News

U.S. employers extended a streak of solid hiring in May, adding 223,000 jobs and helping lower the unemployment rate to an 18-year low of 3.8 percent.

 

The Labor Department says average hourly pay rose 2.7 percent from a year earlier, a slightly faster annual rate than in April. But pay growth remains below levels that are typical when the unemployment rate is this low.

 

Still, the report shows that the nearly 9-year old economic expansion – the second-longest on record – remains on track. Employers appear to be shrugging off recent concerns about global trade disputes.

 

The job market is also benefiting a wider range of Americans: The unemployment rate for high school graduates reached 3.9 percent, a 17-year low. For black Americans, it hit a record low of 5.9 percent.

 

The solid hiring data coincides with other evidence that the economy is on firm footing after a brief slowdown in the first three months of the year. The economy grew at a modest 2.2 percent annual rate in the January-March quarter, after three quarters that had averaged roughly 3 percent annually.

 

Some economists remain concerned that the Trump administration’s aggressive actions on trade could hamper growth. The administration on Thursday imposed tariffs on steel and aluminum imports from key allies in Europe, Canada and Mexico. Earlier in the week, it threatened to hit China with tariffs on $50 billion of its goods.

 

Still, while Trump has made such threats since March, most employers so far haven’t suspended hiring.

 

And consumers have started to spend more freely, after having pulled back in the January-March quarter. That gain could reflect in part the effect of the Trump administration’s tax cuts, which might be encouraging more Americans to step up spending. Consumer spending rose in April at its fastest pace in five months.

 

Some of the spending reflects more money needed to pay higher gas prices, a potential trouble spot for consumers in the coming months. The average price of a gallon of gas nationwide reached $2.96 on Thursday, up 15 cents from a month ago, according to AAA. Some economists calculate that higher gas costs could offset up to one-third of the benefit of the tax cuts.

 

Companies are spending more on industrial machinery, computers and software _ signs that they’re optimistic enough about future growth to expand their capacity. A measure of business investment rose in the first quarter by the most in 3{ years. That investment growth has been spurred partly by higher oil prices, which have encouraged the construction of more drilling rigs.

 

Manufacturers have benefited from the healthier business spending and have increased hiring. In April, factories expanded production of turbines and other heavy machinery by the most in seven months.

 

Macroeconomic Advisers, a forecasting firm, says it now foresees the economy expanding at a robust 4 percent annual pace in the April-June quarter, which would be the fastest in nearly four years. That is up from its forecast last week of less than a 3 percent rate for the current quarter.

 

Yet even with unemployment at an 18-year low, wage growth has been chronically sluggish in most industries, leaving many Americans still struggling to pay bills, particularly as inflation has ticked up. Still, companies are starting to pay more to lure workers from other companies, a trend that could lead to broader pay gains in coming months.

 

Mark Zandi, chief economist at Moody’s Analytics, said higher pay for job-switchers tends to augur more robust raises for everyone else.

 

At the same time, Martha Gimbel, head of economic research at the job listing site Indeed, notes that wages for people who remain in their jobs have actually declined in recent months. That suggests that many employers have yet to worry about their workers being lured away.

 

 
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U.S. employers extended a streak of solid hiring in May, adding 223,000 jobs and helping lower the unemployment rate to an 18-year low of 3.8 percent.

 

The Labor Department says average hourly pay rose 2.7 percent from a year earlier, a slightly faster annual rate than in April. But pay growth remains below levels that are typical when the unemployment rate is this low.

 

Still, the report shows that the nearly 9-year old economic expansion – the second-longest on record – remains on track. Employers appear to be shrugging off recent concerns about global trade disputes.

 

The job market is also benefiting a wider range of Americans: The unemployment rate for high school graduates reached 3.9 percent, a 17-year low. For black Americans, it hit a record low of 5.9 percent.

 

The solid hiring data coincides with other evidence that the economy is on firm footing after a brief slowdown in the first three months of the year. The economy grew at a modest 2.2 percent annual rate in the January-March quarter, after three quarters that had averaged roughly 3 percent annually.

 

Some economists remain concerned that the Trump administration’s aggressive actions on trade could hamper growth. The administration on Thursday imposed tariffs on steel and aluminum imports from key allies in Europe, Canada and Mexico. Earlier in the week, it threatened to hit China with tariffs on $50 billion of its goods.

