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  • Asian shares higher after report shows resilience in US jobs

    Asian shares higher after report shows resilience in US jobs

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    Shares were mostly higher in Asia on Monday after a report Friday showed resilience in the U.S. jobs market.

    Benchmarks rose in Tokyo and Seoul but fell in Shanghai. Markets were closed in Hong Kong and Sydney after last week ended with Good Friday holidays in many countries. U.S. futures and oil prices advanced.

    The highly anticipated report on U.S. employment showed hiring slowed more than expected but remained steady last month.

    Friday’s jobs report showed that American employers added 236,000 jobs last month, a slowdown from February’s 326,000 and slightly below economists’ expectations. Wages, meanwhile, grew 0.3% from February to match expectations. But year-over-year wage gains slowed to 4.2% from 4.6%.

    Asian central banks are also struggling to steer the delicate course of curbing inflation while avoiding putting economies into recession.

    In Asian trading Monday, Tokyo’s Nikkei 225 index added 0.4% to 27633.98. In Seoul, the Kospi surged 1% to 2,515.49.

    The Shanghai Composite index gave up early gains, losing 0.1% to 3,326.17. Shares rose in Taiwan but fell in Southeast Asia.

    The Federal Reserve faces a tough decision over whether to raise interest rates to drive down inflation that’s still high or hold off given signs of a slowing economy.

    “”I suspect we are entering the peak uncertainty phase around the Fed’s next move as investors debate if credit tightening from financial stress will be enough to warrant cuts or if we are heading for more hikes,” Stephen Innes of SPI Asset Management said in a commentary.

    The U.S. stock market was closed in observance of Good Friday, as were many markets across Europe. That left the U.S. bond market as one of the few open to react to the latest jobs update.

    The immediate reaction from the bond market seemed to lean toward another hike. Not only did yields rise for Treasurys, so did bets for the Fed to raise rates by another quarter of a percentage point in May at its next meeting.

    The yield on the 10-year Treasury climbed to 3.40% from 3.30% late Thursday. It was at 3.37% early Monday.

    A cooler job market is exactly what the Fed is trying to achieve. Raising rates is one of the Fed’s most effective ways to undercut inflation, but it’s a notoriously blunt tool that works only by slowing the entire economy. That raises the risk of a recession and hurts prices for stocks, bonds and other investments.

    More data are coming this week, with the latest monthly update on prices consumers are paying on Wednesday. Economists expect it to show inflation slowing but well above the Fed’s target.

    Many economists see a recession later this year as likely. But some say a narrow possibility still exists where the Fed could raise rates just enough to get inflation fully under control without causing a severe recession.

    In other trading, U.S. benchmark crude picked up 7 cents to $80.77 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, edged 1 cent higher to $85.13 per barrel.

    The dollar rose to 132.57 Japanese yen from 132.16 yen. The euro was unchanged at $1.0902.

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  • As India’s population soars above all, fewer women have jobs

    As India’s population soars above all, fewer women have jobs

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    MUMBAI, India — Sheela Singh cried the day she handed in her resignation.

    For 16 years, she had been a social worker in Mumbai, India’s frenetic financial capital, and she loved the work. But her family kept telling her she needed to stay at home to take care of her two children. She resisted the pressure for years, but when she found out her daughter was skipping school when she was at work, it felt like she didn’t have a choice.

    “Everyone used to tell me my kids were neglected … it made me feel really bad,” Singh, 39, said.

    When she resigned in 2020, Singh was earning more money than her husband, an auto-rickshaw driver whose earnings fluctuated day to day. But nobody suggested he quit.

    “His friends used to taunt him that he was living off my salary,” Singh said. “I thought that clearly there was no value in me working so what’s the use?”

    India is on the cusp of surpassing China to become the world’s most populous country, and its economy is among the fastest-growing in the world. But the number of Indian women in the workforce, already among the 20 lowest in the world, has been shrinking for years.

    It’s not only a problem for women like Singh, but a growing challenge for India’s own economic ambitions if its estimated 670 million women are left behind as its population expands. The hope is that India’s fast-growing working-age population will propel its growth for years to come. Yet experts worry this could just as easily become a demographic liability if India fails to ensure its rising population, especially its women, are employed.

    Without Singh’s income, her family can no longer afford to live in Mumbai, one of Asia’s most expensive cities, and she’s now preparing to move back to her village to save money. “But there are no jobs there,” she sighed.

    ___

    EDITOR’S NOTE: This story is part of an ongoing series exploring what it means for the 1.4 billion inhabitants of India to live in what will be the world’s most populated country. ___

    The women’s employment rate peaked at 35% in 2004 and fell to around 25% in 2022, according to calculations based off official data, said Rosa Abraham, an economist at Azim Premji University. But official figures count as employed people who report as little as one hour of work outside the home in the previous week.

    A national jobs crisis is one reason for the gap, experts say, but entrenched cultural beliefs that see women as the primary caregivers and stigmatize them working outside the home, as in Singh’s case, is another.

    The Center for Monitoring the Indian Economy (CMIE), which uses a more restrictive definition of employment, found that only 10% of working age Indian women in 2022 were either employed or looking for jobs. This means there are only 39 million women employed in the workforce compared to 361 million men.

    Just a few decades ago, things seemed to be on a different track.

    When Singh became a social worker in 2004, India was still riding high from historic reforms in the 1990s. New industries and new opportunities were born seemingly overnight, sparking millions to leave their villages and move to cities like Mumbai in search of better jobs.

    It felt life-changing. “I didn’t have a college degree, so I never thought it would be possible for someone like me to get a job in an office,” she said.

    Even then, leaving home to work was an uphill fight for many women. Sunita Sutar, who was in school in 2004, said that women in her village of Shirsawadi in Maharashtra state were usually married off at 18, beginning lives that revolved around their husbands’ homes. Neighbors mocked her parents for investing in her education, saying it wouldn’t matter after marriage.

    Sutar bucked the trend. In 2013, she became the first person in her village of nearly 2,000 people to earn an engineering degree.

    “I knew that if I studied, only then would I become something — otherwise, I’d be like the rest, married off and stuck in the village,” Sutar said.

    Today, she lives and works in Mumbai as an auditor for the Indian Defense Department, a government job coveted by many Indians for its security, prestige and benefits.

    In one way, she was part of a trend: Indian women have gained better access to education since her youth, and are now nearly at parity with men. But for most women, education hasn’t led to jobs. Even as more women have begun graduating from school, joblessness has swelled.

    “The working age population continues to grow but employment hasn’t kept up, which means the proportion of people with jobs will only decline,” said Mahesh Vyas, director at CMIE, adding there’s been a severe slowdown in good quality jobs in the last decade. “This also keeps women out of the workforce as they or their families may see more benefit in taking care of the home or children, instead of toiling in low-paid work.”

    And even when jobs are available, social pressures can keep women away.

    In her home village in Uttar Pradesh state, Chauhan hardly ever saw women working outside the home. But when she came to Mumbai in 2006, she saw women swarm public spaces, Chauhan said, serving food in cafes, cutting hair or painting nails in salons, selling tickets for the local trains, or boarding the trains themselves, crammed into packed compartments as they rushed to work. It was motivating to see what was possible, she said.

    “When I started working and leaving the house, my family used to say I must be working as a prostitute,” said Lalmani Chauhan, a social worker.

    One reason she was able to hold onto her job was because it became a lifeline when an accident left her husband bedridden and unable to work, Chauhan said.

    Abraham said there is growing recognition among policymakers that the retreat of women from the workforce is a huge problem, but it has not been met with direct fixes like more childcare facilities or transportation safety.

    When more women participate in the labor market, she added, they contribute to the economy and their family’s income, but they also are empowered to make decisions. Children who grow up in a household where both parents work, especially girls, are more likely to be employed later.

    The number of working-age Indian women who don’t have jobs is staggering — almost twice the entire number of people in the United States. Experts say this gap could be a huge opportunity if India can find a way to plug it. A 2018 McKinsey report estimated that India could add $552 billion to its GDP by increasing its female workforce participation rate by 10 percent.

    Even as she prepares to leave her one-bedroom home, tucked deep inside a narrow lane in a Mumbai slum, Singh is determined to return to the city in the near future. She hopes to find a way to work again, saying she will take whatever job she can find.

    “I never had to ask anyone for a single rupee (before),” Singh said, adding she feels shame every time she’s forced to ask her husband.

    “I felt independent before. See, I lost a part of myself when I quit my job,” she said. “I want that feeling back.”

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  • Thousands of doctors plan to walk off job again in England

    Thousands of doctors plan to walk off job again in England

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    The British public health system is warning that a planned four-day strike by tens of thousands of doctors could lead to the postponement of a quarter-million medical appointments

    LONDON — A four-day strike planned by tens of thousands of doctors in England next week could lead to the postponement of a quarter-million medical appointments, a National Health Service official said Saturday.

    Dr. Layla McCay, policy director at the NHS Confederation, said the impact is expected to be far greater than a three-day walkout last month by doctors early in their career that led to 175,000 appointments and procedures being postponed.

