Unemployment

Venezuelan refugee crisis adds to Colombia’s growing challenges
Unemployment

Venezuelan refugee crisis adds to Colombia’s growing challenges

Colombia was already dealing with corruption scandals, record cocaine production, proposed cuts in American aid, oil headaches and a costly peace agreement to end a 50-year civil war. “It’s certainly not the star that it was four or five years ago,” says Richard Francis, director of Latin America sovereign debt at Fitch Ratings.
More than half a million Venezuelans were living in Colombia last year, up 62% from the year before. “You have Venezuelans living in parks because they can’t find a place to live.
This will only get worse, and it will have a financial impact for the Colombian government.” “Colombia had not been a host country to great numbers of migrants and refugees, and they are receiving numbers of people that would pose a challenge to any country.” “It’s easier to do business in Venezuela’s oil sector than in Colombia’s oil sector,” Gallegos says.
Other problems have bogged down the economy.
Experts say it has delayed or halted some public infrastructure projects.
Its economy also didn’t collapse with oil prices and corruption scandals like Brazil, which suffered through its longest recession.

The Brexit economy: things are starting to deteriorate
Unemployment

The Brexit economy: things are starting to deteriorate

Fresh figures this week also showed the economy grew more slowly than first thought in the final three months of 2017, with GDP growth having been revised down to 0.4% from 0.5% – putting the UK at the bottom of the G7 league table.
Over the past month, the world economy has been rattled by panic in the financial markets, triggered by fears over rising inflation in the US from better-than-expected wage growth.
The number of people out of work increased for the first time in almost two years, pay growth remains below the rate of inflation, and consumer spending staged a limp rebound after a torrid Christmas.
But despite signs of weakness, the Bank of England is moving closer to raising interest rates from as early as May, arguing last week that the growth rate for the economy has been lowered by the Brexit vote – pushing it to raise the cost of borrowing to tackle stubbornly high inflation.
The Bank’s governor, Mark Carney, also said the leave result had made people poorer.
Writing in the Guardian, David Blanchflower, professor of economics at Dartmouth College and a former MPC member, said the jobs market “turning down” was a sign for Threadneedle Street to put its plans on ice.
A week is a long time in economics,” he said.
Stoked by the pound’s weakness since the EU referendum, the rate of growth in prices has been stubbornly high for several months now – although wages are at last beginning to rise.
The global economy helped drag Britain up by the bootstraps at the end of last year, benefiting export-facing businesses who could exploit the weak pound to sell goods and services abroad.
However, pay growth is still lagging behind inflation – damaging consumer spending.

Pound Decline Deepens as U.K. Jobless Rate Unexpectedly Climbs
Unemployment

Pound Decline Deepens as U.K. Jobless Rate Unexpectedly Climbs

Sterling extends losses against the dollar to a fourth day Focus turns to Carney testimony in Parliament later Wednesday The pound extended declines versus the dollar, taking a four-day slide to more than 1 percent, after a U.K. statistics office report showed that the nation’s jobless rate unexpectedly climbed.
Sterling weakened against most Group-of-10 peers as data showed the ILO unemployment rate rose to 4.4 percent in the three months through December, exceeding the 4.3 percent median forecast in a Bloomberg survey.
“The news flow on the transition deal drives sterling much more than key figures right now,” said Andreas Steno Larsen, a currency strategist at Nordea Markets.
The pound fell as the jobs report was “on the weak side.
There were still downside risks to the current pricing of central bank rate-increase probability, which “leaves sterling relatively vulnerable, despite the outlook of a potential rate hike in May,” said Steno Larsen.
The pound was 0.4 percent weaker at $1.3939 as of 10:33 a.m. in London, having earlier dropped to as low as $1.3928.
Against the euro, sterling weakened 0.3 percent to 88.37 pence.
U.K. government bonds advanced for the second day, with 10-year yields falling four basis points to 1.54 percent.
Market focus will turn later in the day to BOE Governor Mark Carney, who will testify to Parliament’s Treasury Committee alongside other policy makers starting 2:15 p.m. in London.
Should he maintain a hawkish bias, that will probably support expectations for an increase in borrowing costs by May.