 

Still, while Trump has made such threats since March, most employers so far haven’t suspended hiring.

 

And consumers have started to spend more freely, after having pulled back in the January-March quarter. That gain could reflect in part the effect of the Trump administration’s tax cuts, which might be encouraging more Americans to step up spending. Consumer spending rose in April at its fastest pace in five months.

 

Some of the spending reflects more money needed to pay higher gas prices, a potential trouble spot for consumers in the coming months. The average price of a gallon of gas nationwide reached $2.96 on Thursday, up 15 cents from a month ago, according to AAA. Some economists calculate that higher gas costs could offset up to one-third of the benefit of the tax cuts.

 

Companies are spending more on industrial machinery, computers and software _ signs that they’re optimistic enough about future growth to expand their capacity. A measure of business investment rose in the first quarter by the most in 3{ years. That investment growth has been spurred partly by higher oil prices, which have encouraged the construction of more drilling rigs.

 

Manufacturers have benefited from the healthier business spending and have increased hiring. In April, factories expanded production of turbines and other heavy machinery by the most in seven months.

 

Macroeconomic Advisers, a forecasting firm, says it now foresees the economy expanding at a robust 4 percent annual pace in the April-June quarter, which would be the fastest in nearly four years. That is up from its forecast last week of less than a 3 percent rate for the current quarter.

 

Yet even with unemployment at an 18-year low, wage growth has been chronically sluggish in most industries, leaving many Americans still struggling to pay bills, particularly as inflation has ticked up. Still, companies are starting to pay more to lure workers from other companies, a trend that could lead to broader pay gains in coming months.

 

Mark Zandi, chief economist at Moody’s Analytics, said higher pay for job-switchers tends to augur more robust raises for everyone else.

 

At the same time, Martha Gimbel, head of economic research at the job listing site Indeed, notes that wages for people who remain in their jobs have actually declined in recent months. That suggests that many employers have yet to worry about their workers being lured away.

 

 
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Some U.S. trading partners are vowing to retaliate against U.S interests over President Donald Trump’s decision to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico beginning on Friday.
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Some U.S. trading partners are vowing to retaliate against U.S interests over President Donald Trump’s decision to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico beginning on Friday.
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U.S. employers are thought to have hired at a solid pace in May and helped extend the economy’s nearly nine-year expansion, the second-longest on record, despite uncertainty caused by trade disputes.

Economists have forecast that employers added 190,000 jobs last month and that the unemployment rate remained at a 17-year low of 3.9 percent, according to data provider FactSet.

The Labor Department’s May jobs report will be released at 8:30 a.m. EDT Friday.

Economy firm footing

Solid hiring data would coincide with other evidence that the economy is on firm footing after a brief slowdown in the first three months of the year. The economy grew at a modest 2.2 percent annual rate in the January-March quarter, after three quarters that had averaged roughly 3 percent annually.

Some economists remain concerned that the Trump administration’s aggressive actions on trade could hamper growth. The administration on Thursday imposed tariffs on steel and aluminum imports from key allies in Europe, Canada and Mexico. Earlier in the week, it threatened to hit China with tariffs on $50 billion of its goods.

Still, while Trump has made such threats since March, most employers so far haven’t suspended hiring.

​Consumer spending up

And consumers have started to spend more freely, after having pulled back in the January-March quarter. That gain could reflect in part the effect of the Trump administration’s tax cuts, which might be encouraging more Americans to step up spending. Consumer spending rose in April at its fastest pace in five months.

Some of the spending reflects more money needed to pay higher gas prices, a potential trouble spot for consumers in the coming months. The average price of a gallon of gas nationwide reached $2.96 on Thursday, up 15 cents from a month ago, according to AAA. Some economists calculate that higher gas costs could offset up to one-third of the benefit of the tax cuts.

More hiring, more growth

Companies are spending more on industrial machinery, computers and software, signs that they’re optimistic enough about future growth to expand their capacity. A measure of business investment rose in the first quarter by the most in 3½ years. That investment growth has been spurred partly by higher oil prices, which have encouraged the construction of more drilling rigs.

