US economy adds 146K jobs

Updated 07 December 2012
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US economy adds 146K jobs

WASHINGTON: The US economy added 146,000 jobs in November and the jobless rate fell to 7.7 percent, the lowest since December 2008. The drop, however, was largely due to the fact that more Americans stopped looking for work and weren't counted as unemployed.
The Labor Department's report yesterday offered a mixed picture of the economy.
Hiring remained steady during the Superstorm Sandy and in the face of looming tax increases. But the government said employers added 49,000 fewer jobs in October and September than it initially estimated.
And the unemployment rate fell to a four-year low in November from 7.9 percent in October, reflecting a continued exodus of workers from the labor force.
The report "is something of a mixed bag but, on balance, it's a positive," said Paul Ashworth, an economist at Capital Economics.
Sandy's effect on the figures was much smaller many analysts had predicted. The government noted that as long as employees worked at least one day during a pay period — two weeks for most people — its survey would have counted them as employed.
Still, there were signs that the storm disrupted economic activity. Construction employment dropped 20,000. And weather prevented 369,000 people from getting to work — the most for any month in nearly two years. These workers were still counted as employed.
Stock futures jumped after the report. Dow Jones Industrial Average futures were down 20 points in the minutes before the report came out at 8:30 a.m., and just afterward were up 70 points.
As money shifted into stocks, it moved out of safer bonds. The yield on the benchmark 10-year US Treasury note, which moves opposite the price, rose to 1.63 percent from 1.58 percent just before the report was released.

Since July, the economy has added an average of 158,000 jobs a month. That's a modest pickup from 146,000 average in the first six months of the year.
The job growth suggests that most employers aren't yet delaying hiring because of the "fiscal cliff." That's the combination of sharp tax increases and spending cuts set to take effect next year unless the White House and Congress reach a budget deal before then.
There is "no obvious impact from the looming fiscal cliff yet," Ashworth added, "but it could still have a greater effect on December's figures."
Last month, retailers added 53,000 positions. Temporary help companies added 18,000 and education and health care also gained 18,000.
Auto manufacturers added nearly 10,000 jobs.
Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that likely reflects the layoff of workers at Hostess.
Sandy forced restaurants, retailers and other businesses to close in late October and early November in 24 states, particularly in the Northeast.
The US grew at a solid 2.7 percent annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5 percent rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff. That's not enough growth to lower the unemployment rate.
The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October and work interruptions caused by Sandy reduced wages and salaries that month by about $ 18 billion at an annual rate, the government said.
Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the Northeast after the storm.


World Bank shareholders approve $13 billion capital increase

Updated 22 April 2018
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World Bank shareholders approve $13 billion capital increase

  • Capital increase follows three years of negotiations
  • Increase of $7.5 billion for main institution and $5.5 billion for IFC

World Bank shareholders approved a “historic” increase in the bank’s lending capacity late on Saturday after the United States backed a reform package that curbs loans and charges more for higher income countries like China.
World Bank President Jim Yong Kim said neither China nor any middle income countries was happy about the prospect of paying more for loans, but they agreed because of the overall increase in funds available.
The agreement, which also increase shares and voting power to large emerging market countries like China, was “a tremendous vote of confidence” in the institution that came after three years of tough negotiations, Kim said.
“World Bank Group bureaucrats don’t often jump around and high-five and hug each other,” Kim told a small group of reporters following the Spring meeting.
He said the increase was needed because even with the end of the global financial crisis, the bank has been called on to provide funding to address a new series of challenges facing poor countries, like climate change, refugees, pandemics, “all new things for us.”
The increase provides an additional $13 billion in “paid in” capital: $7.5 billion to the main institution and $5.5 billion to the bank’s private financing arm, the International Finance Corporation.
Kim said the increase will allow the bank to ramp up lending to an average of $100 billion a year through 2030, from $60 billion in 2017 and an expected $80 billion in 2018.
Countries will have five years to provide the funds, but can ask for a three-year extension. The last increase occurred in 2010 and added $5 billion to the bank’s capital and $200 million for the IFC.
The United States, the institution’s biggest shareholder, rejected the World Bank request in October and the administration of US President Donald Trump has argued that multilateral lending institutions should graduate countries that have grown enough to finance their own development, like China.
But US Treasury Secretary Steven Mnuchin on Saturday said Washington supports the increase because of the reforms to lending rules.
“I look at this as a package transaction... we support a capital increase on the World Bank, along with the associated reforms that they’re talking about making,” Mnuchin told reporters.
The increase requires legislative approval, but Mnuchin said he was hopeful Congress would back the plan. Kim also said he has had contact with representatives from both parties and received strong support.
In a statement to the World Bank’s governing committee, Mnuchin applauded the plan to “significantly shift lending to poorer clients.”
While he did not mention China by name, Mnuchin applauded the shift to a “new income-based lending allocation target and the re-introduction of differentiated pricing” for loans — meaning wealthier countries would pay higher interest rates.
“The latter will incentivize better-off, more creditworthy borrowers to seek market financing to meet their needs for development,” he said.
Mnuchin said the new arrangement, including for the IFC, “frees resources for countries that don’t have sustainable access to private capital markets.”P
China’s Vice Finance Minister Zhu Guangyao said Beijing supported increasing World Bank resources but had reservations about the agreement for changes in lending policies.
“We are concerned about some of the policy commitments in the capital package, such as those on graduation, maturity premium increase for loans and differentiated loan pricing based on national income per capita,” he said in a statement.
“We hope that the management take different national circumstances into full account in the implementation of the graduation policies... to ensure that these policies will not impede cooperation between the (bank) and upper middle income countries.”
Kim acknowledged that lending to China would decline, but only gradually. That means “whatever borrowing they do has to be as impactful as possible.”
And he noted that because of the capital increase, “we will be able to maintain volumes for middle income countries as a whole.”
Zhu said the capital increase is “a concrete measure to support multilateralism” at a time when “anti-globalization sentiments, unilateralism, protectionism in trade” were creating uncertainties in the global economy.