    “The impact is going to be so significant that this one is likely to have impact on patient safety, and that is a huge concern for every health care leader,” McCay told BBC Radio 4.

    The strike planned for Tuesday by so-called junior doctors would be the latest in a wave of disruptive labor actions by public sector workers demanding pay hikes to offset inflation that exceeds 10%. A cost-of-living crisis driven by sharp food and energy price increases has left people struggling to pay bills as union wages have fallen in real terms over the past decade.

    Last week, passport office workers began a five-week strike and security officers at Heathrow Airport walked off the job for 10 days. Strikes by train and bus drivers, postal workers, ambulance drivers and nurses have created havoc for Britons.

    Teachers who recently rejected a pay raise as unacceptable plan to stage strikes April 27 and May 2, further inconveniencing parents and pupils.

    The British Medical Association said junior doctors have lost more than 26% in pay in real terms over the past 15 years. The union said the strikes could be avoided if the government makes a reasonable offer.

    The Department of Health and Social Care has insisted that strikes be called off before negotiations can take place.

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  • Thousands of doctors plan to walk off job again in England

    Thousands of doctors plan to walk off job again in England

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    The British public health system is warning that a planned four-day strike by tens of thousands of doctors could lead to the postponement of a quarter-million medical appointments

    LONDON — A four-day strike planned by tens of thousands of doctors in England next week could lead to the postponement of a quarter-million medical appointments, a National Health Service official said Saturday.

    Dr. Layla McCay, policy director at the NHS Confederation, said the impact is expected to be far greater than a three-day walkout last month by doctors early in their career that led to 175,000 appointments and procedures being postponed.

    “The impact is going to be so significant that this one is likely to have impact on patient safety, and that is a huge concern for every health care leader,” McCay told BBC Radio 4.

    The strike planned for Tuesday by so-called junior doctors would be the latest in a wave of disruptive labor actions by public sector workers demanding pay hikes to offset inflation that exceeds 10%. A cost-of-living crisis driven by sharp food and energy price increases has left people struggling to pay bills as union wages have fallen in real terms over the past decade.

    Last week, passport office workers began a five-week strike and security officers at Heathrow Airport walked off the job for 10 days. Strikes by train and bus drivers, postal workers, ambulance drivers and nurses have created havoc for Britons.

    Teachers who recently rejected a pay raise as unacceptable plan to stage strikes April 27 and May 2, further inconveniencing parents and pupils.

    The British Medical Association said junior doctors have lost more than 26% in pay in real terms over the past 15 years. The union said the strikes could be avoided if the government makes a reasonable offer.

    The Department of Health and Social Care has insisted that strikes be called off before negotiations can take place.

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  • Unemployment fell to 3.5% under Biden. For how much longer?

    Unemployment fell to 3.5% under Biden. For how much longer?

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    WASHINGTON — President Joe Biden keeps seeing good economic news and bad public approval ratings. The unemployment rate fell to 3.5% in March. More than 236,000 jobs were added. But there has been no political payoff for the president.

    US. adults are skipping past the jobs numbers and generally feeling horrible about the economy. White House aides can list plenty of reasons for the pessimism: high inflation, the hangover from the pandemic and the political polarization that leaves Republicans automatically believing the economy is sour under a Democratic president.

    Going forward, an emerging challenge for Biden might be the expectation that unemployment will get much worse this year.

    This is the opinion of the Federal Reserve, which expects the jobless rate to hit 4.5%. And the Congressional Budget Office (5.1%). Even the proposed budget that Biden just put forth models an increase (4.3%) from the current rate. Many Wall Street analysts are, likewise, operating under the shorthand that the Fed tames inflation by raising interest rates, which in turn causes demand to tumble and joblessness to rise.

    Friday’s jobs report showed that the economy is cooling as wage growth slowed, but the labor market is still running much hotter than the overall economy in a way that can fuel doubts. Biden’s bet is that the conventional economic wisdom is wrong and that 6% inflation can be beaten while keeping unemployment low.

    “We continue to face economic challenges from a position of strength,” Biden said in a statement about the latest jobs report.

    A new independent economic analysis helps to show why the low unemployment rate has yet to resonate with people: There aren’t enough workers to fill the open jobs, causing the economy to operate with speed bumps and frictions that make things seem worse than they are in the data. The analysis suggests that the economy would arguably function far more smoothly with unemployment higher at 4.6%, even though that could translate into nearly 2 million fewer people holding jobs.

    The job market is what economists call “inefficiently tight,” a problem the United States also faced during the Vietnam War, the Korean War and World War II. The current tightness is as severe as it was at the end of World War II. This mismatch causes companies and consumers alike to feel as though the economy is in a rut, said Pascal Michaillat, an economist at Brown University.

    “For shopkeepers, it means operating shorter hours because it’s not possible to find workers to fill the extra time slots,” he said. “For households, it means more time trying to hire nannies or plumbers or construction workers and less time doing enjoyable things.”

    Based on his calculations on job openings and employment from a 2022 paper written with the economist Emmanuel Saez, Michaillat estimates that a 4.6% unemployment rate would make the labor market efficient. At that rate, the day-to-day transactions that shape an economy would have less friction because the demand for workers would be closer to the supply. Government figures released Tuesday show that employers have 9.9 million job openings, almost double the number of unemployed people seeking work.

    This sounds like a good problem to have because it implies wages should increase. But economic theory suggests the only way to resolve this situation is for unemployment to rise.

    Asked what this dilemma might mean for Biden, Michaillat suggested, “The economics is mingling with the politics, as it so often does.”

    When Republicans criticize Biden, it is often for the kinds of shortages that Michaillat is describing, as well as for inflation.

    House Ways and Means Committee Chairman Jason Smith, R-Mo., said small-business owners “are telling us that Democrats’ anti-work policies have made it difficult to stock their shelves, hire workers and keep their doors open.”

    More than two years after Biden’s $1.9 trillion coronavirus relief package became law, it’s a humbling frustration for the White House that so many people feel the economy is terrible when his record on jobs is unrivaled among modern presidencies.

    Biden’s unemployment rate so far is better than that of Presidents Ronald Reagan, Bill Clinton, Barack Obama, Jimmy Carter, Gerald Ford and both Bushes. While unemployment was lower for a period under Presidents Lyndon Johnson and Richard Nixon, a smaller share of people was in the labor force compared with now.

    Biden set out to use the COVID-19 aid dollars to get people back to work quickly and prevent the typical “scarring” in recessions that can leave people earning less for the rest of their careers and, in some cases, permanently jobless. He succeeded at that mission as the economy has about 4 million more jobs than the Congressional Budget Office forecasted it would at this stage.

    A White House official said the policies were designed with the specific goal of bringing jobs back faster than in past recoveries. After the Great Recession began at the end of 2007 and the economy crashed, it took more than six years for the total number of U.S. jobs to return to pre-downturn levels. In the pandemic recovery, the jobs total rebounded to its prior level in a little over two years.

    The quickness of the rebound has benefited historically disadvantaged groups. Black unemployment in March dropped to 5%, the lowest level on record. And the Black labor force participation rate — which measures how many people have jobs or are searching for work — surpassed the level for whites last month.

    The official, who spoke on condition of anonymity to discuss private conversations, said Biden’s goal was to spur a burst of hiring that would cause strong growth in the long term. If the jobs recovery had dragged on, some people would give up hope and drop out of the labor force, reducing the ability of the economy to grow for decades to come.

    Biden has rejected criticisms that the size of COVID relief contributed to inflation, although research published by the New York Fed indicates that federal aid accounted for about one-third of the higher inflation from late 2019 to June 2022.

    Nick Bunker, economic research director at Indeed Hiring Lab, said Friday’s jobs report indicated the unemployment rate is unlikely to surge in the next three months. He said that the hiring is still in excess of population gains.

    He noted the strength of the job growth compared with the Great Recession, but said many people are still adjusting to the realities of higher inflation and the aftermath of the pandemic.

    “There are clear benefits to the speed of this recovery,” Bunker said. “Speed is great because it gets you to your destination, but it can be unsettling because there’s a whiplash.”

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  • Yields, expectations for rate hikes rise after jobs report

    Yields, expectations for rate hikes rise after jobs report

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    NEW YORK — Yields are rising in the U.S. bond market Friday following a highly anticipated report on the U.S. job market.

    The U.S. stock market is closed in observance of Good Friday, as are many markets across Europe. That leaves the U.S. bond market as one of the few open to react to the latest jobs update, which showed hiring lost a bit more momentum than expected last month but largely remained resilient.

    The data was so anticipated because it could offer a big clue for the Federal Reserve, which faces a tough decision on interest rates that will affect the entire economy. Should it keep raising rates in order to drive down inflation that’s still high? Or should it hold off given all the signs of slowing across the economy and stress in the banking system that’s already been caused by the past year’s swift surge in rates?

    The immediate reaction from the bond market Friday morning seemed to lean toward another hike. Not only did yields rise for Treasurys, so did bets for the Fed to raise rates by another quarter of a percentage point in May at its next meeting.

