Scrounge for Workers Sees US Jobless Claims Hit 48-Year Low

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New U.S. claims for jobless benefits fell for the third week in a row, hitting their lowest level in nearly 49 years for the third straight week, the Labor Department reported Thursday.

The new figures suggest the U.S. economy’s vigorous job creation continued unabated this month as the data were collected during the survey week for the department’s more closely watched monthly jobs report, due out next week.

Amid a widely reported labor shortage, employers are reluctant to lay off workers who are difficult to replace.

For the week ended September 12, new claims for unemployment insurance fell to 201,000, down 3,000 from the prior week. Economists had instead been expecting a result of 209,000.

The result was the lowest level since November of 1969, whereas the prior week’s level had been the lowest since December 1969.

However, economists say that in reality the levels are likely the lowest ever, given demographic changes in the United States in the past half century.

Claims have now held below the symbolic level of 300,000 for more than 3.5 years, the longest such streak ever recorded.

Though they can see big swings from week to week, jobless claims are an indication of the prevalence of layoffs and the health of jobs markets.

In a decade of economic recovery, the United States has seen uninterrupted job creation, driving the unemployment rate to historical lows.

In light of these trends, the Federal Reserve is widely expected to raise interest rates next week to prevent inflation from rising too quickly.

 

 

 

Report: Extreme Poverty Declining Worldwide 

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The world is making progress in its efforts to lift people out of extreme poverty, but the global aspiration of eliminating such poverty by 2030 is unattainable, a new report found.

A World Bank report released Wednesday says the number of people living on less than $1.90 per day fell to a record low of 736 million, or 10 percent of the world’s population, in 2015, the latest year for which data is available.

The figure was less than the 11 percent recorded in 2013, showing slow but steady progress.

“Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time,” World Bank Group President Jim Yong Kim said.

“But if we are going to end poverty by 2030, we need much more investment, particularly in building human capital, to help promote the inclusive growth it will take to reach the remaining poor,” he warned. “For their sake, we cannot fail.”

Poverty levels dropped across the world, except in the Middle East and North Africa, where civil wars spiked the extreme poverty rate from 9.5 million people in 2013 to 18.6 million in 2015.

The highest concentration of extreme poverty remained in sub-Saharan Africa, with 41.1 percent, down from 42.5 percent. South Asia showed the greatest progress with poverty levels dropping to 12.4 percent from 16.2 percent two years earlier.

The World Bank’s preliminary forecast is that extreme poverty has declined to 8.6 percent in 2018.

About half the nations now have extreme poverty rates of less than 3 percent, which is the target set for 2030. But the report said that goal is unlikely to be met.

China’s Alibaba Scraps Plan to Create 1M US Jobs

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Alibaba Chairman Jack Ma said Wednesday that the Chinese e-commerce giant had canceled plans to create 1 million jobs in the U.S., blaming the ongoing trade war for the decision, according to Chinese news agency Xinhua.

“This commitment is based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade,” Ma told Xinhua. “The current situation has already destroyed the original premise. There is no way to deliver the promise.”

Ma originally pledged to spur job growth by letting American small businesses and farmers sell their goods on Alibaba, which is one of the world’s largest online retailers, when he visited then-President-elect Donald Trump early 2017.

Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports on Monday, threatening to place taxes on an additional $267 billion worth of Chinese imports if China attempts to retaliate.

China placed tariffs on about $60 billion worth of U.S. products the next day as previously planned, though it reduced the size of the tariffs.

At an Alibaba investor conference Tuesday, Ma described the state of economic relations between the two countries as a “mess” with consequences that could last for decades.

Some experts said Ma’s plan to bring 1 million jobs to the U.S. might have been overly ambitious in the first place.

Chinese Entrepreneur Rescinds Offer to Create 1 Million US Jobs

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Chinese technology billionaire Jack Ma has rescinded his offer to create 1 million new jobs in the United States, saying it is no longer possible with the escalation of trade disputes between the world’s two biggest economies.

