 million by 2050 from 48 million, according to the U.S. Census Bureau.

By 2024, one in four U.S. workers will be 55 or older, according to the U.S. Department of Labor, more than double the rate in 1994 when 55-plus workers accounted for just 12 percent of the workforce.

Many workers will face a financial need to keep working past traditional retirement ages, while others will want to work in order to stay engaged, notes Jonathan Rauch, a senior fellow at the Brookings Institute and author of “The Happiness Curve: Why Life Gets Better After 50.”

“People are getting to their sixties with another 15 years of productive life ahead, and this is turning out to be the most emotionally-rewarding part of life,” Rauch said. “They don’t want to just hang it up and just play golf. That model is wrong.”

A survey of human resource professionals by the Society for Human Resource Management in 2016 revealed a short-term mindset along with a lack of urgency among employers in assessing and planning for aging workforce.

Just 35 percent of U.S. companies have analyzed the near-term impact of the departure of older workers and just 17 percent have considered longer-term impactions over the next decade, according to the survey.

Most employers do not have a process for assessing the impact beyond one or two years, and the majority said they do not actively recruit older workers at all.

Alex Alonso, senior vice president of knowledge development at Society for Human Resource Management, thinks employers have sharpened their focus in this area since the survey was conducted.

“In most boardrooms, there is urgency around the topic these days, but the conversation is around how to sustain the enterprise, with a focus on how to manage a multi-generational workforce,” Alonso said.

Age discrimination, while difficult to prove, persists. Yet research over the past decade has gone a long way toward debunking stereotypes about older workers – that they are less productive and energetic, and less able to learn or solve problems.

But the bias continues.

Forty-one percent of companies around the world surveyed by Deloitte Consulting said they considered aging of their workforces a competitive disadvantage. The finding varied by country.

“It’s somewhat of a cultural issue,” said Josh Bersin, a principal at the consulting firm.

Employers such as Deloitte Consulting are starting to wake up to the issues as the labor market tightens, Bersin said. “I spend a lot of time with human resource departments around the world, and they are starting to realize that one of best talent pools they can recruit from are the people they already have.”

ALTERNATIVE CAREER ROUTES

Leading-edge employers are starting to think about creating alternative career routes for older workers that feature more flexible assignments and schedules, creating opportunities for them to mentor younger workers and offering phased retirement.

Deloitte, for example, now has a new set of professional career paths available for employees who are not on the track to become partners but have important specialized knowledge.

Among major manufacturers, automaker BMW is often cited as an innovator in valuing the skills and experience of older workers. The company has implemented changes to its production lines aimed at improving ergonomics of its work environment and promoting age-neutral language in the workplace.

The Columbia Aging Center at the Mailman School of Public Health in New York City has been honoring “age smart” employers for the past three years. Winning companies actively recruit and promote older workers, provide flexible work schedules and mentorship opportunities.

For example, one company honored this year, accounting firm PKF O’Connor Davies, actively hires older accountants when other firms compel them to retire. Of the firm’s 700 workers, more than 250 are over age 50. The firm offers flexible work options, including shorter work weeks.

“We’re definitely seeing growing concern about the drain of human capital among larger companies, and interest in new models for older workers that retain them longer,” said Linda Fried, dean of the Mailman School and head of the school’s Aging Center.

Fried acknowledges that some employers worry about the higher compensation and healthcare costs associated with older workers. She has proposed changing Medicare’s rules to accept older workers, allowing them to shift away from employer health plans. Other researchers have proposed incentivizing employers by creating a 40-year cap on the total years of work requiring payroll tax contributions to Social Security.

Changing attitudes also will be important.

“There is a lot more talk in business circles about the human capital value of older workers, but we’re still in early innings,” said Paul Irving, chairman of the Center for the Future of Aging at the Milken Institute. “It takes time for things to percolate.”