    The yield on the 10-year Treasury climbed to 3.36% from 3.30% late Thursday, as of 9:30 a.m. Eastern time. The two-year yield, which tends to move more on expectations for the Fed, rose to 3.94% from 3.83%.

    Friday’s jobs report showed that employers added 236,000 jobs last month, a slowdown from February’s 326,000 and slightly below economists’ expectations. Wages, meanwhile, grew 0.3% from February to match expectations. But year-over-year wage gains slowed to 4.2% from 4.6%.

    A cooler job market is exactly what the Fed has been hoping for. Raising rates is one of the Fed’s most effective tools to undercut inflation, but it’s a notoriously blunt one that works only by slowing the entire economy. That raises the risk of a recession and hurts prices for stocks, bonds and other investments.

    “The labor market is getting winded,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “Payroll gains are still high, but the aggregate hours worked have fallen two months in a row. The payroll gains are not as broad-based as they used to be and hours are getting cut.”

    Jacobsen said he doesn’t see reason for the Fed to hike rates based on the jobs report alone, and he said next week’s update on inflation may be more important.

    Friday’s jobs report follows a string of reports on the economy this week that showed flagging momentum. A measure of health for the U.S. manufacturing industry contracted by its worst level since the summer of 2020, when the pandemic was wrecking the global economy. A separate measure of the U.S. services industries was weaker than expected, while employers posted fewer job openings across the country.

    Many economists see a recession later this year or next as the most likely outcome. But some economists say a narrow possibility still exists where the Fed could raise rates just enough to get inflation fully under control without causing a severe recession.

    Also complicating things for the Fed is the belief in the bond market that the central bank will have to cut interest rates later this year in order to prop up the economy.

    Such cuts can act like steroids for financial markets and relax conditions for the economy, but they also can give inflation more oxygen. The Fed has so far consistently said it sees no rates cuts this year because it doesn’t want to let off the fight against inflation too early.

    “Below-trend job growth and a modest rise in the unemployment rate is what the Fed is aiming for, but the weakening labor market supports the recession narrative and reinforce markets expectations of rate cuts,” said EY Chief Economist Gregory Daco.

    Before the release of the U.S. jobs report, stocks rose across much of Asia.

    Stocks in Shanghai gained 0.4%, Tokyo’s Nikkei 225 advanced 0.2% and the Kospi in Seoul rose 1.3%. Bangkok, Taiwan and Malaysia also gained.

    ___ AP Business Writer Joe McDonald contributed.

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  • Are inflation pressures easing? Jobs report may offer clues

    Are inflation pressures easing? Jobs report may offer clues

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    WASHINGTON — For more than a year, the Federal Reserve’s inflation fighters have been tightening their grip on the American economy with nine straight interest rate hikes. A key goal has been to slow the sizzling pace of hiring to help cool price pressures.

    So far, the job market has refused to crack.

    Hiring was surprisingly robust in both January and February, confounding forecasters. The unemployment rate remains barely above half-century lows.

    The latest economic signs, though, increasingly suggest that an economic slowdown may be upon us. Employers are posting fewer job openings. More Americans are lining up for unemployment aid. Manufacturers are in retreat. America’s trade with the rest of the world is shrinking. And though restaurants, retailers and other services companies are still growing, they are doing so more slowly.

    “The economic data seem to show the economy slowing down dramatically in the first quarter of 2023, bolstering the hopes of Fed officials that less demand will somehow bring inflation down,″ Christopher Rupkey, chief economist at the research firm FWDBONDS LLC, wrote this week.

    On Friday morning, the government will reveal whether the recent signs of weakness have finally caused hiring managers to begin a retreat. The Labor Department is expected to report that employers added 240,000 jobs in March, according to a survey of economists by the data firm FactSet.

    That would be down from 504,000 jobs in January and 311,000 in February. But it would probably still be too much for the Fed, which might conclude that the pace of hiring is still putting upward pressure on wages and prices and that further interest rates hikes are necessary.

    For Fed officials, taming inflation is Job One. They were slow to respond after consumer prices started surging in the spring of 2021, concluding that it was only a temporary consequence of supply bottlenecks caused by the economy’s surprisingly explosive rebound from the pandemic recession.

    Only in March 2022 did the Fed begin raising its benchmark rate from near zero. In the past year, though, it has raised rates more aggressively than it had since the 1980s to attack the worst inflation bout since then.

    And as borrowing costs have risen, inflation has steadily eased. The latest year-over-year consumer inflation rate — 6% — is well below the 9.1% rate it reached last June. But it’s still considerably above the Fed’s 2% target.

    Complicating matters is turmoil in the financial system. Two big American banks failed in March, and higher rates and tighter credit conditions could further destabilize banks and depress borrowing and spending by consumers and businesses.

    The Fed is aiming to achieve a so-called soft landing — slowing growth just enough to tame inflation without causing the world’s biggest economy to tumble into recession. Most economists doubt it will work; they expect a recession later this year.

    So far, the economy has proved resilient in the face of ever-higher borrowing costs. America’s gross domestic product — the economy’s total output of goods and services — expanded at a healthy pace in second half of 2022. Yet recent data suggests that the economy is losing momentum.

    On Monday, the Institute for Supply Management, an association of purchasing managers, reported that U.S. manufacturing activity contracted in March for a fifth straight month. Two days later, the ISM said that growth in services, which accounts for the vast majority of U.S. employment, had slowed sharply last month.

    On Wednesday, the Commerce Department reported that U.S. exports and imports both fell in February in another sign that the global economy is weakening.

    The Labor Department on Thursday said it had adjusted the way it calculates how many Americans are filing for unemployment benefits. The tweak added nearly 100,000 claims to its figures for the past two weeks and might explain why heavy layoffs in the tech industry this year had yet to show up on the unemployment rolls.

    The Labor Department also reported this week that employers posted 9.9 million job openings in February, the fewest since May 2021 but still far higher than anything seen before 2021.

    In its quest for a soft landing, the Fed has expressed hope that employers would ease wage pressures by advertising fewer vacancies rather than by cutting many existing jobs. The Fed also hopes that more Americans will start looking for work, thereby adding to the supply of labor and reducing pressure on employers to raise wages.

    The unemployment rate can tick up when more people look for jobs and can’t find them right away. That’s because only people who are actively looking for a job are counted as unemployed.

    Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said that “a rise in payrolls close to (200,000), a modest uptick in the unemployment rate — on a rise in the civilian labor force — and a deceleration in average hourly earnings would be a ‘Goldilocks’ scenario from the Fed’s perspective.”

    It would indicate, Farooqi said, “that the threat from wages to inflation is diminishing.”

    On the other hand, she said, a March hiring gain closer to 300,000 would suggest that the Fed needs to do more to fight inflation.

    “We don’t really have an accurate way to assess how the labor market is going to evolve in response to tighter monetary policy,” Farooqi said. “We have been expecting a loosening in labor market conditions for some time. Maybe that is now imminent.”

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  • Applications for jobless aid rising but still at low levels

    Applications for jobless aid rising but still at low levels

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    The number of Americans seeking unemployment aid was higher over the past few months than the government had initially reported, reflecting a modest rise in layoffs as the economy has slowed in the face of higher interest rates.

    The Labor Department reported Thursday that the number of applications has exceeded 200,000 since early February — above previous estimates, though still relatively low by historical standards.

    The department has revised its estimates of the number of weekly applications for jobless benefits under a new formula it is using to reflect seasonal adjustments. The new formula is intended to more accurately capture seasonal patterns in job losses.

    For the week that ended April 1, the number of Americans applying for jobless aid was 228,000, the government estimated. That was down from 246,000 in the previous week and 247,000 in the week before that. Using its new seasonal adjustment formula, the government revised up each of those figures by nearly 50,000.

    “The trend in seasonally adjusted initial claims is noticeably higher than previously estimated, which does suggest that the flurry of layoff announcements so far this year has begun to show up in these data,” Stephen Stanley, chief U.S. economist of Santander U.S. Capital Markets, wrote in a research note.

    First-time applications for unemployment benefits serve as a proxy for the number of job cuts because most people who are laid off file for jobless aid. About 1.82 million people were receiving jobless aid in the week that ended March 25, an increase of 6,000 from the week before.

    The job market appears to be finally showing some signs of softening, more than a year after the Federal Reserve began an aggressive campaign to cool inflation by steadily raising its benchmark borrowing rate.

    On Tuesday, the Labor Department reported that U.S. job openings slipped to 9.9 million in February, the fewest since May 2021. And on Wednesday, the payroll firm ADP reported that the nation’s private employers added 145,000 jobs in March, down sharply from 261,000 in February. Pay raises also weakened for workers, according to the ADP Research Institute.

    ADP’s figures often diverge, from month to month, from the government’s more comprehensive jobs report, which provides a more granular review of the labor market, though the two tend to converge over time. On Friday, when the government issues the March jobs report, analysts expect it to show that employers added a solid 240,000 jobs last month.

    In February, the government reported, employers added a robust 311,000 jobs, fewer than January’s huge gain but enough to keep pressure on the Fed to keep raising rates to fight inflation. The unemployment rate rose to 3.6%, from a 53-year low of 3.4%.

