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Jobs report preview: U.S. hiring holds up while threats multiply (nationthailand.com)

Jobs report preview: U.S. hiring holds up while threats multiply

InternationalDec 04. 2020Workers break up concrete while doing road work on the Google campus in Mountain View, Calif., on Oct. 21, 2020. MUST CREDIT: Bloomberg photo by David Paul Morris. 

By Syndication Washington Post, Bloomberg · Olivia Rockeman, Henry Ren

U.S. employment gains probably slowed only modestly in November despite a record surge of coronavirus cases that still threatens to limit or even reverse hiring in coming months.

Friday’s jobs report will show nonfarm employers added 475,000 people to payrolls and the unemployment rate fell 0.1 percentage point to 6.8%, according to economists surveyed by Bloomberg. While those would be the smallest improvements since the rebound began in May — and leave the economy 9.6 million jobs short of pre-pandemic levels — the labor market is in better shape than analysts expected it to be a few months ago.

Forecasters say steady hiring for holiday shipping, easing restrictions on businesses in late October and early November, and strong demand for construction work are likely to deliver a seventh-straight payroll gain. One caveat: payroll figures reflect data through mid-month, meaning jobs lost to subsequent lockdowns won’t show until December or later.

Even if the first jobs report since Joe Biden won the White House does show solid if cooling momentum, he may face a different reality upon taking office in January. In addition to raging infections, precarious businesses like restaurants face colder weather that’s discouraging outdoor dining, and the federal aid outlook remains uncertain.

Federal Reserve Chair Jerome Powell this week urged Congress to approve additional pandemic aid, warning that the economic crisis isn’t over. Policymakers will likely discuss the jobs report when they convene Dec. 15-16 and consider whether to adjust their bond-buying program to provide more stimulus.

While vaccine breakthroughs offer new promise, it may be many months before distribution is wide enough to meaningfully boost demand and affect employment, according to Jay Bryson, chief economist at Wells Fargo.

“Help is on the way, but it’s still a little bit of a race against time,” he said. “There’s going to be near-term weakness in the economy.”

On a positive note, filings for state unemployment benefits fell last week by the most in almost two months, though the figures may partly reflect volatility around the Thanksgiving holiday.

The U.S. saw 4.4 million infections in November, one-third of the nation’s outbreak total. While the surge slowed around the Thanksgiving holiday, millions of gatherings and the busiest air travel days since March may fuel infections that prompt further restrictions and curb hiring. Los Angeles County, the nation’s largest, has ordered its 10 million residents to stay home.

“The labor market has started to show signs of strain, with jobless claims moving higher and virus-related lockdown measures being reinstituted as case counts surge, but these factors will be more fully felt in the December data,” Bloomberg economists Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger wrote in a report.

The headline payrolls figure should reflect a reduction of more than 90,000 temporary workers for the decennial Census, which ended counts in October. Without that drag from government, private payroll growth is forecast to be 545,000, following 906,000 in October.

Weak seasonal hiring at retailers may weigh on overall jobs. The raw November figures are typically adjusted lower to account for an influx of holiday workers. In November 2019, retailers boosted payrolls by 431,900 on an unadjusted basis; that became a decline of 13,900 after seasonal adjustments.

“Temporary employees that get hired to work in stores, whether in a mall or a strip shopping center, to a large extent, aren’t happening this year,” said David Berson, chief economist at Nationwide Insurance.

Such headwinds mean temporary labor-market damage is more likely to become permanent, especially for those longest out of work. The ranks of those jobless for at least 27 weeks more than doubled over two months to a six-year high of 3.6 million in October.

November hiring is likely to come from goods-producing sectors rather than services, according to Bloomberg economist Yelena Shulyatyeva. She projects gains in both construction and manufacturing jobs, and gains for warehousing and transportation amid soaring holiday e-commerce demand.

Other data are less upbeat.

The Institute for Supply Management manufacturing employment index in November fell for the first time in seven months.

Private indicators from Homebase, a scheduling tool for 60,000 firms, signal business openings have fallen back to around pre-summer levels. Data from time-clock software maker Ultimate Kronos Group show shift work declined 0.2% in mid-November from a month earlier, the first drop since April.

“What we’re seeing is that downward momentum is exacerbated by the resurgence of the virus,” said Kathy Bostjancic of Oxford Economics, one of two forecasting firms to project a decline in jobs in November in Bloomberg’s survey.

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U.S. jobless claims drop, offering ray of hope for labor market (nationthailand.com)

U.S. jobless claims drop, offering ray of hope for labor market

InternationalDec 04. 2020A worker installs plumbing at the HL Enterprise manufacturing facility in Elkhart, Ind., on Oct. 8, 2020. MUST CREDIT: Bloomberg photo by Ty Wright. 

