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U.S Payrolls Rose Less Than Projected in September

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payrolls

U.S payrolls rose less than projected in September, wages stagnated and the jobless rate was unchanged as people left the workforce, signaling the global slowdown and financial-market turmoil are rippling through the world’s largest economy.

The addition of 142,000 jobs followed a revised 136,000 gain the prior month that was lower than previously estimated, a Labor Department report showed Friday in Washington. The median forecast in a Bloomberg survey of 96 economists called for a 201,000 advance. The jobless rate held at 5.1 percent, and wage growth was unchanged.

The weak report vindicates the Federal Reserve’s decision to delay an interest-rate increase last month. Cooling overseas markets, a stronger dollar and lower oil prices that are hampering exports and manufacturing raise the risk that employers will hesitate before taking on more staff.

 A weaker-than-expected report “would chip away at confidence about the strength of the expansion,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “It may be a signal that there was a knee-jerk reaction by businesses to the market volatility.”

Employers added workers in industries including retailing, education, and leisure and hospitality.

Payroll estimates of 96 economists in the Bloomberg survey ranged from gains of 149,000 to 256,000 after a previously reported 173,000 advance for August.

The unemployment rate, which is derived from a separate Labor Department survey of households, was projected to hold at 5.1 percent, the lowest since 2008, according to the survey median.

 Revisions to prior reports cut a total of 59,000 jobs from payrolls in the previous two months.

Private employment, which excludes government agencies, rose by 118,000 after a 100,000 gain the prior month.

Government Hiring

Government payrolls rose by 24,000. Employment at state and local agencies is often influenced at this time of the year by swings in the education sector related to the timing of the school year.

There may be some payback after the surge in local government education payrolls in recent months, Ted Wieseman, an economist at Morgan Stanley, said in a note before the report.

Factory payrolls fell by 9,000. Manufacturing and mining have been hurt by cutbacks in drilling and exploration following the plunge in oil and commodities prices. Exports also are weakening amid a China-led slowdown in global growth.

Retailers increased payrolls by 23,700. Employment in leisure and hospitality rose 35,000.

The participation rate, which indicates the share of the working-age people in the labor force, decreased to 62.4 percent from 62.6 percent. That was the lowest since October 1977.

The average work week for all workers fell to 34.5 hours from 34.6 hours.

Average hourly earnings were unchanged from the month before, the report showed. They increased 2.2 percent over the 12 months ended in September, the same year-over-year change as in August. They’ve posted a 2 percent gain on average since the current expansion began in mid-2009.

Among the few positive signs in the report was a figure showing more full-time job opportunities. Americans working part time who would prefer a full-time position decreased to 6.04 million, the fewest since August 2008, from 6.48 million.

Underemployment

The underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking — dropped to 10 percent, the lowest since May 2008, from 10.3 percent.

The gap between the unemployment rate and the underemployment rate is one reason Fed Chair Janet Yellen and other policy makers have said they’ll increase interest rates only gradually.

In a speech last week Yellen said there are still people seeking full-time work who could be pulled back into the labor force if the jobless level fell further. She noted that “may involve a temporary decline in the unemployment rate somewhat below the level that is estimated to be consistent, in the longer run, with inflation stabilizing at 2 percent.”

In their meeting last month, policy makers projected this long-term rate was 4.9 percent, according to officials’ median forecast.

Central bankers delayed raising their benchmark interest rate in September. It’s been near zero since December 2008. Officials next meet on Oct. 27-28, and Yellen has been among those saying an increase this year remains on track.

 

Source: Bloomberg

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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