Japan’s central bank chooses continuity over tradition
Unemployment

Japan’s central bank chooses continuity over tradition

GOVERNORS of the Bank of Japan (BoJ) tend not to linger long in their post.
The last time a BoJ governor won a second term was 1961, when Japan’s economy was growing by over 11% and inflation was over 5%.
This tradition will be broken by the reappointment of Haruhiko Kuroda, who was nominated for a second term on February 16th.
If he completes it, he will become the longest-serving governor in the BoJ’s history.
Mr Kuroda hopes that low unemployment will eventually force firms to raise wages and prices, which will in turn raise expectations of inflation in the future, reinforcing its momentum.
The central bank’s monetary easing failed to prevent a sharp drop in demand, partly because Japan’s private sector proved surprisingly willing to hold, rather than spend, the extra money Mr Kuroda created.
Mr Kuroda also worries that his policy of negative interest rates, announced in January 2016, may eventually turn counterproductive.
The cut in rates raised the value of long-term assets held by Japan’s banks, improving their balance-sheets.
Since banks have not been able to pass on negative rates in full to their depositors, their funding costs have fallen less than their loan rates.
Many think Mr Amamiya could eventually succeed Mr Kuroda as governor.

First, fire the croniesTo fix South Africa, Cyril Ramaphosa should be bold
Unemployment

First, fire the croniesTo fix South Africa, Cyril Ramaphosa should be bold

Public debt is soaring: the budget released on February 21st expects it to rise to 56% of GDP by 2023, up from 26% in 2009 when Mr Zuma took over.
Economic growth slumped from an average of 5% in the five pre-Zuma years to 1.5% on his watch, barely keeping up with the rise in population.
He should start by hiring good people.
That would be a huge change.
He only narrowly defeated Mr Zuma’s supporters within the ruling African National Congress (ANC).
Mr Ramaphosa cannot begin to reform South Africa without honest and capable public servants running the state and its companies.
Now, when voters have such high hopes, is the time to act.
First, Mr Ramaphosa should put good people in charge of the national finances and the criminal-justice system.
There are plenty of fine administrators in South Africa who would be happy to work for Mr Ramaphosa (and there is no reason why he should not hire foreigners for some jobs).
If malefactors in high places are dealt with firmly and impartially, that will deter others and signal to investors that the rule of law still applies in South Africa.

Setting a new courseWhy South Korea is growing wary of China
Unemployment

Setting a new courseWhy South Korea is growing wary of China

To the north, on the left bank of the Tae-Hwa river, stands Hyundai’s vast carworks and a shimmering shoal of new vehicles.
These days, the people of Ulsan wonder whether they, too, will soon be crying.
Just as South Korean competition sent much of European shipbuilding into bankruptcy, China is now threatening to do much the same to South Korea’s industry.
The agony of the shipyards, the country’s biggest exporters after its semiconductor and car industries, feeds South Korea’s disquiet about China.
At Hyundai Heavy Industries, the largest South Korean shipbuilder, officials note that orders are down from the usual 60-80 vessels and rigs a year to about 20 in 2016.
“Container ships used to be our main work,” notes a spokesman.
“This year we have barely any orders for them.” Hyundai was stunned in August when it lost a French tender to build nine ultra-large container vessels, each carrying more than 20,000 standard 20-foot containers, to Chinese rivals.
Car exports to China were in decline even before the boycott as the quality of Chinese cars improved and South Korean brands failed to match the appeal of Japanese and European ones.
He has demanded a renegotiation of America’s free-trade deal with South Korea.
South Korea worries even more about Mr Trump’s belligerence towards North Korea and his talk of pre-emptive military strikes to destroy its nuclear weapons.

