Aurelia Butler

The recruitment drive, hosted by the Ministry of Human Resources and Social Security, will last from Sunday to May 26, Xinhua said.China aims to create around 12 million urban jobs this year, up from the 2022 target of at least 11 million. The government aims to keep survey-based jobless rate of around 5.5% this year. The new premier, Li Qiang, said last week that “developing the economy is the fundamental solution for creating jobs,” and the government will continue to pursue an “employment-first” strategy.During the first 10 days of the recruitment drive, 19 offline job fairs, eight cross-region job fairs and job fairs featuring sectors such as manufacturing, medicine and health, Internet and electricity and new energy will be hosted, Xinhua said.While number of college graduates in China will reach a record 11.58 million this year, job seekers expect more job opportunities, more reasonable pay and more reliable social security, human resources minister Wang Xiaoping said this month. China’s survey-based jobless rate was 5.6% in February, but for 16-24 years old it was 18.1%, National Bureau of Statistics data showed. A rise in the jobless rate in February was due to seasonal factors, the bureau said. More

NEW YORK (Reuters) – Some U.S. regional banks’ efforts to raise capital and allay fears about their health are running up against concerns from potential buyers and investors about looming losses in their assets, five sources with knowledge of the discussions said. First Republic Bank (NYSE:FRC) and PacWest Bancorp are among the banks that have been speaking to peers and investment firms about potential deals in the wake of U.S. regulators taking over Silicon Valley Bank and Signature Bank (NASDAQ:SBNY) this month amid a flight of depositors, sources have said.First Republic’s shares have fallen 80% since March 8, when the crisis started, while PacWest shares are down 65%. First Republic declined comment. PacWest did not immediately respond to a request for comment.The five sources, who work at or with major banks and private equity firms and examined such deals, told Reuters that they have decided not to participate for now for fear they could be hit with losses in the investment portfolios and loan books.They requested anonymity because they were not authorized to discuss the confidential deliberations publicly.The investment portfolios where the regional banks have parked the deposits of their clients comprise mainly Treasuries and other securities, such as mortgage bonds. They are worth less than what the banks value them on their books because of a steep rise in interest rates. Some of the loan books of these banks are also underwater, due to high rates and concerns about an economic slowdown. The sources said they were reluctant to participate in these deals without a government backstop on the losses or a more favorable outlook on interest rates. Reuters could not determine whether any banking regulators had been asked by suitors to backstop the portfolio losses and whether they would do so. The Federal Deposit Insurance Corporation (FDIC), which insures deposits and manages receiverships, told banks mulling offers in the auctions for Silicon Valley Bank and Signature Bank on Friday that it was considering retaining some of the assets that are underwater at the failed lenders. Such a backstop, however, is typically reserved for banks taken over by the FDIC. An FDIC spokesperson did not respond to a request for comment.LARGE LOSSESCredit ratings agency Moody’s (NYSE:MCO) Investors Service Inc estimated on Friday that unrealized losses on First Republic’s investment portfolio represented 37.7% of the cash and stock it set aside to absorb losses and warned it would also be difficult to sell some of its residential mortgage loans without a loss.”Such a crystallization of losses, if it were to happen, would very materially weigh on the bank’s profitability and capital,” Moody’s said.One banking executive who studied a deal with First Republic estimated that marking-to-market the California-based bank’s mortgage book in an acquisition would spell a large hit for the acquirer. The government would have to facilitate such a deal, the executive said. It could do so by providing some leeway to the acquirer’s leverage ratios that determine the bank’s debt levels, or backstop it in other ways, the executive added. The executive was not aware of any such discussions.Another complication in cutting a deal with regional banks is the uncertainty over the interest rate outlook, said a lawyer who works on transactions involving banks. The Federal Reserve will decide on Wednesday whether it will raise rates further in its battle against inflation. Those studying deals and trying to assess the future value of regional banks are hoping for clarity on how aggressively the central bank will move to raise rates further, the lawyer said.MUDDLING THROUGHIt is unclear how long some regional banks can muddle through without a deal.While new liquidity backstops created by the U.S. Treasury and regulators last Sunday are keeping the regional banks afloat, the crisis has eviscerated their profitability and made it difficult to continue with business as usual, banking analysts say.Bank of America (NYSE:BAC) analysts wrote in a research note on Friday that the $30 billion in deposits that First Republic’s major peers moved in solidarity to the troubled bank helped stabilized its funding base but did little for its earnings given the flight of some of its customers.”Beyond the accounting mark, the ultimate value that a potential buyer will be willing to pay will also be influenced by their assessment of the potential impairment to the First Republic client franchise,” the analysts wrote. More

