Aurelia Butler

UK ministers have offered junior and mid-ranking civil servants a one-off payment of £1,500 in a push to end a long-running dispute over pay and jobs. In a letter seen by the Financial Times, Simon Case, cabinet secretary and the UK’s most senior mandarin, told civil service colleagues on Friday that the lump sum was “in recognition of your public service and the challenges to the cost of living”. The deal would also include a freeze on current redundancy compensation levels until 2025 and a pledge to avoid compulsory redundancies “where possible”, Case noted in his letter, which was cosigned by Alex Chisholm, permanent secretary at the Cabinet Office. The proposals come as ministers push to end the biggest wave of public sector strikes in decades, in which hundreds of thousands of civil servants have walked out over demands for higher pay amid the cost of living crisis. Case’s letter followed meetings earlier on Friday between Cabinet Office minister Jeremy Quin and leaders of the three main civil service trade unions, building on pay increases outlined previously.The government in April set out plans to allow Whitehall departments to award staff an average pay rise of 4.5 per cent, with an extra 0.5 per cent increase for lower-paid workers. But the Public and Commercial Services union, Prospect and the FDA all criticised the deal as significantly worse than settlements offered to other public sector staff.According to official civil service workforce data up to March last year, the one-off £1,500 payment for the 2023-24 financial year would apply to roughly 400,000 full-time employees and 100,000 part-time staff, who are in line to receive a prorated payment. Pay for senior officials is determined by a different process.Officials said the proposed payment factored in fairness for the taxpayer and UK prime minister Rishi Sunak’s promise to halve inflation this year.Responding to the offer, the PCS said on Friday that the Cabinet Office had “listened and responded to the concerns of our members after . . . the most industrial action in the union’s history in this dispute”. It added that its national executive committee would meet on June 5 to scrutinise the deal.

Mike Clancy, general secretary of Prospect, which last week called off a strike planned for next week to allow for talks with Quin, also welcomed the deal. He said that while walkouts by his members had “been critical in getting to this point”, the offer “in principle addresses the three issues at the heart of this dispute” and would be consulted on.Meanwhile Dave Penman, general secretary of the FDA, which represents senior officials, said the union’s concerns had “been heard” after it threatened to ballot members for national walkouts over pay for the first time in 40 years. Describing the lump sum as “a significant amount of money”, he said: “For the first time in many years, we have reached a tangible, positive outcome for the civil service which compares well with the rest of the public sector.”Penman added that the FDA’s executive committee would meet on June 8 to formally consider the package and its paused ballot for industrial action.Quin said he was “determined that civil servants are rewarded fairly for the vital work they do across the country” and pleased with unions’ “constructive engagement”. More

Traders now see about a one-in-three chance that the Fed will deliver an 11th straight rate increase at its June 13-14 meeting, up from about one-in-four before the Labor Department report, which showed employers added 339,000 jobs in May, far more than the 190,000 economists had expected. Average hourly earnings, however, gained 4.3% from a year earlier, down from a 4.4% increase in April, and the unemployment rate rose to 3.7% from 3.4%, both signs that heat may be coming out of the labor market.”That is a softening effect and is this the mythical soft landing? Looks like that,” said Kim Forrest, chief investment officer at Bokeh Capital Partners. “This low wage inflation number is very good news for those of us who believe the Fed should pause.”Still, the strong employment gains kept alive anticipation in financial markets for the Fed to lift its benchmark rate another quarter point, to the 5.25%-5.5% range, by July. Traders see that outcome about twice as likely as a continued hold, although there is plenty more data between now and then that could sway those bets one way or another. More

(Reuters) – U.S. stock indexes eyed a higher open on Friday after data showed a moderation in wage growth in May boosted bets that the Federal Reserve will skip raising interest rates this month, while the country averting a debt default added to cheer.The Labor Department’s closely watched employment report showed unemployment rate at 3.7% in May against a forecast of 3.5%, while average hourly earnings were at 0.3%, down from 0.4% in April, highlighting a cooling in wage inflation.Non-farm payrolls increased by 339,000 jobs vs. expectations of 190,000 additions.”This is a reflection of a labor market that, while still robust, is softening gently, not rapidly. That’s exactly what the Fed would like to see,” said Art Hogan, chief market strategist at B Riley Wealth in New York.”The Fed wants to tame inflation without crushing the jobs market, and this is another piece of evidence that they’re actually well along their way to getting that accomplished.” The data brought relief to investors who now expect the Fed to skip an interest rate hike this month for the first time since starting its aggressive policy tightening more than a year ago.Fed funds futures trading showed an over 70% probability that the Fed will hold interest rates steady at its June 13-14 policy meeting. [FEDWATCH]Also lifting the mood, the Senate passed a bill late on Thursday to lift the government’s $31.4 trillion debt ceiling, avoiding a catastrophic, first-ever default. At 8:52 a.m. ET, Dow e-minis were up 183 points, or 0.55%, S&P 500 e-minis were up 17.25 points, or 0.41%, and Nasdaq 100 e-minis were up 25.5 points, or 0.18%. Lululemon Athletica (NASDAQ:LULU) Inc jumped 15.1% premarket upon raising its annual sales and profit forecasts on Thursday as wealthy Americans bought its pricey activewear despite high inflation. This helped boost shares of sportswear companies in both the United States and Europe, with Dow Jones Industrial Average component Nike Inc (NYSE:NKE) up 3.4%. Germany’s Adidas (OTC:ADDYY) and Puma rose around 5% each in European trading. Broadcom (NASDAQ:AVGO) Inc dipped 0.1% after reporting quarterly results. The chipmaker forecast third-quarter revenue above market estimates. However, analysts said the outlook was disappointing, as expectations were stacked up against a blockbuster guidance provided by Nvidia (NASDAQ:NVDA) Corp last week. Shares of Nvidia, the world’s most valuable chipmaker, rose 0.7%. More