    In its latest quarterly projections, the Fed predicts that the unemployment rate will rise to 4.5% by year’s end, a sizable increase historically associated with recessions.

    Layoffs have been mounting in the technology sector, where many companies hired aggressively during the pandemic. IBM, Microsoft, Salesforce, Twitter and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November.

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  • Asian shares mostly fall amid worries about slowing economy

    Asian shares mostly fall amid worries about slowing economy

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    TOKYO — Asian shares were trading mostly lower Thursday as investors turned their attention to upcoming earnings reports and other economic indicators.

    Japan’s benchmark Nikkei 225 shed 1.3% in afternoon trading to 27,439.88. Australia’s S&P/ASX 200 slipped 0.4% to 7,208.10. South Korea’s Kospi fell 1.4% to 2,461.12. Hong Kong’s Hang Seng lost 0.4% to 20,204.33. The Shanghai Composite slipped less than 0.1% to 3,311.55.

    While efforts to cool inflation by raising interest rates are designed to slow overheated economies, the worry is that central bank policymakers might overdo it, leading to recession.

    Many regional economies are seeing weakness in exports due to softer demand in major markets like the United States. That has dulled the impact of a rebound in China as its economy recovers from pandemic-related disruptions.

    Stocks on Wall Street mostly slipped Wednesday following the latest signals that the U.S. economy is slowing under the weight of much higher interest rates.

    “Wall Street is realizing that you need a strong economy to keep stocks heading higher,” Edward Moya of Oanda said in a commentary. “The US economy is clearly in slowdown mode and expectations should be for further labor market weakness.”

    The S&P 500 dipped 0.2% to 4,090.38 and the Dow Jones Industrial Average rose 0.2% to 33,482.72. But the Nasdaq composite dropped 1.1% to 11,996.86.

    One report from the Institute for Supply Management said that growth in the U.S. services sector slowed last month by more than economists expected, as the pace of new orders cooled. A separate report suggested private employers added 145,000 jobs in March, down sharply from February’s 261,000. Perhaps more importantly for markets, pay raises also weakened for workers, according to the ADP Research Institute.

    ADP’s private payroll report could offer a preview of what Friday’s more comprehensive jobs report from the U.S. government will show. Economists expect it to say employers added 240,000 jobs last month, down from 311,000 in February.

    If the job market really is slowing from the strong growth that’s helped to prop up the larger economy recently, it could offer the Fed reason to pause on its hikes to interest rates.

    That’s a big deal for markets not only because it could lessen the odds of an upcoming recession, which some economists already see as a high probability. Higher rates also drag on prices for stocks, bonds and other investments.

    Other reports on the economy this week also came in weaker than expected, including readings on the number of job openings across the country and the health of the manufacturing sector.

    The reports have traders increasing bets for the Fed to hold rates steady at its next meeting in May, which would be the first time that’s happened in more than a year. Many traders are also betting the Fed will have to cut rates later this year, something that can act like steroids for markets.

    The Fed, though, has consistently said it doesn’t expect to cut rates this year.

    On the winning side Wednesday was Johnson & Johnson, which rose 4.5% after it proposed to pay nearly $9 billion to cover allegations that its baby powder containing talc caused cancer. It was one of the biggest drivers of the Dow Jones Industrial Average’s gain for Wednesday.

    In the bond market, the yield on the 10-year Treasury dipped to 3.30% from 3.34% late Tuesday. It helps set rates for mortgages and other loans. The two-year yield, which tends to move more on expectations for the Fed, slipped to 3.80% from 3.82%.

    Gold held relatively steady and dipped $2.60 to settle at $2,035.60 per ounce. It’s up more than 11% amid worries about the strength of the global banking system.

    In other trading, benchmark U.S. crude fell 58 cents to $80.03 a barrel in electronic trading on the New York Mercantile Exchange. It lost 10 cents to $80.61 on Wednesday. Brent crude, the international standard, fell 56 cents to $84.43 a barrel.

    The U.S. dollar inched down to 131.24 Japanese yen from 131.30 yen. The euro cost $1.0896, down from $1.0908.

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  • Asian shares mostly fall amid worries about slowing economy

    Asian shares mostly fall amid worries about slowing economy

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    TOKYO — Asian shares were trading mostly lower Thursday as investors turned their attention to upcoming earnings reports and other economic indicators.

    Japan’s benchmark Nikkei 225 shed 1.3% in afternoon trading to 27,439.88. Australia’s S&P/ASX 200 slipped 0.4% to 7,208.10. South Korea’s Kospi fell 1.4% to 2,461.12. Hong Kong’s Hang Seng lost 0.4% to 20,204.33. The Shanghai Composite slipped less than 0.1% to 3,311.55.

    While efforts to cool inflation by raising interest rates are designed to slow overheated economies, the worry is that central bank policymakers might overdo it, leading to recession.

    Many regional economies are seeing weakness in exports due to softer demand in major markets like the United States. That has dulled the impact of a rebound in China as its economy recovers from pandemic-related disruptions.

    Stocks on Wall Street mostly slipped Wednesday following the latest signals that the U.S. economy is slowing under the weight of much higher interest rates.

    “Wall Street is realizing that you need a strong economy to keep stocks heading higher,” Edward Moya of Oanda said in a commentary. “The US economy is clearly in slowdown mode and expectations should be for further labor market weakness.”

    The S&P 500 dipped 0.2% to 4,090.38 and the Dow Jones Industrial Average rose 0.2% to 33,482.72. But the Nasdaq composite dropped 1.1% to 11,996.86.

    One report from the Institute for Supply Management said that growth in the U.S. services sector slowed last month by more than economists expected, as the pace of new orders cooled. A separate report suggested private employers added 145,000 jobs in March, down sharply from February’s 261,000. Perhaps more importantly for markets, pay raises also weakened for workers, according to the ADP Research Institute.

    ADP’s private payroll report could offer a preview of what Friday’s more comprehensive jobs report from the U.S. government will show. Economists expect it to say employers added 240,000 jobs last month, down from 311,000 in February.

    If the job market really is slowing from the strong growth that’s helped to prop up the larger economy recently, it could offer the Fed reason to pause on its hikes to interest rates.

    That’s a big deal for markets not only because it could lessen the odds of an upcoming recession, which some economists already see as a high probability. Higher rates also drag on prices for stocks, bonds and other investments.

    Other reports on the economy this week also came in weaker than expected, including readings on the number of job openings across the country and the health of the manufacturing sector.

    The reports have traders increasing bets for the Fed to hold rates steady at its next meeting in May, which would be the first time that’s happened in more than a year. Many traders are also betting the Fed will have to cut rates later this year, something that can act like steroids for markets.

    The Fed, though, has consistently said it doesn’t expect to cut rates this year.

    On the winning side Wednesday was Johnson & Johnson, which rose 4.5% after it proposed to pay nearly $9 billion to cover allegations that its baby powder containing talc caused cancer. It was one of the biggest drivers of the Dow Jones Industrial Average’s gain for Wednesday.

    In the bond market, the yield on the 10-year Treasury dipped to 3.30% from 3.34% late Tuesday. It helps set rates for mortgages and other loans. The two-year yield, which tends to move more on expectations for the Fed, slipped to 3.80% from 3.82%.

    Gold held relatively steady and dipped $2.60 to settle at $2,035.60 per ounce. It’s up more than 11% amid worries about the strength of the global banking system.

    In other trading, benchmark U.S. crude fell 58 cents to $80.03 a barrel in electronic trading on the New York Mercantile Exchange. It lost 10 cents to $80.61 on Wednesday. Brent crude, the international standard, fell 56 cents to $84.43 a barrel.

    The U.S. dollar inched down to 131.24 Japanese yen from 131.30 yen. The euro cost $1.0896, down from $1.0908.

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  • Asian shares mixed after Wall St dips on weak economic data

    Asian shares mixed after Wall St dips on weak economic data

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    TOKYO — Asian shares were trading mixed Wednesday following a decline on Wall Street after reports on the U.S. economy came in weaker than expected.

    Japan’s benchmark Nikkei 225 lost 1.7% in afternoon trading to 27,808.75. Australia’s S&P/ASX 200 stood little changed, inching down less than 0.1% to 7,232.60. South Korea’s Kospi added 0.5% to 2,493.83. Trading was closed in Hong Kong and Shanghai for the Qingming Festival, a holiday.

    New Zealand’s benchmark fell 0.3% after the central bank surprised economists by imposing an aggressive half-point rate rise to bring its policy interest rate to 5.25%. It was the Reserve Bank of New Zealand’s 11th straight rate hike as it tries to cool inflation, which is running at 7.2%, far above the bank’s target level of around 2%.

    Central banks have diverged somewhat in adjusting interest rates to reflect the latest trends in their economies. On Tuesday, Australia’s central bank kept its rate at 3.6%, citing a need for time to assess where the economy is headed as inflation moderates.

    On Wall Street, the S&P 500 dropped 0.6% to 4,100.60, breaking a four-day winning streak. The Dow Jones Industrial Average fell 0.6%, to 33,402.38. The Nasdaq composite sank 0.5% to 12,126.33.