By Syndication Washington Post, Bloomberg · Jarrell Dillard

Applications for U.S. state unemployment benefits fell by the most in almost two months, offering some hope that the gradual recovery in the job market will continue despite a spike in covid-19 infections and renewed business restrictions.

Initial jobless claims in regular state programs decreased by 75,000 to 712,000 in the week ended Nov. 28, the first drop in three weeks, Labor Department data showed Thursday. Without adjustments for seasonal fluctuations, applications dropped by about 122,000 during the period.

Continuing claims — the total pool of Americans on state unemployment benefits — declined 569,000 to 5.52 million in the week ended Nov. 21.

The main figures were below economists’ projections for 775,000 initial claims and 5.8 million continuing claims, based on the median estimates in Bloomberg surveys. One caveat: seasonal adjustments on claims data tend to be trickier around holidays, and last week included Thanksgiving, making it important to see if the trend holds.

While the latest claims figures show gradual improvement, they’re still well above pre-pandemic levels. The labor market also remains challenged by a rising number of covid-19 cases and a tightening of business restrictions in parts of the U.S. Some industries such as travel, leisure and hospitality are still depressed by the pandemic and could cut jobs more aggressively in the absence of additional fiscal relief.

All but 10 states and territories posted unadjusted declines in initial claims last week, with some of the biggest drops occurring in California, Texas, Michigan and Georgia. Illinois, Oregon and Indiana reported the largest increases in filings during the holiday week.

“The plunge in initial claims does not refute the idea that the trend is rising; we expected a sharp fall because of the difficulty of adjusting for Thanksgiving,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note. He had forecast claims of 725,000.

The government’s monthly jobs report on Friday is projected to show payrolls grew by about 475,000 in November, still solid yet the smallest gain in seven months, according to the median forecast in a Bloomberg survey of economists. The jobless rate is forecast to tick down to 6.8% from 6.9%.

A report on Wednesday from ADP Research Institute showed that companies in the U.S. added fewer jobs than expected in November, a sign that businesses are slowing down the rate of hiring as coronavirus cases reach new levels.

Continuing claims for Pandemic Unemployment Assistance, a program that provides benefits to self-employed and gig workers, decreased about 339,000 to 8.87 million in the week ended Nov. 14. This number, though, is inflated by multiple-counting and fraud, according to a government watchdog’s report this week, and the Labor Department plans to add a disclaimer.

More people have moved into extended programs like Pandemic Emergency Unemployment Compensation, but these were put in place by the Cares Act will expire by year-end and leave millions of people without government aid. The number of Americans on PEUC assistance rose slightly to 4.57 million in the week ended Nov. 14.

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OPEC+ closes in on deal as talks focus on gradual taper of cuts (nationthailand.com)

OPEC+ closes in on deal as talks focus on gradual taper of cuts

InternationalDec 04. 2020A flame burns off waste gas at Saudi Aramco’s Ras Tanura oil refinery and terminal in Ras Tanura, Saudi Arabia, on Oct. 1, 2018. MUST CREDIT: Bloomberg photo by Simon Dawson. 

By Syndication Washington Post, Bloomberg · Javier Blas, Salma El Wardany, Grant Smith, Dina Khrennikova

OPEC+ is closing in on a deal to gently ease output curbs after days of fractious negotiations that revealed deep cracks at the core of the cartel.

After direct talks, Russia and Saudi Arabia have thrashed out a plan to take to other members, according to one delegate. Others also said a deal was close, but the details remain unclear. Discussions have focused on a gradual relaxation of output cuts over several months, and according to one delegate there could be a one-month delay before the tapering starts.

The proposals, if accepted by all of the Organization of Petroleum Exporting Countries and its allies, would tweak the current agreement — struck during the depths of the pandemic in April — that allows 1.9 million barrels a day of additional crude back on the market from Jan. 1. It’s not clear yet whether the proposals would return that same volume of production over a longer period, or a different amount.

OPEC has underpinned the recovery in oil prices with its historic cuts this year and the latest round of talks is testing its unity — and credibility. Negotiations have been unusually tense amid a clash between Saudi Arabia and the United Arab Emirates, and the meeting on Thursday was pushed back by two days because of the deadlock.

“Ministers are inching closer to a compromise that should break the impasse,” Energy Aspects Ltd. co-founder Amrita Sen said in a note. “OPEC+ officials are debating a more limited adjustment to the current deal than the proposed three-month delay.”

Oil in London was down about 0.5% at 10:51 a.m local time, trading near $48.

Importantly, the deal is likely to keep the oil market in deficit throughout the first quarter, allowing OPEC to drain bloated inventories. If the group had gone ahead with the full 1.9 million barrels a day increase on Jan. 1, the group’s economists calculated that the market would have flipped into surplus.