Manufacturers have benefited from the healthier business spending and have increased hiring. In April, factories expanded production of turbines and other heavy machinery by the most in seven months.

Macroeconomic Advisers, a forecasting firm, said Thursday that it now foresees the economy expanding at a robust 4 percent annual pace in the April-June quarter, which would be the fastest in nearly four years. That is up from its forecast last week of less than a 3 percent rate for the current quarter.

Wage growth lagging

Yet even with unemployment at a 17-year low, wage growth has been chronically sluggish in most industries, leaving many Americans still struggling to pay bills, particularly as inflation has ticked up.

Average hourly pay rose just 2.6 percent in April from a year earlier, before adjusting for inflation. That’s far below historic trends: Paychecks were rising at roughly a 4 percent pace in 2000, the last time unemployment was this low.

Still, companies are starting to pay more to lure workers from other companies, a trend that could lead to broader pay gains in coming months. Workers who switched jobs received annual pay increases averaging 4 percent in April, compared with average gains of 2.9 percent for those who stayed in their jobs, according to data compiled by the Federal Reserve Bank of Atlanta.

Mark Zandi, chief economist at Moody’s Analytics, said higher pay for job-switchers tends to augur more robust raises for everyone else.

“Employers will have no choice but to adjust their pay scales to ensure wage parity across their entire workforce,” Zandi said.

At the same time, Martha Gimbel, head of economic research at the job listing site Indeed, notes that wages for people who remain in their jobs have actually declined in recent months. That suggests that many employers have yet to worry about their workers being lured away.
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Outside Facebook’s annual shareholders meeting Thursday, a lone protester paced on the sidewalk, carrying a U.S. flag and a sign that read “Zuckerberg destroys shareholder value.”

Above, a small plane pulled a banner that read “You Broke Democracy.”

Inside, Facebook shareholders offered both praise and criticism of the company’s leadership.

The social media giant has been in a constant spotlight over how foreign actors used its service to try to influence elections worldwide. It suffered a double blow when it was revealed that 87 million users’ information had gone to a political consulting firm without the users’ knowledge. 

The company continues to face inquiries from federal and state regulators about privacy and user data issues. And Mark Zuckerberg, its chief executive, recently testified in front of the European Parliament after appearing in front of Congress on the issues.

Shareholders sound off 

Facebook shareholders provided another sort of oversight. Many expressed their displeasure by selling shares in March after it was disclosed that Cambridge Analytica, a political consulting firm, obtained user data without their knowledge. Facebook shares have more than recovered since then, rising 2 percent Thursday to $191.78, which was up 26 percent from the company’s three-month low of $152 in March. 

“We didn’t do enough to see how people could abuse these tools,” Zuckerberg told the shareholders.

“The main thing we need to do right now is take a broader view of our responsibility to the community we serve,” he said.

Investors applauded Zuckerberg several times during the meeting. And they followed the company’s advice and appeared to vote down shareholder proposals, including one that would change the voting power of company shares. Currently, Zuckerberg, 34, and insiders hold a class of stock that gives them more than 60 percent of the voting power. 

Shareholders also appeared to vote against other proposals such as requiring the company to report on its gender pay gap and a content report that would show how the company enforces its terms of service worldwide. (Official results of the tally will be posted in the next several days.)

Despite the defeats, shareholder proposals are worthwhile, said Natasha Lamb, managing partner at Arjuna Capital, an activist investment firm behind two proposals.

They “send a signal to management, send a signal to the board,” she said.

Diversity of ideas 

Amid the applause, there was also sharp criticism. 

“We contend that Facebook’s poor stewardship of user data is tantamount to a human rights violation,” said Christine Jantz, chief investment officer at Northstar Asset Management.

Another investor asked what Facebook was doing to understand political bias among its employees and how that affects decisions about content on the site.

Zuckerberg said the company was “committed to being a platform for all ideas.” 

The company ended the meeting, but not before a shareholder pleaded, “Engage with us on these issues. We are on the same team.” 

Company leaders said they would.

Deana Mitchell contributed to this report.
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Reaction to U.S. President Donald Trump’s decision to slap tariffs on steel and aluminum imports from American trading partners — including the European Union — came fast and furious, with threats of retaliation and warnings they risk sparking a trans-Atlantic trade war.