The Alibaba chief made the U.S. jobs pledge to then-President-elect Donald Trump in January 2017 at Trump Tower in New York, just before Trump assumed power. The prospective U.S. leader declared, “Jack and I are going to do some great things.”

But in an interview published late Wednesday by Xinhua, China’s official news agency, Ma said tit-for-tat tariffs imposed by Washington and Beijing, including new levies this week on billions of dollars of trade between China and the U.S., have scuttled his investment plans in the U.S..

“This promise was on the basis of friendly China-U.S. cooperation and reasonable bilateral trade relations, but the current situation has already destroyed that basis,” Ma said. “This promise can’t be completed.”

Trump this week said he was imposing a 10 percent tariff on $200 billion worth of Chinese imports, with Beijing immediately responding by targeting $60 billion worth of U.S. imports with 5 to 10 percent taxes.

As part of its 1 million jobs pledge, Alibaba, a massive online shopping site, had not planned to build factories or customer product fulfillment centers in the U.S. Rather, it had hoped to boost trade by helping small U.S. businesses sell their products in China and elsewhere in Asia.

Alibaba held a conference in the Midwest city of Detroit last year to encourage small U.S. businesses and farms to sell their products in China through Alibaba’s online portals.

The 54-year-old Ma said in the interview that Alibaba “will not stop promoting the healthy development of China-U.S. trade.”

But he told investors earlier this week that the trade disputes between the two countries could last for 20 years.

“It’s going to last long, it’s going to be a mess,” Ma said. “Trade is not a weapon and cannot be used for wars. Trade should be the propeller of peace.”

Instead, Ma said Alibaba would focus on business opportunities in Europe, South America, Russia and Africa.

Canada Wants to See Flexibility in NAFTA Talks With US

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Canada said on Wednesday that it would need to see movement from the United States if the two sides are to reach a deal on renewing NAFTA, which Washington insists must be finished by the end of the month.

Although the administration of U.S. President Donald Trump and its allies are increasing pressure on Canada to make the concessions they say are needed for the North American Free Trade Agreement, Canadian Prime Minister Justin Trudeau made clear he also wanted to see flexibility.

“We’re interested in what could be a good deal for Canada but we’re going to need to see a certain amount of movement in order to get there and that’s certainly what we’re hoping for,” he told reporters in Ottawa.

Shortly afterwards, Canadian Foreign Minister Chrystia Freeland met U.S. Trade Representative Robert Lighthizer for their fourth set of talks in four weeks with the two sides still disagreeing on major issues.

Trump has already wrapped up a side deal with Mexico and is threatening to exclude Canada if necessary. Canadian officials say they do not believe the U.S. Congress would agree to turn NAFTA into a bilateral treaty.

U.S. Chamber of Commerce President Thomas Donohue said it would be extremely complicated, if not impossible, for the administration to pull off a Mexico-only agreement.

“If Canada doesn’t come into the deal there is no deal,” Donohue told a media breakfast in Washington.

Donohue said he believed that if the administration wanted to end the current NAFTA, such a move would be subject to a vote in Congress, which would be difficult to get.

The Chamber, the most influential U.S. business lobby, wants NAFTA to be renegotiated as a tri-lateral agreement, citing how highly integrated the three member nations’ economies have become since the pact came into force in 1994.

Negotiators are arguing over cultural protections, dispute resolution, and a U.S. demand for more access to Canada’s protected dairy market. Sources say Ottawa has made clear it is prepared to make concessions, which would anger the influential dairy lobby.

“For American farmers the Canadian market is a drop in the bucket. For us it’s our livelihood,” Dairy Farmers of Canada vice president David Wiens told reporters in Ottawa. Concessions in past trade deals had already hurt Canadian farmers, he said.

“The dairy sector cannot be negatively impacted again by a new trade agreement,” he said. “Enough is enough.”