A gentler tapering of the cuts could offer a potential compromise after days of talks, offering something to members that are concerned about the fragility of the market amid a second wave of the virus, and also to nations that are impatient to raise production. The Russian government, after internal talks with its own oil companies, is ready to agree to a gradual easing of supply curbs within the first quarter of 2021, said a person familiar with the discussions.

OPEC+ rescued the oil market this year from an unprecedented slump, slashing production as the pandemic crushed demand. While crude has surged in recent weeks, a new wave of virus infections is hitting the global economy.

Fractious talks earlier this week raised the specter of the deal falling apart, which would sink prices and batter an industry that spans from tiny nations like Gabon to corporate giants such as Exxon Mobil Corp.

The intensity of the fight between Saudi Arabia and the UAE took OPEC-watchers by surprise, as the pair have long been staunch allies. But Abu Dhabi has been pursuing a more independent oil policy and wants to pump more.

Over the summer, Abu Dhabi’s impatience led it to casting aside its usual obedience to cartel discipline, and pump more crude than its quota allowed. The Saudis were furious, and summoned UAE Energy Minister Suhail Al-Mazrouei to Riyadh for a public dressing down.

While the UAE subsequently atoned, people familiar with its oil policy say Abu Dhabi believes the current quota is unfair, and is keen to make the most of massive investments in production capacity. It’s also planning a new regional price benchmark based around its Murban crude variety, which needs the kind of volumes that clash with production limits.

If a deal is eventually crafted, it will be scrutinized for its ability to keep the coalition together and disciplined. Tensions are expected to reemerge next year.

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Service industries in U.S. expand at a more moderate pace (nationthailand.com)

Service industries in U.S. expand at a more moderate pace

InternationalDec 04. 2020A worker sets up outdoor seating at a restaurant in Baltimore on Nov. 20, 2020. MUST CREDIT: Bloomberg photo by Al Drago. 

By Syndication Washington Post, Bloomberg · Henry Ren

U.S. service industries expanded at a more moderate, yet healthy pace in November, tempered by softer growth in orders and business activity that remain constrained by the coronavirus.

The Institute for Supply Management’s services index fell to 55.9 during the month from 56.6 in October, according to data released on Thursday. Readings above 50 indicate expansion, and the November figure was in line with the 55.8 median estimate in a Bloomberg survey of economists.

Consecutive monthly declines in the gauge underscore the pandemic-related challenges faced by service industries that include leisure and hospitality, travel, dining and retail. While still robust, odds of an acceleration of growth at service providers are diminished by a resurgence of Covid-19 and the onset of cooler temperatures.

“Respondents’ comments are mixed about business conditions and the economy,” Anthony Nieves, chair of the ISM’s Business Survey Committee, said in a statement. “Most companies are cautious as they navigate operations amid the pandemic and the aftermath of the U.S. presidential election.”

At the same time, sectors such as information and finance have remained strong throughout the pandemic. A consumer shift to online purchases also indicates retailers and transportation companies will continue expanding during the holiday-shopping season.

Fourteen service industries reported growth in November, led by transportation and warehousing. Health care, food services, construction and retail also expanded.

The ISM’s index of new orders at service providers eased 1.6 points to 57.2. The measure of service-related business activity, which parallels the ISM’s factory production index, fell to 58 from 61.2 a month earlier.

The group’s measure of services employment increased 1.4 points to 51.5, marking the third straight month in which respondents indicated payrolls gains. The government’s monthly jobs report on Friday is projected to show employment rose 475,000 in November, indicating the economy was still adding workers but at a slower pace.

ISM’s gauge of prices paid by service providers rose to an eight-year high of 66.1, indicating accelerating costs for materials and services, partially due to shortages of personal protective equipment.

Meanwhile, a measure of inventory sentiment dropped to 49.9 from 51.1, the second-lowest in records back to 1997 and indicating more service providers see their stockpiles as being too low.

A separate ISM report Tuesday showed factory activity also cooled in November but remained robust. Difficulties of hiring workers and temporary shutdowns for sanitation will likely limit manufacturing growth potential, the ISM said.

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Momentum builds for bipartisan $908 billion stimulus package as more GOP senators express support (nationthailand.com)

Momentum builds for bipartisan $908 billion stimulus package as more GOP senators express support

InternationalDec 04. 2020

By The Washington Post · Jeff Stein, Mike DeBonis, Seung Min Kim

WASHINGTON – Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi spoke Thursday amid growing momentum for a targeted coronavirus-relief deal, illustrating how Congress has snapped into action amid a surge in new cases and deaths.

They also discussed reaching a deal on a spending bill to avert a government shutdown on Dec. 11.

“We had a good conversation,” McConnell, R-Ky., said after his discussion with Pelosi. “I think we’re both interested in getting an outcome, both on the [spending bill] and on a coronavirus package.”