(Reporting by Mark Miller; Editing by Lauren Young and Matthew Lewis)

Vice President Pence to visit Guatemala volcano victims: White House

Rescue workers continue to search for human remains, after the eruption of the Fuego volcano, in San Miguel Los Lotes in Escuintla, Guatemala June 14, 2018. REUTERS/Luis Echeverria

By Roberta Rampton

WASHINGTON (Reuters) – U.S. Vice President Mike Pence plans to visit volcano victims in Guatemala as part of a three-nation trip at the end of the month aimed at building Latin American ties and pressuring Venezuela, a White House official said on Thursday.

Pence is scheduled to head to Brasilia during the last week of June, followed by a stop in the northern Amazonian city of Manaus, which is grappling with refugees who have fled Venezuela’s economic crisis, the official said.

Rescue workers continue to search for human remains, after the eruption of the Fuego volcano, in San Miguel Los Lotes in Escuintla, Guatemala June 14, 2018. REUTERS/Luis Echeverria

Rescue workers continue to search for human remains, after the eruption of the Fuego volcano, in San Miguel Los Lotes in Escuintla, Guatemala June 14, 2018. REUTERS/Luis Echeverria

Pence has led the U.S. diplomatic push to pressure Venezuelan President Nicolas Maduro, the socialist leader who the Trump administration blames for the deep recession and hyperinflation that have caused shortages of food and medicine in the once oil-rich

nation.

Washington has stepped up economic sanctions against individuals connected to Maduro and refused to recognize his re-election in a May 20 vote. Both countries have expelled each others’ diplomats.

Trump has considered more sanctions on services related to oil shipments from the OPEC member nation, but so far has not opted to act on those.

U.S. Vice President Mike Pence speaks before President Donald Trump during a rally with supporters at North Side middle school in Elkhart, Indiana, U.S., May 10, 2018. REUTERS/Leah Millis

U.S. Vice President Mike Pence speaks before President Donald Trump during a rally with supporters at North Side middle school in Elkhart, Indiana, U.S., May 10, 2018. REUTERS/Leah Millis

During the past year, Pence has visited leaders in Colombia, Argentina, Chile, Panama and Peru. At the end of June, he will also visit Quito, Ecuador, before stopping in Guatemala.

At least 109 people were killed by a massive eruption of Guatemala’s Fuego volcano on June 3 that buried villagers in scalding ash and left nearly 200 missing.

(Reporting by Roberta Rampton; Writing by Eric Walsh; Editing by Doina Chiacu and Bill Berkrot)

U.S. weekly jobless claims unexpectedly fall

WASHINGTON (Reuters) – New applications for U.S. unemployment benefits unexpectedly fell last week and the number of Americans on jobless rolls declined to a near 44-1/2-year low, pointing to a rapidly tightening labor market.

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 218,000 for the week ended June 9, the Labor Department said on Thursday. Claims data for the prior week was unrevised.

Economists polled by Reuters had forecast claims rising to 224,000 in the latest week. The Labor Department said claims for Maine and Hawaii were estimated last week.

The four-week moving average of initial claims, viewed as a better measure of labor market trends as it irons out week-to-week volatility, fell 1,250 to 224,250 last week.

The labor market is considered to be close to or at full employment, with the jobless rate at an 18-year low of 3.8 percent. The unemployment rate has dropped by three-tenths of a percentage point this year. It is near the Federal Reserve’s forecast of 3.6 percent by the end of this year.

The U.S. central bank on Wednesday raised interest rates for a second time this year and projected two more rate hikes in the second half of 2018. It said the labor market “continued to strengthen” and that job gains have been “strong.”

Layoffs have remained very low amid signs of growing worker shortages across all sectors of the economy. The were a record 6.7 million job openings in April. The number of unemployed people per vacancy slipped to 0.9 from 1.0 in March, indicating that most people looking for a job are likely to find one.

The claims report also showed the number of people receiving benefits after an initial week of aid declined 49,000 to 1.70 million in the week ended June 2, the lowest level since December 1973. The four-week moving average of the so-called continuing claims decreased 3,750 to 1.73 million, also the lowest level since December 1973.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)