European Commission President Jean-Claude Juncker said the European bloc would respond by imposing penalties of its own on American exports.

“Today is a bad day for world trade,” said Cecilia Malmström, the European trade commissioner. EU officials previously informed the World Trade Organization of the bloc’s plan to levy duties on $7.2 billion worth of U.S. exports if the Trump administration proceeded with threats to impose a 25 percent tariff on steel imports and 10 percent on aluminum.

Canadian and Mexican officials also threatened retaliatory responses but have as yet not indicated which U.S. products they will target. Both countries had hoped that the White House would continue to exempt them from the tariffs. 

National security cited

Europe, along with Canada and Mexico, had been granted a temporary reprieve from the U.S. tariffs after they were unveiled in March by Trump, who said the levies were needed to stem the flood of cheap steel and aluminum into the U.S. and that to impose them was a national security priority.

In Europe, there was disappointment, but less surprise. 

Juncker called the U.S. action “unjustified” and said Europeans had no alternative but to respond with tariffs of their own and to lodge a case against Washington with the World Trade Organization in Geneva. “We will defend the union’s interests, in full compliance with international trade law,” he said.

The EU had already publicly announced that in the event tariffs did go ahead, it would impose levies on Levi-made jeans, Harley-Davidson motorbikes and bourbon whiskey.

British officials appeared the most alarmed. The government of Theresa May had pinned post-Brexit hopes on securing a trade deal with the U.S., and the imposition of tariffs on steel is adding to fears that negotiating a quick trade liberalization agreement with Trump looks increasingly unlikely.

“We are deeply disappointed that the U.S. has decided to apply tariffs to steel and aluminum imports from the EU on national security grounds,” a government spokesman said. “The U.K. and other European Union countries are close allies of the U.S. and should be permanently and fully exempted.”

Discussion at summit

He said the British prime minister planned to raise the tariffs with the U.S. president personally in Canada at a scheduled G-7 summit of the seven largest advanced economies. That summit is likely to be a frosty affair, much like last year’s in Taormina, Sicily. 

With a week to go before the June 7-8 summit, there’s still no final agreement on the agenda, British and Italian officials said. Canadian Prime Minister Justin Trudeau had earmarked climate change, women’s rights and economic growth as key issues, but there has been pushback from Washington. Thursday’s tariff announcement by the White House will further complicate agreeing on a G-7 agenda.

German reaction to the announcement of the tariffs was among the fiercest. Chancellor Angela Merkel dubbed them “illegal.” Manfred Weber, a key ally of the German chancellor and leader of the biggest bloc in the European Parliament, accused the Trump administration of treating American allies as enemies.

“If President Trump decides to treat Europe as an enemy, we will have no choice but to defend European industry, European jobs, European interests,” he said. “Europe does not want a trade conflict. We believe in a fair trade regime from which everybody benefits.” 

Wilbur Ross, U.S. commerce secretary, who’s in Europe and has been pressing the EU to make concessions to avert the tariffs, dismissed threats of a trade war, saying retaliation would have no impact on the U.S. economy. He held out hope that the tariffs could be eliminated, saying, “There’s potential flexibility going forward. The fact that we took a tariff action does not mean there cannot be a negotiation.” 

Business leaders cautious

Some European business leaders have urged their national leaders to be restrained in response, fearing a tit-for-tat spiral could be triggered quickly. Britain’s Confederation of British Industry warned against overreaction, saying no one would win on either side of the Atlantic if a major trade war erupted.

The director of UK Steel, Gareth Stace, said he feared there was clear potential for a damaging trade war.

“Since President Trump stated his plans to impose blanket tariffs on steel imports almost three months ago, the U.K. steel sector had hoped for the best, but still feared the worst. With the expiration of the EU exemption now confirmed to take effect tomorrow [June 1], unfortunately, our pessimism was justified, and we will now see damage not only to the U.K. steel sector but also the U.S. economy.” 
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The United States is escalating trans-Atlantic and North American trade tensions, imposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico beginning on Friday.

The U.S. also negotiated quotas or volume limits on other countries, such as South Korea, Argentina, Australia and Brazil, instead of tariffs, Commerce Secretary Wilbur Ross also told reporters by telephone. 

