European leaders say outlook is dimming as U.S.-China trade war continues
Less that half of large businesses in Europe say they expect to add more workers in the next six monthsA poll of 50 CEOs and chairmen carried out by German research group ZEW on behalf of the European Round Table for Industry, a trade association, shows that while the expectations for business remain slightly positive overall, employment and investment prospects are down.
America addedlast month. But don't break out the champagne just yet.
Some economists are largely attributing the impressive 266,000 job gains to easing trade tensions and Fed interest rate cuts. But they continue to predict a slowdown in the economy and labor market next year, with a risk of recession still looming.
“It doesn’t tell us a whole lot about where we’re headed,” says Scott Anderson, chief economist at Bank of the West.
Almost half of Americans work in low-wage jobs
The low-wage workforce is part of every local U.S. economy, but it takes the biggest toll in the South and West.Contrary to popular opinion, these workers aren't teenagers or young adults just starting their careers, write Martha Ross and Nicole Bateman of the Brookings Institution's Metropolitan Policy Program, which conducted the analysis.
Still, analysts say recent developments have put the economy in a better place and at least lowered the chances of a downturn.
The huge number of jobs added by employers in November far exceeded the 184,000 expected. Even after accounting for 46,000 General Motors employees who returned to work after a six-week strike, a robust 220,000 jobs were added last month.
Trump and jobs: ?
Beware the sharing economy:
A closer look shows the strong performance caps an acceleration in payroll growth to an average 205,000 from September through November, up from 176,000 the first eight months of the year.
Klobuchar reveals plan to help Americans affected by changing economy
Sen. Amy Klobuchar (D-Minn.) will roll out a plan to address changes in the American economy as she returns to the campaign trail in Iowa, according to The Associated Press.Klobuchar plans to discuss the plan in more detail during a three-day swing through the Hawkeye State that will also include a forum with the Teamsters and Iowa Farmers Unions.Her proposal includes tax credits for retraining workers forced out of jobs due to automation as well as similar support for those who have relied on the fossil fuel industry, according to the AP.
Why the pickup?
The Federal Reserve lowered its key interest rate for the first time in a decade in late July and followed with two more cuts in September and October, spurring more borrowing and economic activity and goosing the stock market.
“They put a floor underneath the downside risk,” Anderson says, giving companies confidence the Fed will do what’s necessary to prevent the U.S. trade war with China and a sluggish global economy from dousing consumer spending and derailing the record 10-year-old expansion. Fed officials, who meet this week, have said they have put rate cuts on hold unless the economy “materially” worsens.
Also, in early October, U.S. and Chinese negotiators announced they were close to a phase I trade deal to head off additional tariffs that are set to take effect Dec. 15 and would affect cellphones and many other consumer products.
While the two sides are still haggling over details, analysts continue to expect an agreement that would entail more Chinese purchases of U.S. agricultural goods, though it wouldn’t affect existing duties or some deeper conflicts between the two countries.
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“It’s no coincidence this is going on at the same time” that job growth has picked up momentum, says Diane Swonk, chief economist at Grant Thornton.
Other positive developments may also be playing a role. The risk that Britain will leave the European Union without a trade deal with the continent -- a scenario known as a hard Brexit – has fallen in recent months.
And in a sign of easing recession threats, the relationship between short- and long-term bonds is more stable. Three-month Treasury yields edged above 10-year rates in March, a yield curve “inversion” that traditionally heralds a dowturn a year or two down the road. But 10-year yields climbed above three-month rates in October, in part because of the Fed rate cuts.
Half of senior executives recently expressed optimism about the U.S. economic outlook over the next 12 months, up from 42% in the third quarter, according to a fourth-quarter survey by the American Institute of CPAs.
Despite the positive developments, President Trump easily could impose the consumer-related tariffs next year if China doesn’t make concessions toward a bigger agreement, Swonk says. The weak global economy, the lack of a broader U.S.-China pact and the risk that China violates the Phase I deal will leave a cloud of uncertainty over the economy and business confidence next year, Swonk says.
Trump to hold 'Merry Christmas' rally in Battle Creek
President Donald Trump will host a "Merry Christmas Rally" at Kellogg Arena in Michigan on Dec. 18."Michigan is booming thanks to President Trump, and jobs are coming back to the state," Kayleigh McEnany, national press secretary for Donald J. Trump for President, Inc., said in a press release. "President Trump is delivering on his promises, and he looks forward to celebrating those successes with the great men and women of Michigan this Christmas season.
Anderson expects the trade and global troubles to have a bigger effect on consumer spending next year.
Swonk predicts economic growth will slow to 1.6% in 2020 from 2.3% this year while monthly job growth averages just above 100,000. She reckons the odds of recession by the end of 2020 are 51%.
Others are more sanguine. Economists surveyed by Wolters Kluwer Blue Chip Economic Indicators have the chance of a downturn at about 34%. Barclays economist Jonathan Millar puts the risk at 25% to 30%, down from 35% a few months ago.
Too much sharing?:
The 266,000 job gains last month further eased fears of a downturn, but the report also provided clues that the economy and labor market may be downshifting. Yearly wage growth edged down to 3.1% and has moderated after picking up steam the second half of last year. And rather than reflecting a broad-based surge in job growth, much of last month’s acceleration was in health care, Anderson says, a hiring spree that’s unlikely to be repeated in the months ahead.
This article originally appeared on USA TODAY:
UK searches for jobs abroad have surged after the general election .
The number of Britons searching online for jobs abroad jumped 25% following the release of the initial results of the U.K.'s general election, according to global jobs site Indeed. Job searches on Indeed started to climb at 10 p.m. on Thursday December 12, when an exit poll predicted the Conservative Party would win 368 seats in British parliament.Ultimately the Conservatives won 365 seats, a big gain on their 2017 performance and well above the 326 needed by a political party to secure a majority in the House of Commons.Searches on Indeed's site then peaked at 4 a.m.