    Investors are still split on whether the U.S. economy will fall into a recession and how badly corporate profits might drop. The biggest question remains what the Federal Reserve will do next with interest rates after hiking them furiously over the last year to get high inflation under control.

    The reports on job openings and factory orders released Tuesday may have heightened recession fears. But they may also give the Fed reason to hold rates steady at its next meeting, for the first time in more than a year, offering a possible upside for markets.

    One report showed employers advertised 9.9 million job openings in February, a sharper fall-off than economists expected. The Fed has been paying close attention to the numbers because the job market has remained so strong despite higher rates. The hope is that a softening in the number of openings could take some pressure off inflation without having to throw many people out of work.

    A separate report showed that factory orders weakened in February more than economists expected.

    A potentially more impactful report will arrive with Friday’s update on how many jobs were created across the country last month.

    Traders flipped bets back toward the Fed holding steady on rates at its meeting next month. A day earlier, a slight majority was betting on another increase in rates. That helped yields in the bond market to fall.

    The yield on the 10-year Treasury fell to 3.34% from 3.42% late Monday. It helps set rates for mortgages and other important loans. The two-year Treasury, which moves more on expectations for the Fed, dropped to 3.82% from 3.97%.

    Longer term, there seems to be more confidence on Wall Street that the Fed will have to cut rates later this year.

    Tuesday’s weaker-than-expected readings on the economy follow a report on Monday that showed U.S. manufacturing continues to shrink faster than economists forecast.

    On Wall Street, shares of Virgin Orbit plunged 23.2% to 15 cents after the company filed for Chapter 11 bankruptcy protection. It’s been contending with the fallout of a failed mission this year and increasing difficulty in raising funding for future missions.

    Stocks in industries whose profits are closely tied to the strength of the economy also fell more than the rest of the market, such as industrial and energy companies. Valero Energy fell 8% for one of the biggest losses in the S&P 500.

    In other trading Wednesday, benchmark U.S. crude gained 33 cents to $81.04 a barrel in electronic trading on the New York Mercantile Exchange. It rose 29 cents to $80.71 per barrel on Tuesday. Brent crude, the international standard, rose 40 cents to $85.34 per barrel in London.

    The U.S. dollar slipped to 131.52 Japanese yen from 131.71 yen. The euro cost $1.0954, up from $1.0951.

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  • Asian shares mixed after Wall St dips on weak economic data

    Asian shares mixed after Wall St dips on weak economic data

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    TOKYO — Asian shares were trading mixed Wednesday following a decline on Wall Street after reports on the U.S. economy came in weaker than expected.

    Japan’s benchmark Nikkei 225 lost 1.7% in afternoon trading to 27,808.75. Australia’s S&P/ASX 200 stood little changed, inching down less than 0.1% to 7,232.60. South Korea’s Kospi added 0.5% to 2,493.83. Trading was closed in Hong Kong and Shanghai for the Qingming Festival, a holiday.

    New Zealand’s benchmark fell 0.3% after the central bank surprised economists by imposing an aggressive half-point rate rise to bring its policy interest rate to 5.25%. It was the Reserve Bank of New Zealand’s 11th straight rate hike as it tries to cool inflation, which is running at 7.2%, far above the bank’s target level of around 2%.

    Central banks have diverged somewhat in adjusting interest rates to reflect the latest trends in their economies. On Tuesday, Australia’s central bank kept its rate at 3.6%, citing a need for time to assess where the economy is headed as inflation moderates.

    On Wall Street, the S&P 500 dropped 0.6% to 4,100.60, breaking a four-day winning streak. The Dow Jones Industrial Average fell 0.6%, to 33,402.38. The Nasdaq composite sank 0.5% to 12,126.33.

    Investors are still split on whether the U.S. economy will fall into a recession and how badly corporate profits might drop. The biggest question remains what the Federal Reserve will do next with interest rates after hiking them furiously over the last year to get high inflation under control.

    The reports on job openings and factory orders released Tuesday may have heightened recession fears. But they may also give the Fed reason to hold rates steady at its next meeting, for the first time in more than a year, offering a possible upside for markets.

    One report showed employers advertised 9.9 million job openings in February, a sharper fall-off than economists expected. The Fed has been paying close attention to the numbers because the job market has remained so strong despite higher rates. The hope is that a softening in the number of openings could take some pressure off inflation without having to throw many people out of work.

    A separate report showed that factory orders weakened in February more than economists expected.

    A potentially more impactful report will arrive with Friday’s update on how many jobs were created across the country last month.

    Traders flipped bets back toward the Fed holding steady on rates at its meeting next month. A day earlier, a slight majority was betting on another increase in rates. That helped yields in the bond market to fall.

    The yield on the 10-year Treasury fell to 3.34% from 3.42% late Monday. It helps set rates for mortgages and other important loans. The two-year Treasury, which moves more on expectations for the Fed, dropped to 3.82% from 3.97%.

    Longer term, there seems to be more confidence on Wall Street that the Fed will have to cut rates later this year.

    Tuesday’s weaker-than-expected readings on the economy follow a report on Monday that showed U.S. manufacturing continues to shrink faster than economists forecast.

    On Wall Street, shares of Virgin Orbit plunged 23.2% to 15 cents after the company filed for Chapter 11 bankruptcy protection. It’s been contending with the fallout of a failed mission this year and increasing difficulty in raising funding for future missions.

    Stocks in industries whose profits are closely tied to the strength of the economy also fell more than the rest of the market, such as industrial and energy companies. Valero Energy fell 8% for one of the biggest losses in the S&P 500.

    In other trading Wednesday, benchmark U.S. crude gained 33 cents to $81.04 a barrel in electronic trading on the New York Mercantile Exchange. It rose 29 cents to $80.71 per barrel on Tuesday. Brent crude, the international standard, rose 40 cents to $85.34 per barrel in London.

    The U.S. dollar slipped to 131.52 Japanese yen from 131.71 yen. The euro cost $1.0954, up from $1.0951.

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  • Wall Street opens flat ahead of this week’s labor data

    Wall Street opens flat ahead of this week’s labor data

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    Stocks are opening flat on Wall Street Tuesday as investors brace for the first of three government employment reports coming this week. The S&P 500 and Nasdaq are up 0.1% at the open, and the Dow Jones Industrial Average is unchanged. Data on job openings in February is due to be reported this morning, with economists forecasting about 10.4 million. Along with the weekly unemployment report on Thursday and the March jobs report on Friday, the data could paint a sharper picture of the U.S. labor market for the Federal Reserve to consider at its next meeting.

    THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

    Wall Street pointed modestly higher Tuesday ahead of the first of three government employment reports this week which could draw a sharper outline of the U.S. employment situation ahead of the Federal Reserve’s next meeting.

    Futures for the benchmark S&P 500 rose about 0.3%, while the Dow industrials inched up less than 0.2%.

    On Tuesday, the U.S. reports on the number of job openings in February. That’s followed by the weekly unemployment report on Thursday and the March jobs report on Friday.

    A strong job market, on top of four-decade high inflation, has pushed policymakers at the Federal Reserve to raise the central bank’s main borrowing rate nine consecutive times since last March. In its latest quarterly economic projections, the policymakers forecast that they expect to raise their key rate just once more — from its new level of about 4.9% to 5.1%, the same peak they had projected in December.

    At its policy meeting last month, the Fed raised its key interest rate by a quarter-point despite concerns that higher borrowing rates could worsen the turmoil that has gripped the banking system in recent weeks.

    On the international front, the Paris-based Organization for Economic Cooperation and Development reported inflation in leading economies fell to 8.8% in February from 9.2% in January. Inflation rates remained above 20% in Hungary, Latvia and Turkey, but overall, inflation fell in 23 of the 38 OECD economies.

    Easing energy prices were a major factor, though oil prices have surged after producing countries announced Sunday they will cut output from May 1 through the end of the year. That could potentially slow broader efforts to tame inflation.

    In Europe at midday, Germany’s DAX gained 0.9% and the CAC 40 in Paris was 0.6% higher while Britain’s FTSE 100 was essentially flat.

    The S&P/ASX 200 in Sydney edged 0.2% higher to 7,236.00 after Australia’s central bank kept its key interest rate unchanged at 3.60%

    “The Board took the decision to hold interest rates steady this month to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook,” the Reserve Bank of Australia said in a statement, citing the usual lag between interest rate changes and their impacts.

    While Australia’s economy is much smaller than that of the U.S. or European Union, its central bank and that of New Zealand tend to “set the tone for monetary policy cycles,” Ipek Ozkardeskaya of Swissquote.com said in a commentary.

    South Korea reported its consumer inflation rate fell to a lower-than-expected 4.2% in March from a year earlier from 4.8% the month before. That has raised expectations that the central bank will keep its key interest rate at 3.5% when it meets next week.

    Regional central banks have been varying their strategies as inflation wanes in some places but remains stubbornly high in others. Vietnam’s central bank eased its benchmark rate on Monday to reflect a slowdown in the economy. Japan has kept its key interest rate at minus 0.1% and China has been easing credit to alleviate pressures on its vital property sector.