The talks – their first since the Nov. 3 election – came shortly after a growing number of lawmakers have rallied behind a $908 billion bipartisan spending bill that would aim to buttress parts of the economy over the next several months. While some of these lawmakers stopped short of endorsing every part of the proposal, many said the offer was solid enough that it should be used as the basis for negotiations, a sentiment that Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., expressed on Wednesday.

Sens. Joni Ernst, R-Iowa; Chuck Grassley, R-Iowa; Lindsey Graham, R-S.C.; John Cornyn, R-Texas; and Kevin Cramer, R-N.D., signaled their openness to the package, which had been unveiled by a group of moderate Republican and Democratic senators on Tuesday. The measure is more than what Senate Republicans had originally offered but less than what House Democrats had wanted, but it is designed to try and provide immediate relief to some parts of the economy as the pandemic enters a dangerous and increasingly deadly phase.

Graham said he’s “never been more hopeful that we’ll get a bill … the $908 billion bill, that’s the one I support.” He said he had talked to President Donald Trump about the measure “extensively.”

The two top congressional Democrats – House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y. – on Wednesday called the bipartisan offer an appropriate basis for stimulus negotiations, a significant retreat from their previous demands for a much large stimulus package. President-elect Joe Biden has also urged lawmakers to come together on an interim deal during the lame duck session of Congress.

Trump on Thursday also backed quick approval of a stimulus package. A White House spokesman clarified that Trump was speaking in support of the narrow measure introduced by McConnell, not the bipartisan stimulus plan.

“I think we are getting very close. I want it to happen,” Trump told reporters.

On Thursday, Ernst and Cornyn expressed measured support for the developing talks. Ernst, a member of the Senate Republican leadership team, did not dismiss the viability of the $908 billion framework despite expressing concerns about some of its policy provisions. Cornyn also said senior Democrats’ embrace of the bipartisan plan “represents progress.”

“I think it’s moving in the right direction,” Cornyn said, adding he remained concerned about the structure of state and local funding.

Grassley, the chair of the Senate finance committee, also signaled he’d be willing to accept the bipartisan framework if the details are right. “It’s a little high for me but more important for me are the things that are in it. And if everything in it has bipartisan support … the figure might not be the biggest thing,” he said.

Cramer, an ally of the president’s, also sounded a positive note about the push: “I like the effort. It strikes the right balance of compromise, and it’s a number that’s doable.”

Although there has been a sudden burst of bipartisan momentum for the package since Tuesday, it remains an incomplete legislative proposal that has not been drafted as a formal piece of legislation yet. Still, the rapid mobilization of support shows how lawmakers from both parties are trying to come up with a compromise quickly after months of inaction.

Coronavirus cases are surging across the U.S. and concerns have intensified about the potential economic fall-out. Congress also faces a series of rapidly approaching economic deadlines, with aid programs for jobless Americans and renters set to expire before the end of the year.

With talks between congressional leaders stalled for months, a bipartisan group led by Sen. Joe Manchin, D-W.Va., unveiled the compromise measure on Tuesday aimed to restart negotiations. The plan would devote close to $300 billion in another round of small business aid; $160 billion for state and local governments; fund federal unemployment benefits at $300 per week; and devote tens of billions of dollars to other priorities, such as childcare, hunger, and vaccine distribution.

It also includes a temporary liability shield to insulate firms and other entities from coronavirus-related lawsuits, a measure Democrats strongly oppose, although lawmakers were still hashing out details of that policy and others. The bipartisan proposal would not, however, include a new round of stimulus checks.

In a floor speech on Thursday morning, Senate Majority Leader Mitch McConnell, R-Ky., did not reveal his position on the bipartisan framework, but called for lawmakers to swiftly approve additional economic aid. McConnell on Wednesday circulated a separate plan that broke sharply with key Democratic priorities and proposed no additional spending on supplemental federal unemployment benefits.

“Compromise is within reach. We know where we agree. We can do this,” McConnell said.

Pelosi and Treasury Secretary Steven Mnuchin discussed approving the government spending package and a coronavirus stimulus bill “as soon as possible,” a Pelosi spokesman said on twitter.

Pelosi expressed optimism a spending deal could be reached by Dec. 11: “We’ll have an agreement. I don’t know when.”

McConnell has not said whether he would put the Manchin-led plan up for a vote, but faces pressure from conservatives in his rank to pull the legislation to the right. Conservative Senators have already objected to the plan’s proposal for state and local aid, although the framework calls for far less than Democrats have sought.

Sens. Mark Warner, D-Va.; Susan Collins, R-Maine; Mitt Romney, R-Utah; and Lisa Murkowski, R-Alaska, are among the leaders behind the bipartisan effort. Not all lawmakers are moving in support of the measure, though.

“I’m very disappointed that a proposal from some of my colleagues today apparently includes provisions that spends hundreds of billions of dollars in taxpayer money to bail out wasteful states,” Sen. Rick Scott, R-Fla., one of the conservatives, said in a statement about the bipartisan proposal.