Kenya’s Finance Minister Cuts Spending, Money Transfer Taxes to Rise

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Kenya’s Finance Minister Henry Rotich has cut the government’s spending budget by 55.1 billion shillings ($546.90 million), or 1.8 percent, for the fiscal year from July this year, a Treasury document showed on Wednesday.

The government is facing a tough balancing act after a public outcry over a new 16 percent value added tax on all petroleum products forced President Uhuru Kenyatta to suggest to parliament to keep the VAT and cut if by half.

In the document detailing the new spending estimates, Rotich said the budget had to be adjusted because of the amendments to tax measures brought by lawmakers when they first debated it and passed it last month.

The proposed halving of the VAT rate on fuel has left the government with a funding shortfall, hence the cuts in spending.

Parliament will vote on a raft of proposals, including the 1.8 percent cut on spending, in a special sitting on Thursday.

Kenya’s economy is expected to grow by 6 percent this year, recovering from a drought, slowdown in lending and election-related worries that cut growth in 2017, but investors and the IMF have expressed concerns over growing public debt.

While the next election is still four years away, the government’s economic policies are chafing with citizens angered by increasing costs of living. Fuel dealers protested when the VAT on fuel kicked in this month and citizen groups have gone to court to try to block new or higher taxes.

Separate documents sent by Kenyatta to parliament ahead of Thursday’s sitting underscored the debate in government over how to boost revenues without hurting the poor.

His government has to reduce a gaping fiscal deficit while boosting spending on priority areas such as healthcare and affordable housing.

In order to balance the government’s books after the reduction of the fuel tax, he is trying to reinstate several tax measures struck out by parliament, including a 2 percentage hike on excise duty for mobile phone money transfers to 12 percent.

Kenya’s biggest mobile phone operator Safaricom said in June it was opposed to any tax rise on mobile phone-based transfers, arguing that it would mainly hurt the poor, most of whom do not have bank accounts and rely on services such as its M-Pesa platform.

The president also asked parliament to double the excise duty on the fees charged by banks, money transfer services, and other financial institutions to 20 percent.

Parliament in August threw out an earlier version of proposed fees on bank transfers, a so-called “Robin Hood” tax of 0.05 percent on transfers of more than 500,000 shillings.

The president has not yet signed the budget due to the dispute over the planned tax hikes. Kenyatta’s Jubilee party and its allies have a comfortable majority in parliament.

The Kenya National Chamber of Commerce and Industry this month said the government should widen the tax base. It also urged the state to cut expenditure, reduce wastage of public funds and deal with corruption, which some studies have found lose the government about a third of its annual budget.

 

Critics Skewer Venezuelan President Over Feast as Country Starves

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Videos of Venezuelan President Nicolas Maduro feasting on steaks at an upscale restaurant have sparked worldwide outrage on behalf of the poverty-stricken people of his country.

One video show celebrity chef Nusret Gokce, also known as “Salt Bae,” carving meat for the president and his wife, Cilia Flores, at the Nusr-Et restaurant in Istanbul, where each cut of meat can cost hundreds of dollars.

Florida Senator Marco Rubio slammed the chef who was filmed with the “dictator,” who was shown eating “a five-star gourmet meal, smoking fine cigars while the people of Venezuela are literally starving.”

“It’s an outrage, disgusting … this is a man starving human beings and [Salt Bae] is celebrating him as some sort of hero – I got pissed,” Rubio told the Miami Herald on Tuesday.

“I don’t know who this weirdo #Saltbae is, but the guy he is so proud to host is not the President of #Venezuela. He is actually the overweight dictator of a nation where 30% of the people eat only once a day & infants are suffering from malnutrition,” Rubio tweeted Tuesday.

The senator also tweeted the address and phone number of the chef’s restaurant in Miami, which is home to scores of Venzeulan-Americans and Cuban-Americans who despise the socialist leader.

Opposition leader Julio Borges, who lives in exile in Colombia, tweeted: “While Venezuelans suffer and die of hunger, Nicolas Maduro and Cilia Flores have a good time in one of the most expensive restaurants in the world, all with money stolen from the Venezuelan people.”