    The Reserve Bank of New Zealand was due to make a decision on interest rates on Wednesday.

    Elsewhere in Asia, Tokyo’s Nikkei 225 gained 0.4% to 28,287.42, while the Shanghai Composite index picked up 0.5% to 3,312.56. Hong Kong’s Hang Seng lost 0.7% to 20,274.59.

    Shares fell in Bangkok. Markets were closed in India and Taiwan.

    A barrel of U.S. crude oil was 68 cents higher at $81.10 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $4.75 to settle at $80.42 on Monday after Saudi Arabia and other producers said they’ll cut production by 1.15 million barrels per day from May until the year’s end. Less oil pumped means higher prices, as long as demand stays steady.

    Brent crude, the international standard, rose 67 cents to $85.60 in London. It gained $5.04 to $84.93 per barrel on Monday and is roughly back to where it was a month ago.

    In other trading Tuesday, the U.S. dollar rose to 132.97 Japanese yen from 132.44 yen late Monday. The euro ticked down to $1.0904 from $1.0905.

    Shares in Virgin Orbit tumbled another 22% to 15 cents a share on Tuesday after the Richard Branson company filed for Chapter 11 bankruptcy protection. A failed mission this year and increasing difficulty in raising funding for future missions forced the company to lay off most of its staff last week.

    On Monday, big gains for energy stocks helped offset losses for some big technology stocks on Wall Street. The S&P 500 rose 0.4% and the Dow Jones Industrial Average gained 1%. The Nasdaq composite lost 0.3%.

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  • This week: hiring, employment and services sector data

    This week: hiring, employment and services sector data

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    The U.S. government will release a closely watched report on job openings Tuesday

    A look at some of the key business events and economic indicators upcoming this week:

    Still hiring?

    The U.S. government will release a closely watched report on job openings Tuesday.

    Economists expect the Labor Department’s data for job openings to dip slightly in February, which would mark a second straight decline. The data is being watched by investors and the Federal Reserve as a gauge of the broader employment market’s health amid rising interest rates and high inflation. The labor market has remained resilient while other parts of the economy have weakened.

    Job Openings by month (millions)

    September 10.69

    October 10.47

    November 10.75

    December 11.23

    January 10.82

    February (est.) 10.45

    Source: FactSet.

    Services assessment

    The Institute for Supply Management releases its latest report on the services sector on Wednesday.

    The sector employs most Americans and its health provides more insight into the broader economy. Economists expect the monthly index to show growth in March at a relatively stable pace. The index has show growth since the start of 2023 after contracting to close out 2022. Readings above 50 signal growth. The sector has remained resilient despite pressure from inflation.

    ISM Services PMI (seasonally adjusted)

    October 54.5

    November 55.5

    December 49.2

    January 55.20

    February 55.1

    March (est.) 53.8

    Source: FactSet

    Eyes on employment

    The government releases its monthly employment report for March on Friday.

    The report is being closely monitored by Wall Street and the Federal Reserve to see how the employment market is reacting to inflation and interest rate hikes. The job market has remained strong, which is good for workers, but makes it more difficult for the Fed to tame inflation. The central bank is hoping to see the employment market soften as a signal that inflation is easing.

    Nonfarm payrolls (seasonally adjusted)

    October: 324,000

    November: 290,000

    December: 239,000

    January: 504,000

    February (est.): 311,000

    March (est.): 200,000

    Source: FactSet

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  • Kimberly Palmer: How to use a tax refund to fight inflation

    Kimberly Palmer: How to use a tax refund to fight inflation

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    If inflation has eaten away at your budget the way waves erode a beach, then your tax refund might just provide a much-needed protective barrier.

    As of March, prices are up 6% over the past 12 months, according to the most recent consumer price index. At the same time, just over half of filers (55%) are expecting tax refunds for the 2022 tax year, with an average expected refund of $2,205, according to the 2023 Nerdwallet Tax Report. Financial experts say consumers can use that windfall — which is really just a delayed paycheck that you already earned — to help offset the strain of those higher prices.

    “Tax refunds are going to arrive at just the right time for many consumers this spring,” says Drew Wessell, a certified financial planner at Fiduciary Financial Advisors in Grand Rapids, Michigan.

    UNLOAD HIGH-INTEREST DEBT

    With rising interest rates, variable-rate debt becomes more expensive — including credit cards. That’s why many financial experts put paying off debt at the top of the priority list, even considering it a type of investment.

    “Using your tax refund to pay off a credit card debt with a 20% interest rate gives you an instant, tax-free 20% return on that investment. It’s not a creative idea, but the math makes it the most impactful action that a consumer can take,” Wessell says.

    SAVE IN A HIGH-YIELD ACCOUNT

    Rising rates also mean rising yields on savings accounts, so you can save your refund and earn more on it. “If you already have a high-yield savings account, you can also look at CDs,” says Marguerita Cheng , a certified financial planner and the founder of Blue Ocean Global Wealth in Gaithersburg, Maryland. CDs, or certificates of deposit, offer higher yields in exchange for less liquidity.

    Wessell advises saving enough to start or boost an emergency fund, which could help you in the event of a sudden unexpected expense or job loss. “Life is full of surprises, and having an emergency fund helps you avoid going into another debt spiral,” he says.

    FUND LONG-TERM GOALS

    Because higher prices have cut into long-term savings goals like retirement and college, a refund can offer an opportunity to get back on track, Cheng says. “You don’t have to put a lot in, but it can be the seed money,” she adds, noting that her son is using his first refund as he begins his career to open a Roth IRA.

    Similarly, you could take care of other delayed financial tasks, such as buying life insurance. “Revisit your family situation,” Cheng urges, especially if you have younger children.

    UPGRADE YOUR HOME

    In many real estate markets, rising home prices along with the higher interest rates make it harder to buy your dream home. Instead, use your refund to improve your current home, suggests Ryan Greiser, a certified financial planner and the founder of the financial firm Opulus in Doylestown, Pennsylvania. New flooring, energy-efficient appliances or improved windows can boost your home’s energy efficiency as well as increase its value.

    “We love the idea of people loving the space they live in,” Greiser says, especially when they’re priced out of buying a new home.

    For your outdoor space, invest in a chicken coop and gardening supplies to harvest eggs and vegetables — all of which have become pricier at the grocery store — suggests Tim Melia, a certified financial planner who is the principal and financial planner at Embolden Financial Planning in Seattle. If you have neighbors with skills such as carpentry, you could barter with them for additional savings.

    CREATE MORE INCOME

    Remodeling a room in your home to create a rental unit could generate income that helps offset inflation for years, says Melia, who operates a couple of short-term lodging options through vacation rental website Airbnb. He says upfront investments could include better furniture and decor: “You want to be able to stand out.”

    Similarly, investing in yourself by taking classes for a new skill or certification could increase your income. “It increases your potential to earn and can allow you to step into a more lucrative career or take the next step in your existing career,” Melia adds.

    FIND SMALL WAYS TO TREAT YOURSELF

    While air travel and other bigger splurges might be prohibitively expensive, your refund can give you more affordable pleasures, even after taking care of other priorities, Cheng says. She indulges in listening to audiobooks (most recently “Spare” by Prince Harry). “I was getting anxiety watching the news at the gym, so instead, I listen to audiobooks,” she says.

    ADJUST YOUR WITHHOLDINGS

    Lastly, if you’re receiving a refund, it means you overpaid taxes in 2022. You might be better off adjusting your withholdings so you receive more in each paycheck instead. “If you’re getting more than $3,000, then you probably want to revisit your withholdings because that could be $200 to $300 a month,” Cheng says.

    And that could help offset those higher gas, restaurant or grocery bills all year long.

    This column was provided to The Associated Press by the personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice.

    ________________________

    Kimberly Palmer is a personal finance expert at NerdWallet and the author of “Smart Mom, Rich Mom.” Email: kpalmer@nerdwallet.com. Twitter: @KimberlyPalmer.

    RELATED LINK:

    NerdWallet: 2023 Tax Report https://bit.ly/nerdwallet-2023-tax-report

    METHODOLOGY:

    This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Dec. 6-8, 2022, among 2,041 U.S. adults 18 and older, among whom 1,777 will file a 2022 federal tax return. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level.

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  • US jobless aid claims fell last week as layoffs remain low

    US jobless aid claims fell last week as layoffs remain low

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    Fewer Americans applied for jobless claims last week as the labor market continues to thrive despite the Federal Reserve’s efforts to cool the economy and tamp down inflation.

    Applications for jobless claims in the U.S. for the week ending March 11 fell by 20,000 to 192,000 from 212,000 the previous week, the Labor Department said Thursday.

    The four-week moving average of claims, which flattens out some of week-to-week volatility, fell by 750 to 196,500, remaining below the 200,000 threshold for the eighth straight week.

    Applications for unemployment benefits are seen as a barometer for layoffs in the U.S.

    In a note to clients, analysts at Oxford economics said there are still few signs that the recent jump in layoff announcements, particularly in the tech sector, is translating to a rise in unemployment.