Ernst told reporter she would be willing to accept some form of aid for state and local governments, albeit with guardrails to ensure funding is target for covid-related needs. She also expressed concern about language in the measure related to insulating firms and other entities from covid-related lawsuits.

“We’ve got a long ways to go, but I would like to see something by the end of the year,” Ernst said.

In a floor speech on Thursday, Schumer reiterated that he believes an agreement centered around it could be in reach.

“We are already much closer to an agreement because of the bipartisan talks these eight senators have done,” Schumer said. “And we can build off their momentum. What’s the alternative?”

More than 200,000 Americans tested positive for the coronavirus on Wednesday, the most of any day since the pandemic began. And close to 3,000 Americans died from the virus on Wednesday, a level that is not expected to abate in the coming weeks.

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Dollar bears vindicated by landmark week as spiral accelerates (nationthailand.com)

Dollar bears vindicated by landmark week as spiral accelerates

InternationalDec 04. 2020A collection of $1 bills are displayed in an arranged photograph on Aug. 5, 2019. MUST CREDIT: Bloomberg photo by Chris Ratcliffe. 

By Syndication Washington Post, Bloomberg · Susanne Barton, Ruth Carson, Hooyeon Kim

It’s turning into a week of vindication for proponents of a weaker dollar as the case they’ve been making for years may be gaining steam.

The greenback is spiraling lower, probing levels last seen in April 2018, judging by a Bloomberg index. The tumble is part of a broader move across financial markets to price in brighter growth prospects for 2021 and the potential for superior investment opportunities outside the U.S., in large part as hopes for a coronavirus vaccine build.

Dollar bears are feeling encouraged by the breadth of the currency’s declines this week: The euro, the Australian and Canadian dollars and the Korean won have all touched their highest levels in more than two years, while the Swiss franc is at its strongest since 2015. The pound is at the highest in roughly a year, even amid the uncertainty surrounding Brexit.

“We are seeing money being put back to work after the defensive positions held in the dollar,” said Chris Turner, a currency strategist at ING Groep NV. “Vaccine news is adding weight to the view of a synchronized global upturn in 2021; the dollar can fall another 5-10% next year.”

More weakness in the greenback may come as asset managers build record short bets. The Congress’s renewed focus on fiscal stimulus in recent days delivered the latest blow to the dollar. In another sign of how investors are increasingly bullish on the outlook for economic growth and vaccine development, U.S. stocks are at record highs and commodities are rising.

It all adds credence to those on Wall Street who are warning that the greenback will undergo a bearish cycle with the Federal Reserve keeping rates low for years.

The dollar has dropped about 13% since peaking in March. It’s down 8% against the Swiss franc and roughly 4% versus the yen in 2020, two other traditional haven currencies, underlining the impact of the Fed’s unprecedented stimulus.

Here are key levels breached this week:

– Sterling touched $1.3489, pushing beyond a high touched in early September to reach the strongest since December 2019.

– The euro has broken through the psychological level of $1.20. It touched $1.2173 on Thursday, its strongest since April 2018

– The Canadian dollar strengthened to C$1.2885, the strongest since October 2018

– The Australian dollar rose to 74.47 U.S. cents, its highest level in more than two years

– The Swiss franc soared to its highest since January 2015

– The risk-sensitive Korean won strengthened to 1096.13 against the dollar, its strongest since June 2018, after breaking the key 1,100 level

Credit Suisse forecasts that the euro may rise to $1.25 by the end of 2021, while Goldman Sachs Asset Management favors shorting the dollar against the yuan and sees further gains in the euro and yen. Morgan Stanley and Citigroup Inc. have also forecast a weaker greenback.

“Risk-on sentiment seemed to catch another leg higher this week — we think this should accelerate the dollar’s tilt lower in the near term,” said Terence Wu, foreign-exchange strategist at Oversea-Chinese Banking Corp. in Singapore. “This round of dollar weakness is still more focused in the G-10 space,” although “we expect USD-Asia downside to open up in time.”

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Trump administration pushes pay freeze for federal workers, after initially calling for a 1% raise (nationthailand.com)

Trump administration pushes pay freeze for federal workers, after initially calling for a 1% raise

InternationalDec 03. 2020OMB Budget Director Russell Vought sits between Treasury Secretary Steven Mnuchin, left, and Scott Atlas as they listen to a coronavirus briefing by President Donald Trump on Aug 10, 2020. MUST CREDIT: Washington Post photo by Jabin Botsford 

By The Washington Post · Eric Yoder

WASHINGTON – The Trump administration has dropped its call for a 1% federal employee pay raise in January, advocating instead for a freeze on pay rates for the 2.1 million executive branch workers.