Profit margins of US companies have reached levels not seen since the aftermath of the second world war.There is a strong correlation between the rising share of corporate profits in gross domestic product and the sharp price rises in the US after the Covid pandemic, according to a paper published by the University of Massachusetts.Having made windfall profits on the back of commodity price fluctuations and supply bottlenecks, large companies have been emboldened to raise prices further to increase profit margins.They found that there was little evidence that the models used to explain the inflation of the 1970s — such as excess aggregate demand, money supply expansion or increased wage costs that prompted a spiral — applied to this recent rise. Covid-19 price rises are predominantly a sellers’ inflation, they say. Where cost increases are being experienced by all their competitors, companies have felt safe to pass them on in the expectation of an “implicit agreement” that rivals will do the same. Federica Cocco and Keith FrayOur other charts of the week . . . 

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The introduction of remote work as a result of the pandemic has helped boost birth rates, specifically among wealthier and more educated women.“While the long-running decline of fertility rates across the developed world makes it difficult to be optimistic overall about the future trajectory of births, the rise of remote work is one factor that seems likely to help push in the other direction, at least in some subgroups of the population,” said the authors of the analysis carried out by the Economic Innovation Group, a US-based think-tank.Increasing birth rates would give an important boost to economic growth, and counterbalance demographic changes such as an ageing population. The study also found that unmarried remote workers were significantly more likely than those who do not work remotely to plan on getting married in the next year. This is possibly because remote workers have higher migration rates than other workers, meaning those interested in marriage may have been able to relocate closer to a potential spouse.Federica Cocco

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Britons’ approval rating of the leadership of the EU, on the rise since 2013, surpassed 50 per cent in 2022 for the first time since the survey began. At 51 per cent, this is more than the 46 per cent who approve of the UK’s leadership. The last time a majority of Britons approved of the country’s leadership was in 2006, when Tony Blair was prime minister.Federica Cocco

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The majority of Britons support strikes by nurses and ambulance workers. The share has increased by 3 per cent since January, according to polling company Ipsos.Teachers and railway workers are the next most widely supported, with sympathy also up since January, whereas support has declined for strikes in other sectors, including border and passport control staff, civil servants, university staff and driving examiners.Talks on Thursday between ministers and health unions resulted in a promising pay offer. Substantially improved terms for nurses, ambulance staff and other NHS workers in England have raised hopes that other disputes could be resolved soon.The RMT has agreed to ballot members on an improved offer from Network Rail and teaching unions began talks on pay, conditions and workload on Friday.Serena ChanThe European energy crisis has not put customers off big cars. In January, total sport utility vehicle sales grew 14 per cent year on year to 464,000 units — a record 51 per cent share of new car registrations in the EU, according to market researcher Jato Dynamics.While petrol guzzling and diesel models remained the most popular choice, accounting for about three-quarters of new SUV sales, the figures show demand for plug-in hybrid and pure electric versions of the “Chelsea Tractor” are gaining ground. Despite the launch of greener electric models SUV’s continue to be hugely popular. Plug-in hybrid SUVs, which offer a compromise between more polluting internal combustion engines and costly pure electric vehicles, have experienced particularly high interest.Patrick MathurinWelcome to Datawatch — regular readers of the print edition of the Financial Times might recognise it from its weekday home on the front page.Do you have thoughts on any of the charts featured this week — or any other data that has caught your eye in the past seven days? Let us know in the comments.Keep up to date with the latest visual and data journalism from the Financial Times:Data Points. The weekly column from the FT’s chief data reporter John Burn-Murdoch.Climate Graphic of the Week is published every week on our Climate Capital hub page.Sign up to The Climate Graphic: Explained newsletter, free for FT subscribers. Sent out every Sunday, a behind the scenes look at the most topical climate data of the week from our specialist climate reporting and data visualisation team.Follow the Financial Times on Instagram for charts and visuals from significant stories.Follow FT Data on Twitter for news graphics and data-driven stories from across the FT. More