President Donald Trump has repeatedly said such measures are necessary to protect American jobs and industries in key manufacturing sectors. 

“The president’s actions are about protecting American steel, American aluminum,” a White House spokesman, Raj Shah, said on Fox News. “They’re critical for national security.”

But the negative reaction from some of America’s most important strategic allies has been quick and fierce.

Canadian Prime Minister Justin Trudeau called the tariffs “totally unacceptable” and vowed retaliation. 

“This decision is not only unlawful, but it is a mistake in many respects,” said French President Emmanuel Macron, warning that “economic nationalism leads to war.”

France’s finance minister, Bruno Le Maire, who met Ross earlier on Thursday, said the U.S. shouldn’t see global trade like the Wild West or Gunfight at the O.K. Corral.

‘Bad day for world trade’

European Commission President Jean-Claude Juncker said the U.S. move marked “a bad day for world trade,” announcing there is “no choice” but to proceed with a World Trade Organization dispute settlement case and additional duties on numerous U.S. imports.

The retaliatory tariffs from the Europeans are expected to target several billion dollars’ worth of American goods, including such iconic American products as Harley Davidson motorcycles and Levi’s jeans, as well as Kentucky bourbon and Tennessee whiskey.

Ross, in Paris, interviewed on CNBC after the announcement, brushed off the retaliation saying, “It’s a tiny, tiny fraction of 1 percent” of trade.

Ross, a banker known for restructuring failed companies prior to joining Trump’s Cabinet, also predicted America’s trading partners “will get over this in due course.”

“The United States is taking on the whole world in trade and it’s not going to go well,” predicted Simon Lester, trade policy analyst at the libertarian Cato Institute.

The action is also not popular with some members of Congress, including those from Trump’s own party, whose states are dependent on exports. 

“Imposing steel and aluminum tariffs on our most important trading partners is the wrong approach and represents an abuse of authority intended only for national security purposes,” said Senate Foreign Relations Committee Chairman Bob Corker, a Tennessee Republican.

“You don’t treat allies the same way you treat opponents,” Republican Senator Ben Sasse of Nebraska said on Twitter. “Blanket protectionism is a big part of why we had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.’ ”

Tennessee has three major auto assembly plants. Nebraska is a significant exporter of cattle, corn, soybeans and hogs. 

Mexico said, in response, it will penalize U.S. imports, including pork bellies, apples, grapes, cheeses and flat steel.

“There’s a reason why” the countries are carefully selecting which American products to target in response, said William Reinsch, senior adviser at the Center for Strategic and International Studies.  

“Most of bourbon is made in Kentucky, which is the state of the Senate majority leader. Harley Davidsons are made in Wisconsin, which is the state of the speaker of the House,” Reinsch told VOA News. “Usually when other countries retaliate, and the Chinese have done something similar, is they’re good at maximizing political pain by picking out products that are made in places where people are politically important.”

“Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers,” said Republican Orrin Hatch, who chairs the Senate’s finance committee and is a longtime advocate of breaking down trade barriers. 

One side of equation 

Expected higher prices for U.S. consumers on some products is only one side of the equation, said Ross, who noted that steel and aluminum makers in the United States are adding employment and opening facilities as a result of the U.S. government action.

“You can create a few jobs, however, you’re going to lose more in the process,” as consuming industries will be placed at a disadvantage of paying more for raw materials compared to their foreign competitors, Lester told VOA News.

Christine Lagarde, managing director of the International Monetary Fund, is warning a trade war will also damage public trust in leaders. 

“First of all, those who will suffer most are the poorest, the less privileged people, those who actually rely on imported goods to have their living,” Lagarde said at a meeting in Canada of finance ministers and central bankers of the Group of Seven nations, adding that long-standing supply chains also would be disrupted.

Trump, in March, announced the United States would impose such tariffs, but he granted exemptions that expire Friday to the European Union and other U.S. allies.

The angst about global trade tensions helped send stock prices lower in the United States on Thursday. The Dow Jones industrial average fell 1 percent, while the broader S&P 500 was off nearly 0.7 percent.

Carol Castiel contributed to this report.
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