U.S. jobless claims drop 7,000 to 222,000, reclaim 45-year low
Unemployment

U.S. jobless claims drop 7,000 to 222,000, reclaim 45-year low

The numbers: Initial U.S. jobless claims fell by 7,000 to 222,000 in the seven days ended Feb. 17, marking the second lowest level since the end of the 2007-2009 recession.
Economists surveyed by MarketWatch had forecast claims to total 230,000.
The more stable monthly average of claims declined by 2,250 to 226,000, the government said Thursday.
The number of people already collecting unemployment benefits, known as continuing claims, dropped by 73,000 to 1.88 million.
Most firms continue to hire and the unemployment rate is at a 17-year low.
Big picture: For workers times are great.
For companies not so much.
In some cases, they are raising wages or offering better benefits to attract or retain employees.
The Federal Reserve is watching closely to see if the tightest labor market in almost two decades lead to a broad increase in worker pay and boosts U.S. inflation.
The central bank would likely raise rates more aggressively if that took place.

Trump’s State of the Union: A deep dive into the stats
Unemployment

Trump’s State of the Union: A deep dive into the stats

More people are dying of drug overdoses.
As of Monday’s close, the Dow Jones Industrial Average is up 45 percent since Trump was elected and 34 percent since he took office.
Early statistics released by the FBI last week show declines in some violent crimes and increases in one category for the first six months of 2017, compared with the same period in 2016.
The unemployment rate was 4.8 percent in January 2017, the month Trump was sworn into office, according to the federal Bureau of Labor Statistics.
The economy added slightly more than 2 million jobs in Trump’s first year, a figure that is close to the 2.2 million jobs created during Obama’s final year in office.
In Trump’s first year in office, the national debt grew by $546.4 billion.
Within days of taking office in 2017, Trump pulled the U.S. out of a sweeping trade pact with 11 Pacific Rim nations.
That’s 11.6 percent higher than the $460.2 billion deficit recorded for the same period in 2016, the final year of Obama’s term.
The deficit in goods with China was $116.7 billion for the first 11 months of 2017, up 12.3 percent from the same period in 2016.
Drug overdose deaths have continued to climb.

Americans Applying For Unemployment Benefits Hits 45-Year Low
Unemployment

Americans Applying For Unemployment Benefits Hits 45-Year Low

Americans filing for unemployment benefits fell precipitously in the last week, dropping to the lowest level in 45 years.
The number of unemployment benefits claims fell by 9,000 to a seasonally adjusted 221,000 for the week ending Feb. 3, the U.S. Department of Labor reported Thursday.
The four-week jobless claims average was 224,500, down 10,000 from previous week’s unrevised average.
The U.S. economy grew at a 3.2 percent annual rate in the third quarter of 2017, posting the best back-to-back quarterly growth rates in three years.
Fourth quarter growth rates fell slightly to 2.8 percent.
This 5.4 percent growth would be the highest growth rate since the third quarter of 2003.
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Trump’s economy: The state of growth, jobs and stocks
Unemployment

Trump’s economy: The state of growth, jobs and stocks

Former Virginia Gov.
From economic growth and job creation, to the surging stock market, business has boomed in America over the past year; spurred in large part by expectations – and the resulting fulfillment – of a longstanding promise to overhaul the U.S. tax code.
Here’s a look at what has changed since the president was inaugurated one year ago: Economic growth On Friday, the U.S. Commerce Department said the economy grew at a rate of 2.6% in the fourth quarter of 2017, slightly below economists’ expectations of 3%.
For the year, the economy expanded at a rate of 2.3%, compared with 1.5% in 2016.
The Trump administration hopes its economic policies will fuel 4% economic growth in the coming years, once the full effects of its tax reform bill have been realized.
Job creation Another big promise the administration made to Americans was to spur job creation in the country.
In 2017, about 2.1 million new jobs were added to the economy, according to government statistics.
Sector-wise, the trends were quite different between 2016 and 2017.
During Trump’s first year in office, the Dow had its best year on record under a Republican president.
The day following Trump’s first address to the country last year, the S&P 500 surged 1.5%.