Latest news with #LuciaMutikani
Yahoo
6 hours ago
- Business
- Yahoo
US labor market steadily easing amid tariff uncertainty
By Lucia Mutikani WASHINGTON (Reuters) -U.S. job openings increased in April, but layoffs posted their biggest rise in nine months, suggesting that labor market conditions were softening amid a dimming economic outlook because of tariffs. The Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Tuesday also showed the number of people quitting their jobs for greener pastures declined by the most since last November. This was consistent with surveys showing consumers becoming less confident about the jobs market. Economists say the on-gain, off-again manner in which President Donald Trump's import duties are being implemented has left businesses in limbo and struggling to plan ahead. The labor market continues to anchor the economy. Despite the rise in April, layoffs remain relatively low. "We will call this report another indication of stasis in U.S. companies in the face of tariff uncertainty," said Carl Weinberg, chief economist at High Frequency Economics. "Once companies are more certain that bad times are coming, they will start to shed workers." Job openings, a measure of labor demand, rose 191,000 to 7.391 million by the last day of April, the Labor Department's Bureau of Labor Statistics said. Data for March was revised higher to 7.200 million open positions instead of the previously reported 7.192 million. Economists polled by Reuters had forecast 7.10 million vacancies. April's rise in vacancies was likely a correction following March's sharp decline. Unfilled positions were concentrated in the professional and business services as well as healthcare and social assistance sectors. Job openings at restaurants and bars dropped 135,000. There were also fewer postings in manufacturing, finance and insurance as well as state and local government education. Federal government vacancies rose 13,000 despite a hiring freeze implemented by the Trump administration amid cost cutting. The job openings rate rose to 4.4% from 4.3% in March. LAYOFFS RISE Layoffs increased 196,000, the largest rise since last July, to a still-low 1.786 million. Companies are hoarding workers after difficulties finding labor during and after the COVID-19 pandemic. The layoffs rate inched up to 1.1% from 1.0% in March. Layoffs increased in the professional and business services, healthcare and social assistance sectors as well as at restaurants and bars. There were also job cuts in construction and manufacturing industries. But there were fewer layoffs in the government sector. Though job postings increased, companies are generally hesitant to boost headcount. Hiring increased by 169,000 to 5.573 million, driven by construction, professional and business services, hotels and food services businesses. Hiring declined in the retail, finance and insurance sectors. A U.S. trade court last week blocked most of President Donald Trump's tariffs from going into effect, ruling that the president overstepped his authority. But the tariffs were temporarily reinstated by a federal appeals court a day later, adding to the uncertainty facing businesses. Americans are staying put in their jobs. The number of people quitting their jobs declined 150,000 to 3.194 million. The quits rate, viewed as a measure of labor market confidence, fell to 2.0% from 2.1% in March, also suggesting subsiding wage inflation. The Conference Board's labor market differential has narrowed considerably this year. That lack of confidence could be reinforced by May's employment report, which is scheduled for release on Friday. Nonfarm payrolls likely increased by 130,000 jobs last month after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast to hold steady at 4.2%, with greater risks of a rise to 4.3%.
Yahoo
27-05-2025
- Business
- Yahoo
US labor market stable in mid-May; slowdown is looming due to tariffs
By Lucia Mutikani WASHINGTON (Reuters) -The number of Americans filing new applications for unemployment benefits fell last week as companies hoard labor, suggesting the economy maintained a steady pace of job growth in May, but it is becoming harder for those out of work to find new opportunities. The weekly jobless claims report from the Labor Department on Thursday showed unemployment rolls approaching levels last seen in late 2021 amid a reluctance by employers to increase headcount because of economic uncertainty stemming from President Donald Trump's policies, including a shifting position on tariffs, mass deportations of migrants and firings of public workers. "Employers have so far elected to keep their staff headcounts steady despite the swirling winds of unprecedented policy changes for the economy emanating from down in Washington," said Christopher Rupkey, chief economist at FWDBONDS. "There is no serious deterioration in the labor market to date, and the economy is weathering the storm for now." Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 227,000 for the week ended May 17. Economists polled by Reuters had forecast 230,000 claims for the latest week. Labor market resilience has provided the Federal Reserve cover to hold interest rates steady while policymakers monitor the Trump administration's unfolding policies. Independent surveys, however, point to a pickup in layoffs in the coming months as the administration's import duties hurt demand, snarl supply chains and fuel inflation. A survey from S&P Global on Thursday showed a composite measure of manufacturing and services industries employment tipped into contraction territory in May, "primarily reflecting concerns over future demand prospects but also in response to worries over rising costs and labor shortages." Business activity, however, increased this month following a truce in the trade war between the U.S. and China. S&P Global said the pausing of higher tariffs for 90 days likely resulted in some companies front-running imports and orders. Economists are expecting layoffs in the transportation, warehousing and retail sectors as tariffs weigh on consumer spending. "A large share of these jobs likely will go as consumers' spending swings from above-trend to below-trend in the third quarter, after tariff-driven price rises have kicked in," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "The pace of firing will rise and new hiring will decline, lifting weekly claims to about 250,000 by the end of June." The rise in business activity this month was accompanied by a surge in price pressures, hinting at an acceleration in inflation in the coming months and keeping stagflation on the table. Gross domestic product contracted in the January-March quarter for the first time in three years. The data was, however, overshadowed by the passage in the U.S. House of Representatives of Trump's "big, beautiful bill," which the nonpartisan Congressional Budget Office estimated would add about $3.8 trillion to the federal government's $36.2 trillion debt in the next decade, if it becomes law. Stocks on Wall Street were trading slightly higher and the dollar gained versus a basket of currencies. The 30-year Treasury yield reached its highest level in 19 months before easing. LONG UNEMPLOYMENT SPELLS The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of May's employment report. Claims rose marginally between the April and May survey periods. The economy added 177,000 jobs in April. Economists expect job growth to slow below 100,000 per month, the level they say is needed to keep up with growth in the working-age population. Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, will shed more light on the health of the labor market in May. The so-called continuing claims increased by 36,000 to a seasonally adjusted 1.903 million during the week ending May 10, moving back to levels last seen in November 2021, the claims report showed. "This report suggests that May employment growth should still be decent, though the gradual rise in continuing claims does point to some upward pressure on unemployment," said Abiel Reinhart, an economist at J.P. Morgan. Employers' hesitancy to add to headcount has left many people who lose their jobs to experience long spells of unemployment. The median duration of unemployment jumped to 10.4 weeks in April from 9.8 weeks in March. While the labor market is holding up, the housing market continues to struggle and could remain sluggish as the bond market selloff drives up mortgage rates. Existing home sales slipped 0.5% in April to a seasonally adjusted annual rate of 4.00 million units, the National Association of Realtors said in a third report. Sales last month were the slowest for April since 2009, marking a weak start to the spring selling season. Housing inventory soared 9.0% to 1.45 million units, the highest in more than four years. "The market is slowly but steadily shifting in favor of buyers, but more listings will be needed to bring sales out of the cellar," said Daniel Vielhaber, an economist at Nationwide. "High mortgage rates and uncertainty about forward financial conditions may cause many buyers to put off a home purchase this year and wait for a more stable environment. We see the housing market slump continuing through the end of the year." Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
27-05-2025
- Business
- Yahoo
Plummeting US core capital goods orders point to weak business spending
By Lucia Mutikani WASHINGTON (Reuters) -New orders for key U.S.-manufactured capital goods plunged in April amid mounting uncertainty over the economy because of tariffs, suggesting business spending on equipment weakened at the start of the second quarter. The report from the Commerce Department on Tuesday also showed shipments of these goods falling last month. Economists said President Donald Trump's flip-flopping on import duties was making it difficult for businesses to plan ahead. That has been evident in the deterioration in sentiment among businesses. "I have predicted for months that business investment will be the main driver of a softer economic performance this year, as executives postpone their capital projects until they have more clarity on policy," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets. "These data offer the first confirming evidence of that hypothesis." Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, tumbled 1.3% last month after an upwardly revised 0.3% gain in March, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast these so-called core capital goods orders dipping 0.1% after a previously reported 0.2% drop in March. Core capital goods shipments slipped 0.1% after increasing 0.5% in March. Nondefense capital goods orders slumped 19.1%. Shipments of these goods rebounded 3.5% after falling 1.1% in March. Front-running by businesses eager to avoid higher prices from Trump's sweeping tariffs on imports contributed to business spending on equipment, mostly information processing equipment, surging at its fastest rate in 4-1/2 years in the first quarter. That helped to limit the drag on gross domestic product from a flood of imports. Trump has delayed higher import duties on most countries until July. The White House this month announced a deal with Beijing to slash tariffs on Chinese goods to 30% from 145% for 90 days. TARIFFS WHIPLASH But Trump last week ratcheted up his trade war, proposing a 50% tariff on European Union goods starting June 1 and threatened Apple with a 25% duty on any iPhones manufactured outside the United States. Trump at the weekend backed off his threat against the EU, restoring a July 9 deadline. He sees tariffs as a tool to, among other things, revive a long-declining U.S. industrial base, a feat that economists argue would be difficult to achieve. While orders for computers and electronic products rebounded 1.0% last month, bookings for communications equipment decreased 2.6%. Electrical equipment, appliances and components orders fell 0.2%. But orders for machinery increased 0.8% as did those for fabricated metal products. Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, dropped 6.3% last month after a slightly upwardly revised 7.6% rise in March. Durable goods orders were previously reported to have jumped 7.5% in March. They were last month weighed down by a decline in orders for commercial aircraft as well as the fading boost from the tariff-related front-running. Boeing reported on its website that it had received only eight aircraft orders in April, down from 192 in March. Orders for motor vehicles and parts decreased 2.9%. Overall transportation orders plummeted 17.1% after soaring 23.5% in March. "Many of the inputs that go into the manufacture of durable goods in America are made in countries overseas which will need to be imported at what looks like could be a much higher, jacked-up price when accounting for tariffs," said Christopher Rupkey, chief economist at FWDBONDS. "Trying to revitalize American manufacturing will be difficult if factories cannot get the parts they need in a timely manner and at a reasonable cost."
Zawya
27-05-2025
- Business
- Zawya
US core capital goods orders tumble in April
New orders for key U.S.-manufactured capital goods fell in April, suggesting business spending on equipment weakened at the start of the second quarter. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, tumbled 1.3% last month after an upwardly revised 0.3% gain in March, the Commerce Department's Census Bureau said on Tuesday. Economists polled by Reuters had forecast these so-called core capital goods orders dipping 0.1% after a previously reported 0.2% drop in March. (Reporting by Lucia Mutikani Editing by Ros Russell)
Zawya
23-05-2025
- Business
- Zawya
US new home sales unexpectedly rise in April
Sales of new U.S. single-family homes unexpectedly increased in April as builders lowered prices to lure buyers, but rising mortgage rates and an uncertain economic outlook remain constraints for the housing market. New home sales surged 10.9% to a seasonally adjusted annual rate of 743,000 units last month, the Commerce Department's Census Bureau said on Friday. The sales pace for March was revised down to a rate of 670,000 units from the previously reported 724,000 units. Economists polled by Reuters had forecast new home sales, which make up about 14% of U.S. home sales, declining to a rate of 693,000 units. (Reporting by Lucia Mutikani; Editing by Mark Porter)