In a letter dated Monday to Capitol Hill, the Office of Management and Budget endorsed language in one of a set of agency funding bills crafted by the Senate that would provide for no raise.

“In the context of budgetary constraints and the recent, pandemic-related impacts on non-Federal labor markets, the Administration supports the policy in the bill to maintain for 2021 the current level of Federal civilian employee pay,” the letter said.

Since the start of its fiscal year Oct. 1, the government has been operating under a stopgap “continuing resolution” that expires Dec. 11. Congress is working to craft a replacement measure, using as its starting point the Senate bills – which have not reached voting even at the committee level – and bills the House passed this summer.

President Donald Trump’s early-year budget plan called for a 1% federal employee raise along with proposals to reduce the value of retirement benefits, which Congress never actively considered.

When it passed a spending bill covering general government matters, the House in effect accepted that amount by not specifying a raise figure. Under the complex federal pay law, if no number is enacted into law by the end of a year, the White House’s proposed raise takes effect automatically.

Ken Thomas, president of the National Active and Retired Federal Employees Association, called the White House’s change of position “disappointing, to say the least.”

“In a year when federal employees have stepped up to respond to a global pandemic, with tens of thousands on the frontlines working on behalf of the American people and contracting COVID-19 in the process, a 1 percent pay increase was the least our nation could do to honor the commitment of Feds,” he said in a statement.

“Even on his way out of the White House Donald Trump can’t resist another gratuitous attack on our dedicated federal employees,” Rep. Gerald Connolly, D-Va, whose district includes many federal workers, said in a statement. “These public servants have done heroic work during the pandemic and deserve our support, and instead Donald Trump is reneging on another promise.”

Connolly, chair of the House government operations subcommittee, and 10 other Democrats active in federal workplace issues recently urged House and Senate budget leaders to include a 1% raise in the planned catchall spending measure. Because Trump proposed it, agencies “will have already accounted for the increase in their budgets” and employees “have likewise been expecting this increase and incorporated it into their family budgets,” they wrote.

The call for a freeze comes less than two months after the advisory group overseeing federal employee pay reported that comparable private sector jobs pay about 23% more on average. That study, however, has little impact on the annual process of setting a federal employee raise.

Trump had recommended freezes in his budget proposals for 2019 and 2020, though he ultimately agreed to raises averaging 1.9% and 3.1% in those years, with some variation by locality. In 2017, he had recommended a 1.9% average raise for 2018, which Congress accepted.

Federal pay rates were frozen 2011 to 2013 under an agreement between the Obama administration and congressional Republicans at a time of high concern over federal budget deficits. When rates are frozen, individual employees still can receive raises for various reasons including promotions or advancement up the steps of a pay grade, if their pay systems have that feature.

Raises for uniformed military personnel are determined separately. The bills before Congress would provide a 3% raise for them in January as Trump recommended.

Also determined separately are inflation adjustments for retirement benefits. Federal and military retirees are to receive the same 1.3% cost-of-living adjustment in January that will be paid under Social Security.

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Oil rises after u.s. supply drop and signs OPEC talks advance (nationthailand.com)

Oil rises after u.s. supply drop and signs OPEC talks advance

InternationalDec 03. 2020A valve control wheel connected to crude oil pipework in an oilfield near Dyurtyuli, Russia, on Nov. 19, 2020. MUST CREDIT: Bloomberg photo by Andrey Rudakov. 

By Syndication Washington Post, Bloomberg · Andres Guerra Luz, Alex Longley

Oil rallied after a surprise decline in U.S. crude inventories and signals that OPEC+ made progress toward a widely anticipated deal on output curbs.

Futures rose as much as 2.2% in New York, reversing earlier losses following a government report that showed crude stockpiles fell by 679,000 barrels last week. U.S. oil exports topped 3 million barrels a day for the first time in five weeks, though gasoline and distillate storage increased.

Trading was choppy earlier in the session as the Organization of Petroleum Exporting Countries worked to gain consensus on a deal to extend production caps as the global market recovery remains fragile. However, the group and its allies have made headway toward a deal, according to a delegate.

“The draw was unexpected, and was really a function of a pretty significant rise in U.S. crude exports,” said Rob Thummel, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “Builds in gasoline and diesel are clearly indications of covid restrictions coming back into mobility data and causing short-term concerns about demand.”

Tensions within OPEC come at a time when the pandemic remains a prominent near-term overhang to a rebound in demand. While the U.K. became the first western country to approve a covid-19 vaccine, clearing the way for the deployment of Pfizer and BioNTech’s shot, virus cases continue to surge around the world with governments preparing tighter restrictions to curb the spread.

Still, there have been renewed signs of underlying strength in the market this week, with Brent crude’s nearest price timespread edging back into a bullish backwardation structure that indicates tight supplies. Physical markets are looking healthier, with around 20 tankers laden with U.S. crude set to leave for Asia this month and key North Sea swaps markets surging in recent days. Progress toward another round of fiscal stimulus in the U.S. could also provide a much needed boost to demand.