The Federal Reserve will keep raising its benchmark policy rate, holding it above 5.5 per cent for the rest of the year, despite turmoil across the US banking sector, according to a majority of leading academic economists polled by the Financial Times.The latest survey, conducted in partnership with the Initiative on Global Markets at the University of Chicago’s Booth School of Business, suggests the US central bank still has work to do to stamp out stubbornly high inflation, even as it contends with a crisis among midsize lenders following the implosion of Silicon Valley Bank.Of the 43 economists surveyed between March 15 and 17 — just days after US regulators announced emergency measures to stem contagion and fortify the financial system — 49 per cent forecast the federal funds rate to peak between 5.5 per cent and 6 per cent this year. That is up from 18 per cent in the previous survey in December and compares to the rate’s current level of between 4.50 per cent and 4.75 per cent.Another 16 per cent estimated it would top out at 6 per cent or higher, while roughly a third thought the Fed would stop short of these levels and cap its so-called “terminal rate” below 5.5 per cent. Moreover, nearly 70 per cent of the respondents said they did not expect the Fed to deliver cuts before 2024.

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The policy path projected by most of the economists is markedly more aggressive than current expectations reflected in fed funds futures markets, underscoring the uncertainty clouding not only the Fed’s rate decision on Wednesday but also the trajectory over the coming months.Traders have since last Friday scaled back how much more the Fed will squeeze the economy given concerns about financial stability. They now wager the central bank will only lift its policy rate by another quarter of a percentage point before wrapping up its tightening campaign. That would translate to a terminal rate just below 5 per cent. They also increased bets the central bank would rapidly reverse course and implement cuts this year.“The Fed is really caught between a rock and a hard place,” said Christiane Baumeister, a professor at the University of Notre Dame. “They have to continue fighting inflation but now they have to do that against the background of elevated stress in the banking sector.” Baumeister, who participated in the survey, urged officials against “prematurely” stopping their monetary tightening campaign, however, calling it a “matter of keeping the Fed’s credibility as an inflation fighter”.Roughly half of the respondents said the events associated with SVB had led them to slash their forecasts for the fed funds rate by the end of 2023 by 0.25 percentage points. About 40 per cent were evenly divided between the rout causing no change or possibly more tightening in the end versus a half-points’ worth of easier policy from the central bank.A majority thought the actions undertaken by government authorities were “sufficient to prevent further bank runs during the current interest rate tightening cycle”.

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Jón Steinsson of the University of California, Berkeley was one of the panellists to conclude the Fed and its regulatory counterparts had successfully contained the turmoil and said it “would be a mistake to alter the tightening cycle appreciably”.The more hawkish stance stems from a more pessimistic view about the inflation outlook.Most of the economists surveyed expect the Fed’s preferred gauge — the core personal consumption expenditures price index — to remain at 3.8 per cent by year-end, roughly a percentage point lower than its January level but still well above the central bank’s 2 per cent target. In December, the median core PCE estimate for the end of 2023 stood at 3.5 per cent. In fact, nearly 40 per cent of the respondents said it was “somewhat” or “very” likely that core PCE would still exceed 3 per cent by the end of 2024. That is roughly double December’s share.Deborah Lucas, a professor of finance at the Massachusetts Institute of Technology who participated in the survey, said she holds a more benign view about the inflation outlook, but warned the Fed’s tools were largely ineffective to address what she sees as a problem stemming from supply shocks, “aggressive” fiscal policy and elevated savings among Americans.“What the Fed will do if it raises interest rates too aggressively is it will cut off necessary investment and do very little about inflation,” she said.One ongoing debate is how significant a credit crunch is under way across the country as the regional banking sector seizes up.

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Stephen Cecchetti, an economist at Brandeis University who previously led the monetary and economic department at the Bank for International Settlements, said he expects to see demand on the whole “pull back”.“Financial conditions are tightening without them doing anything,” he said of the Fed.A slim majority expect the National Bureau of Economic Research — the official arbiter of when US recessions begin and end — to declare one in 2023, with the bulk holding the view it will occur in the third or fourth quarter. In December, a majority thought it would occur in or before the second quarter.Still, the recession is forecast to be a shallow one, with the economy still growing 1 per cent across 2023. The unemployment rate, meanwhile, is projected to rise to 4.1 per cent by year-end, up from its current 3.6 per cent level. It will eventually peak between 4.5 per cent and 5.5 per cent, 61 per cent of the economists reckon. More