1 US nears full employment (Khaleej Times) Federal
Reserve Chair Janet Yellen said she continues to see some slack remaining in
the US labour market even as the economy shows "tremendous progress"
following the financial crisis and the worst recession since the Great
Depression.
"We are coming close to our assigned
congressional goal of maximum employment," Yellen said. Many measures of
unemployment, she said, "really suggest a labour market that is vastly
improved." Still, Yellen said, other broader measures of underemployment
are "higher than one would expect" and show that some slack remains.
Unemployment in the US has been at or below five per
cent since October, down from 10 per cent in October 2009. Jobless claims have
been lower than 300,000 a week for more than a year, signaling firings remain
at a very low level given the size of the labour force.
Yellen said most members of the Federal Open Market
Committee anticipate unemployment will continue to drop, overshooting somewhat
what Fed officials see as its lowest sustainable level. She added that the
committee is not aiming for a level that will drive inflation above the Fed's
two per cent target. "But it's also the case that two per cent is our
goal, and it's not a ceiling," she added.
While the domestic economy is expanding, with solid
gains in employment underpinning consumer spending, persistent global risks
threaten to derail the recovery. Policy makers are concerned that slowing world
growth could reduce corporate investment plans and restrain US exports.
2 UK business department may cut 4,000 jobs (Rowena
Mason in The Guardian) The Conservative cabinet minister in charge of trying to
save jobs in the steel industry is considering plans to cut up to 4,000
employees in his own department and its agencies, and slash costs even more
deeply than George Osborne’s austerity requires, according to official leaked
documents.
Sajid Javid, the business secretary and former
banker, ordered a review of the Department for Business, Innovation and Skills
(BIS) from management consultants McKinsey soon after taking on the job after
the election. A leaked strategy paper marked “official, sensitive” shows BIS is
already planning to cut a minimum of 1,526 posts before 2020.
The job losses could go as high as 4,103 at the top
end of the scale if it takes the advice of McKinsey, whose proposals are under
consideration. This would involve cutting the core staff of BIS by almost 40%. The
aim of the strategy paper is to save BIS £350m, which goes further by £100m
than the department needs to cut to stay inside the Treasury’s spending
controls.
The leak also reveals how BIS is planning major
cost-cutting in agencies that support apprenticeships, with plans to shut down
the Commission for Employment and Skills entirely and reduce staff at the
Skills Funding Agency by 40%.
The strategy paper has been leaked in the week that
Labour called for Javid to be sacked over his laissez-faire approach to Tata’s
withdrawal from UK steel operations, arguing he is ideologically wedded to
small government and a hands-off approach to industry.
3 Uniqlo reflects Japan deflation (Gulf News) When
Japan’s cheap-and-cheerful clothing brand Uniqlo raised its prices in 2014, it
was an endorsement of Prime Minister Shinzo Abe’s efforts to stimulate a
lacklustre economy: with confidence high, even purveyors of affordable jumpers
became price setters.
But as Abe’s expansionary policies struggle to
rekindle growth, Uniqlo has reversed those rises, lowering prices last year and
stepping up discounts again in the first two months of this year. The brand’s
owner, Fast Retailing Co Ltd, now illustrates a bleaker picture of a corporate
sector squeezed by sticky overhead costs, cooling consumer enthusiasm and lower
prices.
“Things aren’t looking good — they’re rather bad,”
Tadashi Yanai, the group’s charismatic CEO told reporters after the retailer
reported quarterly earnings. A stunning move by the Bank of Japan to introduce
negative interest rates in January to try to get companies and consumers
spending again has yet to boost sales, stock prices or arrest an unwelcome rise
in the yen.
Japan’s economy shrank in October-December on weak
exports and lacklustre consumption, and some analysts expect it to have
contracted again in the first quarter of this year, pushing the country back
into recession.
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