“The market is pricing in a solution that will not see extra barrels hit the market during the early part of 2021,” said Ole Hansen, head of commodities strategy at Saxo Bank. It appears that “OPEC+ will not shoot themselves in the foot so close to an expected pickup in demand.”

West Texas Intermediate for January delivery rose 90 cents to $45.45 a barrel as of 11:28 a.m. in New York. Brent for February settlement gained 81 cents to $48.23 a barrel.

The U.S. Energy Information Administration report also showed crude-processing rates at refineries declined and are still below 80% of capacity amid a pandemic-induced slump in demand. The combined refining margin for gasoline and diesel is below $9 a barrel, its lowest since 2009.

Plus, the oil market could be underestimating the bearish implications of the delay in the OPEC+ talks, consultant FGE wrote in a report. If there’s no agreement, stockpiles would rise early next year and lead to a very bearish market, FGE said. That comes as output from the group rose last month by 530,000 barrels a day, according to a Bloomberg survey, with Libya pumping at the highest level in a year as its internal conflict abates.

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U.S. hiring slowed in November as covid-19 cases surged, ADP report says (nationthailand.com)

U.S. hiring slowed in November as covid-19 cases surged, ADP report says

InternationalDec 03. 2020

By The Washington Post · Hamza Shaban

U.S. businesses slowed hiring in November, adding only 307,000 workers to their private payrolls – missing the benchmark that analysts had expected and probably heightening concerns that companies and households will continue to struggle without further action from Congress to deliver coronavirus aid.

The figures reported Wednesday by ADP Research Institute mark a disappointing departure from the 475,000 jobs that some economists had predicted.

November’s tally failed to improve upon or even match the gains of 405,000 jobs from October, suggesting that the economic recovery is slowing, even as hopes of a viable coronavirus vaccine have lifted business prospects and have begun to outline a potential end to the pandemic.

The decelerating gains were the lowest payroll numbers ADP has reported since the summer.

“While November saw employment gains, the pace continues to slow,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “Job growth remained positive across all industries and sizes.”

Nearly 90% of the job gains in November came in service-providing sectors, ADP reported, including leisure and hospitality, health care and administrative services, amounting to 276,000 roles. Construction jobs, meanwhile, increased by 22,000. Across all industries, medium-size businesses experienced the greatest gains, adding 139,000 jobs last month, while small businesses increased their ranks by 110,000, followed by the largest companies, which added 58,000 jobs.

ADP’s data is subject to revision and may not offer a complete picture of the U.S. labor market. On Friday, the Labor Department is scheduled to release its monthly employment report, which does not always align with ADP’s numbers.

But the payroll data offers another worrying sign amid surging coronavirus infections. On Monday, after the holiday weekend, U.S. health officials reported 181,769 new infections – one of the highest ever recorded. The figure also continues an alarming streak of more than 100,000 new daily cases for nearly 30 consecutive days. Hospitalizations over the past seven days also jumped 12%.

As the virus spreads and millions of Americans feel the crush of financial hardship, Congress has for months faced calls to fund another round of emergency relief. Lawmakers on Tuesday showed the first sign of movement in weeks, as a bipartisan group introduced an aid package totaling about $908 billion.

The effort arrived as other powerful figures aimed to steer the direction of economic relief, highlighting the lack of consensus in Washington and the protracted disagreements over the size of a deal and key provisions. President-elect Joe Biden has called for massive government spending. Meanwhile, Senate Majority Leader Mitch McConnell, R-Ky., and House Democrats are each crafting new proposals of their own.

The latest jobs figures may add a sense of urgency to unify the clashing approaches. But further political uncertainty remains. Two January runoff elections in Georgia will decide the makeup of the Senate, either granting Democrats control of Congress and the White House or allowing Republicans to maintain their slim majority.

More than 20 million Americans were receiving some form of unemployment aid as of early November, according to the Labor Department. The last two weekly unemployment reports show further worrisome signs, as new unemployment claims rose, and economists say further inaction from Congress in the face of a public health crisis could derail the fledgling recovery.

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What’s in store for Biden’s economic team (nationthailand.com)

What’s in store for Biden’s economic team

InternationalDec 03. 2020Janet Yellen, President-elect Biden’s nominee for treasury secretary, at the Jackson Hole economic symposium, sponsored by the Federal Reserve Bank of Kansas City, in Moran, Wyo., on Aug. 22, 2019. MUST CREDIT: Bloomberg photo by David Paul Morris. 

By Syndication Washington Post, Bloomberg · Jenny Leonard

President-elect Joe Biden on Tuesday announced the team that will take on one of the key early challenges of his presidency: keeping the U.S. economy’s recovery from the coronavirus on track.