    “Many announced layoffs don’t end up happening, and those that have been laid off are quickly finding work elsewhere, reflecting the ongoing imbalance between labor demand and supply,” the analysts wrote.

    At its February meeting, the Fed raised its main lending rate by 25 basis points, the eighth straight rate hike in its year-long battle against stubborn inflation. With recent data showing that those rate hikes have done little to bring down inflation and even less to cool the economy and labor market, many analysts were expecting the Fed to raise rates by another half-point when it meets next week.

    However, the second- and third-largest bank failures in U.S. history over the last week — which have been blamed in large part to rising interest rates — have some economists thinking Fed officials will tread more lightly next week and either raise its rate by 25 basis points or perhaps not at all.

    The central bank’s benchmark rate is now in a range of 4.5% to 4.75%, its highest level in 15 years. Before the banking sector turmoil that began last week, the Fed had signaled that two more rate hikes were likely this year. Some analysts had even forecast three increases that could push the lower end of that rate to 5.5%.

    The Fed’s rate increases are meant to cool the economy, labor market and wages, thereby suppressing prices. But so far, none of those things have happened, at least not to the degree that the central bank had hoped.

    Inflation remains more than double the Fed’s 2% target, and the economy is growing and adding jobs at a healthy clip.

    Last month, the government reported that employers added a substantial 311,000 jobs in February, fewer than January’s huge gain but enough to keep pressure on the Federal Reserve to raise interest rates aggressively to fight inflation. The unemployment rate rose to 3.6%, from a 53-year low of 3.4%.

    Fed policymakers have forecast that the unemployment rate would rise to 4.6% by the end of this year, a sizable increase historically associated with recessions.

    Though the U.S. labor market remains strong, layoffs have been mounting in the technology sector, where many companies overhired after a pandemic boom. IBM, Microsoft, Amazon, Salesforce, Twitter and DoorDash have all announced layoffs in recent months.

    Earlier this week, Facebook parent Meta said it was slashing another 10,000 jobs, in addition to the 11,000 culled in November. The social media giant also said it would not fill 5,000 open positions.

    The real estate sector has taken the biggest hit from the Fed’s interest rate hikes. Higher mortgage rates — which have risen closer to 7% again in recent weeks — have slowed home sales for 12 straight months. That’s almost in lockstep with the Fed’s rate hikes that began last March.

    About 1.68 million people were receiving jobless aid the week that ended March 4, a decrease of 29,000 from the week before. That number is close to pre-pandemic levels.

    ——

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  • EXPLAINER: Next steps for Black reparations in San Francisco

    EXPLAINER: Next steps for Black reparations in San Francisco

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    SAN FRANCISCO — San Francisco supervisors have backed the idea of paying reparations to Black people, but whether members will agree to lump-sum payments of $5 million to every eligible person or to any of the more than 100 other recommendations made by an advisory committee won’t be known until later this year.

    The idea of Black reparations is not new, but the federal government’s promise of granting 40 acres and a mule to newly freed slaves was never realized. It wasn’t until George Floyd, a Black man, was killed in police custody in 2020 that reparations movements began spreading in earnest across the country.

    The state of California and the cities of Boston and San Francisco are among jurisdictions trying to atone not just for chattel slavery, but for decades of racist policies and laws that systemically denied Black Americans access to property, education and the ability to build generational wealth.

    WHAT IS THE ARGUMENT FOR REPARATIONS IN SAN FRANCISCO?

    Black migration to San Francisco soared in the 1940s because of shipyard work, but racially restrictive covenants and redlining limited where people could live. When Black residents were able to build a thriving neighborhood in the Fillmore, government redevelopment plans in the 1960s forced out residents, stripped them of their property and decimated Black-owned businesses, advocates say.

    Today, less than 6% of Black residents in San Francisco are Black yet they make up nearly 40% of the city’s homeless population.

    Supporters include the San Francisco NAACP, although it said the board should reject the $5 million payments and focus instead on reparations through education, jobs, housing, health care and a cultural center for Black people in San Francisco. The president of the San Francisco branch is the Rev. Amos C. Brown, who sits on both the statewide and San Francisco reparations panels.

    WHAT IS THE ARGUMENT AGAINST REPARATIONS?

    Critics say California and San Francisco never endorsed chattel slavery, and there is no one alive today who owned slaves or was enslaved. It is not fair for municipal taxpayers, some of whom are immigrants, to shoulder the cost of structural racism and discriminatory government policies, critics say.

    An estimate from Stanford University’s Hoover Institution, which leans conservative, has said it would cost each non-Black family in San Francisco at least $600,000 in taxes to pay for the costliest of the recommendations: The $5 million per-person payout, guaranteed income of at least $97,000 a year for 250 years, personal debt elimination and converting public housing into condos to sell for $1.

    A 2022 Pew Research Center survey found 68% of U.S. respondents opposed reparations compared with 30% in favor. Nearly 80% of Black people surveyed supported reparations. More than 90% of Republicans or those leaning Republican opposed reparations while Democrats and those leaning Democratic were divided.

    HOW WILL SAN FRANCISCO PAY FOR THIS?

    It’s not clear. The advisory committee that made the recommendations says it is not its job to figure out how to finance San Francisco’s atonement and repair.

    That would be up to local politicians, two of whom expressed interest Tuesday in taking the issue to voters. San Francisco Supervisor Matt Dorsey said he would back a ballot measure to enshrine reparations in the San Francisco charter as part of the budget. Shamann Walton, the supervisor leading the charge on reparations, supports that idea.

    WHAT ARE SOME OF THE OTHER REPARATIONS RECOMMENDATIONS?

    Recommendations in education include establishing an Afrocentric K-12 school in San Francisco; hiring and retaining Black teachers; mandating a core Black history and culture curriculum; and offering cash to at-risk students for hitting educational benchmarks.

    Recommendations in health include free mental health, prenatal care and rehab treatment for impoverished Black San Franciscans, victims of violent crimes and formerly incarcerated people.

    The advisory committee also recommends prioritizing Black San Franciscans for job opportunities and training, as well as finding ways to incubate Black businesses.

    WHAT HAPPENS NEXT?

    There is no deadline for supervisors to agree on a path forward. The board next plans to discuss reparations proposals in September, after the San Francisco African American Reparations Advisory Committee issues a final report in June.

    WHAT ABOUT REPARATIONS FROM THE STATE?

    In 2020, California became the first state to form a reparations task force. But nearly two years into its work, it still has yet to make key decisions on who would be eligible for payment and how much. The task force has a July 1 deadline to submit a final report of its reparations recommendations, which would then be drafted into legislation for lawmakers to consider.

    The task force has spent multiple meetings discussing time frames and payment calculations for five harms experienced by Black people, including government taking of property, housing discrimination and homelessness and mass incarceration. The task force is also debating state residency requirements.

    Previously, the state committee voted to limit financial reparations to people descended from enslaved or freed Black people in the U.S. as of the 19th century.

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  • Mandatory paid time off: ‘a strain’ for Illinois business

    Mandatory paid time off: ‘a strain’ for Illinois business

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    CHICAGO — Doug Knight’s family has owned Springfield amusement park Knight’s Action Park since 1930, himself for 43 of those years.

    The pandemic was a bear — Knight fought to keep his doors open, and when they closed for COVID-19, he pushed to reopen as soon as possible. Inflation, too, has been an obstacle. From inflatable inner tubes to chlorine for the pools, prices have risen for “everything we buy,” and now a new Illinois law represents “another bump on the road” for business owners, he says.

    On Monday, Illinois became one of three U.S. states to mandate paid time off “for any reason,” up to 40 hours per year for full-time employees. Small business owners in Illinois say they know the importance of taking care of their workers, but some view the paid leave requirement as a government-imposed burden.

    “When you hit the big bump and go off the cliff, what does that do for ya?” Knight said.

    The legislation takes effect on Jan. 1, 2024. Employees will accrue one hour of paid leave for every 40 hours worked up to 40 hours total, and can start using the time once they’ve worked for 90 days.

    Knight and his brother, a co-owner, mainly employ seasonal employees not covered by the measure, but they will have to provide paid leave for 10 year-round workers. The veteran business owner said he isn’t worried and will juggle whatever comes next, though consumers will ultimately pay the difference.

    But proponents argue the policy supports both business owners and workers, and that guaranteeing paid leave will foster a healthier, more productive workforce.

    “When folks have the kind of paid time off they need, they’re able to stay home when they’re sick,” said Molly Weston Williamson, who tracks paid leave policy at the research and advocacy group Center for American Progress.

    For business owners concerned that the law will cause added strain amid difficult economic conditions, Williamson pointed out that Chicago and Cook County have had similar ordinances in place since 2017, and fears of devastating economic consequences never panned out.

    In fact, “our economy can’t afford not to provide these benefits,” Williamson said. “We can’t afford to pay for folks who are losing their job. We can’t afford to pay for folks who are getting sicker because they’re not getting the care they need. We can’t afford the impacts on our health care system.”