WASHINGTON (Reuters) – U.S. employment increased more than expected in May, but a moderation in wages could allow the Federal Reserve to skip an interest rate hike this month for the first time since embarking on its aggressive policy tightening campaign more than a year ago. Nonfarm payrolls increased by 339,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Data for April was revised up to show payrolls rising by 294,000 jobs instead of 253,000 as previously reported.Economists polled by Reuters had forecast payrolls increasing by 190,000. Despite strong hiring, the unemployment rate rose to 3.7% from a 53-year low of 3.4% in April. Wage pressures are also subsiding, which should offer some comfort to Fed officials battling to bring inflation back to the U.S. central bank’s 2% target. Average hourly earnings gained 0.3% after rising 0.4% in April. That lowered the year-on-year increase in wages to 4.3% after advancing 4.4% in April. Annual wage growth averaged about 2.8% prior to the pandemic. The report indicated the labor market remained strong and offered more evidence that the economy was far away from a dreaded recession, though more pockets of weakness are emerging.Despite massive layoffs in the technology sector after companies over-hired during the COVID-19 pandemic and the drag from higher borrowing costs on housing and manufacturing, the services sector, including leisure and hospitality, is still catching up after businesses struggled to find workers over the last two years. Industries like healthcare and education also experienced accelerated retirements. The backfilling of these retirements and increased demand for services are some of the factors driving job growth. Pent up demand for workers was underscored by Labor Department data this week showing there were 10.1 million job openings at the end of April, with 1.8 vacancies for every unemployed person.Most economists expect payrolls growth to continue at least through the end of the year. Early on Friday, financial markets saw a more than 70% chance of the Fed keeping its policy rate unchanged at its June 13-14 meeting, according to CME Group’s (NASDAQ:CME) FedWatch Tool. The Fed has raised its benchmark overnight interest rate by 500 basis points since March 2022. More

US jobs growth was almost twice as strong as forecast in May, in an unexpected sign of labour market resilience ahead of a decision by central bank officials over whether to hold interest rates steady or push ahead with another increase.The US economy added 339,000 new non-farm jobs last month, according to figures published by the Bureau of Labor Statistics on Friday, compared with expectations of around 195,000. Figures for the previous two months were also revised upwards.However, the unemployment rate rose slightly more than expected, from 3.4 per cent to 3.7 per cent, while month-on-month wage growth cooled to 0.3 per cent. Wage growth edged down but remained high at 4.3 per cent on an annual basis, highlighting the tightness in the labour market.Employment and wage growth are key drivers of inflation, particularly in the services sector, and economists and officials have been watching for signs of a slowdown in these measures as an indicator that price pressures are also on course to slow.Economists traditionally look for wage growth to fall to about 3.5 per cent for the Fed to hit its 2 per cent inflation target.The unexpectedly strong data could challenge expectations that the central bank will pause its cycle of interest rate increases at its next meeting in mid-June after 10 consecutive rate rises.Several senior central bank officials had suggested this week they could pause tightening for a month to give themselves more time to assess the effect of their actions so far.Philip Jefferson, president Joe Biden’s pick to become the next Fed vice-chair, on Wednesday said “skipping a rate hike at a coming meeting would allow the committee to see more data before making decisions about the extent of additional policy firming”, but added a pause would not stop the central bank from resuming increases in July.Philadelphia Fed president Patrick Harker also suggested skipping a rate rise for one meeting.However, Friday’s data is the latest in a series of figures that have reinforced the challenges of bringing inflation back towards its target level, following elevated job openings and stubbornly high core inflation figures. Cleveland Fed president Loretta Mester told the Financial Times earlier this week that there was “no compelling reason to pause”.Futures markets on Thursday afternoon were pricing in a 25 per cent chance that rates increase this month, compared with a peak of 70 per cent earlier in the week. However, investors still see a decent likelihood of another rate rise by the Fed’s following meeting in July. More