Biden’s economic officials, who mostly have crisis experience from the Obama administration, will be charged with delivering more fiscal stimulus to support an economy that risks running out of steam after a rapid initial rebound from the virus slump.

The team will also be in charge of a longer-term economic plan that’s a marked departure from President Donald Trump’s agenda — with a focus on boosting clean energy and domestic manufacturing, improving care for children and the elderly, and narrowing racial inequalities in income and wealth.

Those policies, like the short-term stimulus measures, face obstacles in a potentially divided Congress.

At an event in Wilmington, Delaware to introduce the group, Biden said the team will “get us through this ongoing economic crisis and help us build the economy back” better than before.

Following are snapshots of Biden’s intended nominees and the tasks ahead of them. Other key officials such as secretaries of Commerce and Labor, as well as U.S. trade representative, have yet to be announced.

– Janet Yellen, Treasury Secretary. As a Federal Reserve regional president, then vice chair and chair in years before and after the 2008 financial crisis, Yellen has plenty of experience at firefighting — and that record has won her support from both sides of the political aisle. “It’s essential that we move with urgency,” she said Tuesday. “Inaction will produce a self-reinforcing downturn, causing yet more devastation. And we risk missing the obligation to address deeper structural problems.”

One early task may be to work with her former colleagues on the Fed’s emergency lending programs for businesses and local government, some of which are due to run out at the end of this month. Current Treasury Secretary Steven Mnuchin triggered a rare public dispute with the central bank by saying that the Fed should return the money allotted as backstop for the loan facilities, instead of extending them.

Yellen will also have to navigate international disputes, especially over trade and ties with China, left behind by the Trump administration.

– Adewale “Wally” Adeyemo, Deputy Treasury Secretary. Adeyemo served in various senior economic roles in the Obama administration and represented the U.S. at international summits like the Group of 20 meetings. He’ll likely be in charge of day-to-day operations at Treasury.

Under Mnuchin, the department has increasingly relied on sanctions to penalize a range of nations and senior officials. Adeyemo signaled on Tuesday there could be some continuity on this issue with the Trump administration.

At the introductory event, Adeyemo said the department will “remain laser-focused” on protecting national security, including “using our sanctions regime to hold bad actors accountable.”

– Cecilia Rouse, Council of Economic Advisers Chair. Rouse, dean at Princeton University’s School of Public and International Affairs, was a member of the council under Obama and worked as an economic adviser to Bill Clinton.Much of her research has focused on the need to close racial gaps in income, wealth or education. That’s likely to be a priority in the design of the next pandemic stimulus program, since the burden of job losses during the coronavirus crisis has fallen disproportionately on minority groups.

The pandemic brings urgency but also offers the “opportunity to build a better economy in its wake,” Rouse said Tuesday.

– Jared Bernstein, CEA member. Bernstein has long advised Biden on economic policy, both when he was vice president and during his 2020 campaign.The labor economist is an advocate for a higher federal minimum wage and a new Fed framework that would require the central bank to put more weight on indicators like the jobless rate among minority groups when setting policy. Both those ideas made their way into Biden’s economic platform.

– Heather Boushey, CEA member. Boushey, a progressive economist who runs the Washington Center for Equitable Growth, has done extensive work on how to improve support for U.S. families with policies such as paid parental and sick leave.

That’s likely an issue that will loom large for the Biden economic team in the short term — since many schoolchildren are studying at home in the pandemic, putting working parents in a bind — and also feature in the new president’s longer-term commitment to designing better social safety nets.

– Neera Tanden, Office of Management and Budget director. Tanden, who worked on the Affordable Care Act under the Obama administration and was a senior aide to Hillary Clinton, is one of the few Biden picks to draw vocal criticism from congressional Republicans, who’ve signaled they may try to block her appointment.

As budget director she’d be tasked with navigating concerns about a rising national debt that could derail Biden’s agenda. The pandemic pushed the U.S. budget deficit to $3.1 trillion this year, the biggest shortfall as a share of the economy since World War II.

Economists have generally shifted in favor of expansionary fiscal policy, especially during an emergency like coronavirus — but Republicans in Congress, and potentially some Democrats too, could push back with calls for spending restraint.

– Brian Deese, National Economic Council. Deese, a BlackRock Inc. executive who has specialized in sustainable investment and a former Obama adviser, has been tapped by Biden to head the policy-coordinating NEC, according to people familiar with the matter, though that appointment hasn’t been confirmed yet.While his Wall Street ties and past work on deficit reduction have drawn criticism from some progressive Democrats, Deese’s expertise on climate policy will likely put him at the center of one of the main initiatives promised by the new administration.

A plan to invest $2 trillion in clean energy was the biggest single economic item in the Biden campaign platform. It faces a tough reception in Congress, where many Republicans are skeptical about climate change in addition to opposing big-spending government programs.