    Rep. Jehan Gordon-Booth, a Peoria Democrat who sponsored the legislation, said at Monday’s bill signing that the law in particular will help low-wage workers, who are those less likely to have paid time off and who are disproportionately Black, Latino, and women.

    “Thanks to this measure, workers have the peace of mind that they can take care of themselves today without worrying about the consequences tomorrow,” Gordon-Booth said.

    Christell Frausto, a co-owner of TequilaRia Wine and Spirits in Peoria, said she sees paid leave as “an investment” and hopes other business owners will too.

    Frausto, 38, said she already accommodates employees needing flexibility for emergencies, illness or personal events. She opened the boutique-style store focused on specialty products including women-owned brands and organic, gluten-free or low-calorie options two years ago.

    The pandemic was a clear sign that prioritizing workers is a necessary strategy for business owners, said Frausto, who hopes the lead-up to the law taking effect will give them time to budget and prepare.

    “They’re part of my team,” she said of her employees. “My interest is to take care of them just as much as my customers. I have to make sure they have a balance in life and work.”

    For Sandy and Dave Schoenborn, a couple who own the Lincoln Theatre in Belleville, Illinois, the state mandate is a major concern. “I’m pretty worried,” Sandy Schoeborn said. “Unless business gets better, it’s gonna be a strain.”

    Paid leave is something employees should earn, not be entitled to, she said. “I can’t say no. If if I have a big event coming up and everybody decides to take off, I’m in a world of hurt.”

    Knight, the Springfield amusement park owner, said he does his best to take care of his employees. “If they have a reason, they can take off a day” without pay, he said.

    “Car broke down, mom’s sick, gotta take the dog to the vet… they’re all important to the staff. But you can’t close your business because everybody wants to take off cause there’s a concert,” he said.

    The pandemic, inflation, utility prices — “it just all seems to be piling up,” and mandatory paid leave is now another hurdle for business owners.

    “It just drives the cost up, drives the prices up, and the consumer pays the bill,” Knight said. ____

    Savage is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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  • Illinois enacts mandatory paid leave ‘for any reason’

    Illinois enacts mandatory paid leave ‘for any reason’

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    CHICAGO — Illinois will become one of three states to require employers to offer paid time off for any reason after Gov. J.B. Pritzker signed a law on Monday that will take effect next year.

    Starting Jan. 1, Illinois employers must offer workers paid time off based on hours worked, with no need to explain the reason for their absence as long as they provide notice in accordance with reasonable employer standards.

    Just Maine and Nevada mandate earned paid time time off and allot employees the freedom to decide how to use it, but Illinois’ law is further reaching, unencumbered by limits based on business size. Similarly structured regulations that require employers to offer paid sick leave exist in 14 states and Washington, D.C., but workers can only use that for health-related reasons.

    Illinois employees will accrue one hour of paid leave for every 40 hours worked up to 40 hours total, although the employer may offer more. Employees can start using the time once they have worked for 90 days. Seasonal workers will be exempt, as will federal employees or college students who work non-full-time, temporary jobs for their university.

    Pritzker signed the bill Monday in downtown Chicago, saying: “Too many people can’t afford to miss even a day’s pay … together we continue to build a state that truly serves as a beacon for families, and businesses, and good paying jobs.”

    Proponents say paid leave is key to making sure workers, especially low-income workers who are more vulnerable, are able to take time off when needed without fear of reprisal from an employer.

    But critics say the law will overburden small businesses already struggling to survive the post-pandemic era amid the high inflation that has gripped the nation for nearly two years.

    National Federation of Independent Business Illinois state director Chris Davis said that business owners are best positioned to work with their employees one-on-one to meet their needs.

    The new law is “a one-size-fits-all solution to a more intricate problem,” he said.

    Bill sponsor Rep. Jehan Gordon-Booth, a Peoria Democrat, said the bill is the product of years of negotiations with businesses and labor groups.

    “Everyone deserves the ability to take time off,” she said in a statement. “Whether it’s to deal with the illness of a family member, or take a step back for your mental health, enshrining paid leave rights is a step forward for our state.”

    “This is about bringing dignity to all workers,” she said at the signing.

    Ordinances in Cook County and Chicago that already require employers to offer paid sick leave have been in place since July 2017, and workers in those locations will continue to be covered by existing laws rather than the new state law.

    Any new local laws enacted after the state law takes effect must provide benefits that are greater or equal to the state law.

    Molly Weston Williamson, paid leave expert at the Center for American Progress, said the law “creates a strong foundation for employers to build from while generating a healthier, more productive workforce.”

    But Williamson added that while Illinois’ law is a step in the right direction, U.S. paid leave laws remain “wildly out of line with all of our economic peers internationally.”

    “In the United States, federal law does not guarantee anyone the right to even a single paid day off work. Not when you’re sick, not when you have a baby, not when your mom has a stroke. Not a single paid day,” she said.

    Joan Van, a server at an international hotel chain and single mother of three, currently has no paid time off.

    But the Belleville parent leader with Community Organizing and Family Issues said that knowing that she will have five days next year brings a smile to her face.

    “It’s going to help out a lot of people, a lot of mothers, a lot of single mothers at that,” she said.

    ____

    Savage is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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  • Is inflation still surging? Jobs report will provide clues

    Is inflation still surging? Jobs report will provide clues

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    WASHINGTON — A month ago, the government dropped a bombshell jobs report that showed that America’s employers added a sizzling half-million-plus positions in January — twice the December gain and far more than economists had expected.

    The February jobs report, to be released Friday, will be closely watched by economists who are eager to know whether the January blowout was a one-time blip or some sign of a strengthening economy.

    The answer could heavily influence what the Federal Reserve does in the coming months. A second month of robust hiring could amplify fears that inflation is re-accelerating after months in which it had appeared to be steadily easing. The Fed, in response, would likely pursue a more aggressive pace of rate hikes beginning with its next policy meeting in two weeks.

    Some economists say they think the central bank will announce a substantial half-point increase in its key short-term interest rate, rather than a quarter point hike as it did at its meeting in February. In testimony to Congress this week, Chair Jerome Powell made clear that the Fed would increase the size of its rate hikes if evidence continued to point to a robust economy and persistently high inflation

    When the Fed raises its benchmark rate, it typically leads to higher rates on mortgages, auto loans, credit card borrowing and business loans. The goal in raising loan rates is to cool borrowing and spending and slow inflation.

    Economists have estimated that employers significantly slowed their hiring in February, with a gain of 208,000 jobs, according to a survey by the data provider FactSet. Though that figure would be far below January’s gain, it would still be consistent with a healthy economy.

    Rapid hiring typically leads businesses to offer higher pay to attract or keep workers, and their higher labor costs are often passed on to their customers through higher prices. It’s a cycle that tends to keep inflation elevated.

    “We have two or three more very important data releases to analyze before” the Fed’s next meeting, Powell told the Senate Banking Committee on Tuesday. “Those are going to be very important.”

    Besides Friday’s jobs report, those data releases include Tuesday’s report on consumer inflation in February. Last month’s report on January inflation had raised alarms by showing that consumer prices reaccelerated on a month-to-month basis.

    January’s vigorous hiring data was the first in a series of reports to point to an accelerating economy at the start of the year. Employers added 517,000 jobs, the most in nearly a year, and the unemployment rate reached 3.4%, the lowest level since 1969. Sales at retail stores and restaurants also jumped, and inflation, according to the Fed’s preferred measure, rose from December to January at the fastest pace in seven months.

    The stronger data reversed a cautiously optimistic narrative that the economy was cooling modestly — just enough, perhaps, to tame inflation without triggering a deep recession. Now, the economic outlook is hazier.

    High borrowing rates have cratered the housing market, with home sales having dropped for 12 straight months, a consequence of the average mortgage rate nearly doubling over that time. Manufacturing is also showing signs of weakness. Higher rates have made it harder for businesses and consumers to borrow to buy major factory goods, from machinery to cars to appliances.

    By contrast, spending for services — things like traveling, dining out and attending entertainment events — remains strong. Many Americans continue to engage in activities that were restricted during the COVID lockdowns.

    One reason why hiring likely slowed in February, analysts say, is that some of the outsize hiring in January had reflected one-time factors. The weather, for example, was unusually warm, which likely caused more people to go out and spend and allowed more construction projects to continue. The Federal Reserve Bank of San Francisco has estimated that the weather added about 120,000 jobs to January’s total.

    And a strike by workers at the University of California system ended, adding 36,000 jobs to January’s total. Subtracting those two factors would have lowered job growth in January to about 360,000, matching the average gain for the past six months.

    Hiring even at that rate is about triple the level the Fed would prefer. Job gains of about 100,000 a month would be just enough to keep up with population growth and prevent unemployment from rising. A figure that low would also mean that employers weren’t so desperate for workers and wouldn’t have to keep raising wages.

    Higher pay is great for employees, of course. But Fed officials say it is contributing to higher inflation, particularly in labor-intensive service industries like restaurants, health care and hotels.

    “Strong wage growth is good for workers but only if it is not eroded by inflation,” Powell said in testimony to Congress on Wednesday.

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