The once-wealthy oil-producing nation has been in an economic crisis for the past five years. The turmoil has left many Venezuelans struggling to find food and medicine and driven masses to flee to other South American countries.

According to the United Nations, more than 2 million Venezuelans have fled since 2014.

A  Meganalisis poll published in the Miami Herald last month found more then 30 percent of Venezuelans say they only ate one meal a day, nearly the same number report eating “nothing or close to nothing” at least one day a week and a staggering 78 percent said they had trouble finding enough food.

Mexico’s Next Anti-money Laundering Czar Vows Action After ‘Shameful’ Odebrecht

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Mexico’s incoming financial intelligence chief said it was “shameful” how little had been done about bribes that Brazilian construction firm Odebrecht executives said were paid to secure Mexican public works contracts, and vowed to reexamine the case once in office.

Santiago Nieto will head the finance ministry’s Financial Intelligence Unit, which analyzes suspicious financial records, once the new leftist government takes office on Dec. 1. He said in an interview last week that the unit had been misused for political ends, without elaborating.

“It’s shameful that Mexico and Venezuela are the only countries in Latin America that haven’t sanctioned anyone,” he said of the Odebrecht case, which is at the heart of Brazil’s Lava Jato, or Car Wash, corruption investigation that has reverberated across the region in recent years.

“In the case of Odebrecht, and in any other case, the first thing we would have to do is review what there is in the Financial Intelligence Unit related to the case,” he said. Nieto does not yet have access to files and records kept by the unit.

In Brazil, Odebrecht executives admitted to paying bribes within Mexico. Prosecutors in Mexico have said they are probing business between the Brazilian conglomerate and state oil company Pemex.

Pemex has declined to comment on issues related to Odebrecht, citing the ongoing investigation. The office of Mexico’s attorney general, the finance ministry and the Financial Intelligence Unit all declined to comment for this story. Odebrecht acknowledged receipt of an emailed request for comment, but did not respond further.

Anger at widespread corruption scandals, including the alleged bribes from Odebrecht, a lucrative house deal involving the family of President Enrique Pena Nieto, and hundreds of millions of dollars siphoned from government coffers through fake contracts, helped leftist Andres Manuel Lopez Obrador win a landslide presidential victory in July.

Lopez Obrador pledged in his manifesto to clamp down on financial crime, and tighten money laundering, banking and tax regulations. He has given few details of how he will achieve this, but promises to set an example of probity from the presidency.

Tasked with helping to prevent and fight money laundering and terrorism financing, the financial intelligence unit receives and analyzes information that it should then pass on to prosecutors to investigate and construct a case.

A former lead prosecutor for electoral crimes, Nieto was dismissed in 2017 on the grounds that he broke a code of conduct when he gave an interview about his investigation into Odebrecht bribery during the 2012 presidential campaign.

Nieto has admitted his mistake, but denies breaking rules or revealing sensitive information. He said his firing was illegal.

Last month, two incoming administration officials told Reuters that Odebrecht may be blocked from participating in public works projects under the new government.

Odebrecht responded that wrongdoing at the company should not be used to impose sanctions against it in Mexico.

Corrupt System?

Nieto said he would press for more information sharing between federal departments that investigate tax, electoral and organized crime, and investigate possible corruption within the system.

“I have the impression that there is a factor of internal corruption,” he said, without providing specifics.

The Financial Action Task Force, an international organization that sets global standards for fighting illicit finance, said earlier this year that in Mexico “financial intelligence does not often lead to investigations of money laundering, underlying crimes, and terrorist financing.”

Following the report, Mexico’s finance ministry and the attorney general’s office issued a joint statement recognizing shortcomings and promising to improve efforts.

However, the Mexican government seized just 871 million pesos ($46.3 million) and $14.7 million between September 2017 and June 2018, and began just one criminal proceeding, according to official statistics.

Nieto, who called the outcomes “terrible,” pointed to the financial intelligence unit and attorney general’s office as the two “bottlenecks” holding back cases.