Shares of the company sank 37% before the bell on Friday and were set to open at their lowest level in about six months. The stock could erase most of the 42% rise it has posted so far this year, if losses hold through regular trading.More than half of the 30 analysts covering the stock lowered their target prices, citing the longer deal cycles and waning demand from enterprise customers, who are holding back on new orders due to high inflation and rising interest rates. The median price target on the stock is now $18, which is 13% lower than its last closing price. The company trades at more than 14 times its 12-month forward sales estimates, pricier than sector bellwether Palo Alto Networks (NASDAQ:PANW) Inc’s price to sales ratio of 12.05. Factors other than a weak economy seem to be impacting SentinelOne, said BTIG analysts, downgrading the stock to “neutral”. “Given the degree of the Q1 miss after the company initially guided in mid-March and the magnitude of the guide down, it simply feels like something else is at play here,” they said.SentinelOne on Thursday posted quarterly revenue growth of about 70%, its weakest since going public, and predicted a slower rise of 38% in the second quarter. Both figures missed estimates. Some brokerages pointed to competitive pressure from the likes of Microsoft Corp (NASDAQ:MSFT) and larger peer CrowdStrike Holdings (NASDAQ:CRWD) Inc .Guggenheim analysts, meanwhile, said the company’s forecasts do not completely reflect an economic drop, and that “it is hard to have any confidence in forecasts at this point”. More

WASHINGTON (Reuters) – The latest standoff over the U.S. debt ceiling, resolved just days before the government faced a devastating default, has prompted some to call for the country to ditch its self-imposed borrowing limit. That’s not likely to happen any time soon. Though the showdown unnerved investors and prompted threats of a second U.S. debt downgrade in a little over a decade, proposals to abolish the debt ceiling have gained little traction in Congress in recent years. Republicans have shown no interest in abandoning a point of leverage that they have used to win trillions of dollars in spending cuts from Democratic administrations. “There’s no other way to address the spending habits that we’ve got,” said Republican Senator Mike Rounds.This year’s debt standoff and the past two major ones — in 2011 and 2013 — all played out with a similar power divide in Washington, with a Democratic president and Senate majority, and Republican control of the House of Representatives.But Democrats did not try to abolish the debt ceiling when they controlled the White House and both chambers of Congress in 2021 and 2022. Now they lack the means to do so.Last November, after Democrats lost their majority in the House of Representatives but before the Republican majority was sworn in, Treasury Secretary Janet Yellen warned Democratic lawmakers to deal with the debt ceiling then to avert a crisis. Her calls went unheeded.As a result, Washington will have to confront the issue again before the current agreement expires on Jan. 1 2025. ‘OUTLIVED ITS USEFULNESS’Some budget hawks who previously supported the debt ceiling now argue that the growing dysfunction in Washington has made the risk of default too great. “If it was ever a useful tool, it’s outlived that usefulness and it’s time to get rid of it,” said Steve Ellis, president of Taxpayers for Common Sense, a watchdog group that dropped its support for the debt ceiling earlier this year.The United States is one of only two industrialized countries that requires policymakers to approve payments for debts it has already incurred. The other country, Denmark, has raised its limit high enough to render it irrelevant.”We’re really the only country that does this to ourselves, and it has proven a complete failure in limiting the deficit in any way,” said Democratic Representative Bill Foster, who has written legislation that would abolish the debt ceiling.Foster’s bill has drawn the support of 44 House Democrats, and he says Republicans have told him privately they support the idea. But none have endorsed it publicly.Similar legislation in the Democratic-controlled Senate has likewise failed to pick up Republican support.Congress has voted to raise or suspend the debt ceiling 21 times since the last time the country posted a budget surplus in 2001. During that time, the debt load has grown from 27% of GDP to 98%, government statistics show, as lawmakers have signed off on wars, tax cuts and economic stimulus packages while expanding safety-net programs.But the debt ceiling has occasionally proven useful as a way to force lawmakers to face the consequences of their tax and spending policies. Congress paired several debt-ceiling hikes with bipartisan budget deals in the 1980s and 1990s that led to the balanced budgets by the end of the century.More recently, Republicans leveraged a debt-ceiling vote to win more than $1 trillion in spending restraint from Democratic President Barack Obama in 2011, and $1.3 trillion from Biden this time around. “The debt limit is a terrible tool to address deficits, but it’s the only one we’ve got,” said Brian Riedl, a fellow at the conservative Manhattan Institute. Riedl and other independent budget experts have floated ways for Congress to reckon with the national debt while taking the threat of default off the table. The Bipartisan Policy Center has suggested that the debt ceiling could be raised automatically when Congress passes an annual budget, while Riedl says the budgeting process itself should be less siloed and flexible. Absent those reforms, many budget experts say the debt ceiling is the only way to force some sort of fiscal restraint.”I would never just drop the debt ceiling and do nothing else in its stead. It is the only fiscal speed bump there is,” said Maya MacGuineas of the Committee for a Responsible Federal Budget. More