“It is a matter of impunity, a complicit government, and a lack of political will to fight corruption,” Nieto said.

China Prepares Retaliation for $200 Billion in US Tariffs

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China says it has no choice but to retaliate to U.S. President Donald Trump’s 10 percent tariffs on $200 billion in Chinese goods, risking a further escalation of trade tensions between the world’s two biggest economies.

 

In a brief statement posted online Tuesday, China’s Commerce Ministry said, “To protect its legitimate rights and interests and order in international free trade, China is left with no choice but to retaliate simultaneously.”

 

The statement did not say how China might respond. China has previously said it would respond with a list of tariffs that includes products from liquified natural gas to aircraft.  On Monday, the Communist Party backed Global Times newspaper warned that if Trump went ahead with the tariffs, China would not just play defense.

 

At about the same time the Commerce Ministry statement was released, a research director for North America and the Pacific at the Commerce Ministry also delivered a commentary on China’s state-run CCTV news network.

 

The official said the latest round of tariffs have brought uncertainty to ongoing efforts for representatives from both countries to meet again and hold trade talks.

 

“Under the party’s strong central leadership, China has the resolve and confidence to press ahead and use deeper reforms and deeper opening up as well as the development of our domestic market to counter United States unilateralism,” Li Wei said.

 

Foreign Ministry spokesman Geng Shuang told a daily briefing Tuesday in Beijing that talks are the only correct way to resolve the issue and accused the United States of being insincere.  Last week, the United States extended an invitation to China’s top negotiator, Liu He, to resume talks later this month in Washington.

 

“As for what measures China may take in response, that will be announced at an appropriate time,” Geng said.

 

The $200 billion in U.S. tariffs go into effect in less than a week, on September 24, leaving the two sides little time to sit down.

 

On Monday, President Trump warned, in a statement announcing his move, if China retaliates against U.S. farmers or other industries, Washington “will immediately pursue phase three, which is tariffs on approximately $267 billion in additional imports.”

The additional $267 billion in tariffs is expected to cover all Chinese imports to the United States.

American and European businesses operating in China say that if Washington presses ahead with more and more tariffs, it is likely to only add to the challenges businesses are already facing.

 

According to surveys conducted by the American Chamber of Commerce in China and the European Chamber of Commerce, trade tensions are already hitting and hurting supply chains of foreign businesses.  Some companies have begun to move manufacturing away from China and the United States to avoid the impact of growing trade tensions, the European Chamber said.

 

European Chamber President Mats Harborn said engagement on the part of Washington and Beijing is the answer.

 

He said that what the United States is doing now is “economic madness” that risks creating a vicious cycle for business that could have an impact in China and elsewhere.  But the root of the trade dispute is that China’s reform is lagging behind its development, creating a “reform deficit.”

 

“Closing the reform gap will create better private companies in China, foreign companies,” Harborn said.  “And reducing the reform deficit should also help reduce tensions in the ongoing trade war.”

 

In its annual position paper on European business in China, the chamber lists 828 recommendations for Chinese authorities to address that deficit.

 

One of the key hurdles both private Chinese enterprises and foreign companies face is the dominant position state owned enterprises (SOEs) enjoy.  State owned enterprises account for around 30 percent of the economy and yet enjoy nearly 70 percent of all financing, the report said.

 

Unfair trade practices and the way SOEs contribute to an unbalanced playing field in China are key elements of the investigation the Trump administration carried out prior to launching its first round of tariffs.

 

But how far China is willing to go to change is uncertain.  Later this month, a meeting on SOEs will be held that many are expecting will be an indicator of the future course China’s Communist Party leaders plan to chart.

 

“We hear that there is a move to make the SOEs stronger, bigger and better,” Harborn said.  “Such ambitions are hindering the further opening and development of the vibrant private Chinese sector.”

 

If reform of SOEs is not on the agenda at the meeting, that would be seen as a clear provocation, given the current climate, he said.