Aurelia Butler

(Reuters) – Sheep herders in the U.S. West have banded together to sue their employers, accusing them of operating an illegal cartel that artificially suppresses their wages, according to court documents filed Wednesday in Nevada.The case could have implications for how antitrust laws are applied to labor markets, according to legal experts, as the Biden administration pushes for greater competition in every sector of the economy. The suit alleges that ranches coordinate through the Western Range Association (WRA), a ranching trade group, to suppress sheepherder wages and avoid competing for labor.Herders apply to jobs through the WRA which then assigns them to ranches, leaving no room for the herders to negotiate or shop around among ranches, the complaint said.The arrangement violates the Sherman Act, a 130-year-old antitrust law that prohibits wage-fixing agreements among employers, the suit alleged.”Even workers who make some of the lowest wages in our economy should be able to benefit from the fair competition that our antitrust laws ensure,” said David Seligman, executive director of Towards Justice, which brought the suit. Ellen Jean Winograd, WRA’s general counsel, said the suit’s allegations “appear to lack merit,” but that the group could not comment in more detail.Sheepherders are typically men from rural Peru who come to the United States on agricultural H-2A visas and live in isolated areas, according to the complaint. Their wages have stagnated even as pay for other agricultural labor has risen in recent years, the complaint said.An earlier version of the suit was dismissed by the U.S. Court of Appeals for the Tenth Circuit in 2017 because the court said the herders had not sufficiently proven collusion. Several antitrust experts have argued the case was wrongly decided.There are around 100,000 sheep farms in the United States that sell about $750 million of sheep, lambs, and wool annually, according to Department of Agriculture data. More

The People’s Bank of China (PBOC) will use various policy tools to step up liquidity injections to keep liquidity in the economy reasonably ample, Pan told a news conference.The central bank aims to stabilise economic growth, employment and prices, Pan said, adding that financial institutions should maintain prudence in their operations and prevent risks.”We will continue to strengthen the implementation of prudent monetary policy and create a sound monetary and financial environment,” Pan said.China’s cabinet has announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its pandemic-ravaged economy.China’s trade in goods is expected to maintain a reasonable surplus this year and the relatively stable investment returns in yuan assets will help attract foreign investment, Pan said.The central bank has pledged to step up support for the slowing economy, but analysts say the room to ease policy could be limited by worries about capital outflows, as the U.S. Federal Reserve raises interest rates.China’s cabinet said on Wednesday that it will increase the credit quota for policy banks by 800 billion yuan ($120 billion) to enable them to support infrastructure construction, according to state TV.Premier Li Keqiang has vowed to achieve positive economic growth in the second quarter, although many private sector economists have pencilled in a contraction.Zou Lan, head of the PBOC’s monetary policy department, told the briefing that the credit quota for policy banks will help improve their ability to finance infrastructure projects. More

OTTAWA (Reuters) – An extra C$8,300 ($6,600) in your pocket. That is roughly how much the average Canadian saved during the pandemic, with the central bank betting on C$40 billion in added spending through the end of next year as consumers draw down those stockpiles.But soaring inflation has already offset two-thirds of the buying power of that excess cash, according to one estimate, with some Canadians dipping in to pandemic savings to pay for everyday essentials instead of a new paddleboard or a weekend getaway.”When I adjust for inflation, the extra purchasing power from excess savings has been eroded pretty significantly by higher prices,” said Royce Mendes, head of macro strategy at Desjardins Group. “Paddleboards haven’t gone up two-thirds,” he added. “But the price of everything you consume has gone up 7%. And that is eating in to this buffer that you had to buy the extra goods or go out for dinner that extra time.”Rising food and shelter costs drove Canada’s inflation rate to a three-decade high of 6.8% in April. The Bank of Canada responded with a 50-basis-point interest hike on Wednesday, taking the benchmark rate to 1.5%, and hinted at a more aggressive pace to come.It said stronger exports and robust consumer spending will fuel “solid” second-quarter growth.But spend-happy consumers could vanish more quickly than the Bank expects as their purchasing power dwindles, raising questions about rosy growth projections just as higher interest rates slow the housing market.”In some ways you are already starting to see some cracks emerge in the foundation of consumer confidence,” Mendes said.EXCESS CASHCanadians saved an extra C$300 billion during the pandemic, economists estimate. Of that, some went into stocks, housing and other investments, but roughly C$100 billion remains sitting in bank accounts just waiting to be spent.So far, spending is holding up against higher prices. Credit card outlays are running about 30% above 2019 levels, according to the RBC Consumer Spending Tracker.But BMO’s Real Financial Progress Index found more than 80% of Canadians are adjusting their lifestyle to offset higher costs, with nearly a third reconsidering vacations. And just 14.8% of consumers think now is a good time to buy big-ticket items, the Conference Board of Canada said.The pessimism is fueled by a combination of hot inflation, rising interest rates and the uncertainty caused by Russia’s invasion of Ukraine, said Sohaib Shahid, director of economic innovation at the Conference Board.”Consumers don’t like uncertainty and these tensions have brought about a lot of uncertainty,” he said.On the flip side, higher-income households saved more than others during the pandemic and are far less sensitive to rising prices, said economists.Still, tumbling housing prices and stock market declines are eroding the wealth effect, while surging gasoline prices and rising interest rates are squeezing budgets.”For now, consumers are hanging in,” said Sal Guatieri, senior economist at BMO Economics.($1 = 1.2648 Canadian dollars) More

HONG KONG (Reuters) – China’s proposed cybersecurity rules for financial firms could pose risks to operations of western companies by making their data vulnerable to hacking, among other things, a leading lobby group has said in a letter seen by Reuters. The latest regulatory proposal comes at a time when a string of western investment banks and asset managers are expanding their presence in China, either by setting up wholly-owned units or by taking a bigger share in existing joint ventures.The China Securities Regulatory Commission (CSRC) released the draft Administrative Measures for the Management of Network Security in the Securities and Futures Industry on April 29, and offered a month-long public consultation on the proposals.The draft rules seek to make it mandatory for investment banks, asset managers, and futures companies with operations in China to share data with CSRC, allow regulator-led testing, and help set up a centralised data backup centre. Morgan Stanley (NYSE:MS) and HSBC are among those who have benefited in recent months from China’s opening up of financial sector for foreigners, following Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM), which won nods to run local units last year.Lobby group, the Asia Securities Industry and Financial Markets Association (ASIFMA), in a letter addressed to the CSRC and dated May 27, expressed concerns of its members about the draft rules as they anticipate risks in sharing sensitive data.The letter’s content, which has been reviewed by Reuters, has not been reported before. ASIFMA, which has more than 160 members comprising leading financial institutions from both the buy and sell side, banks, law firms, and market infrastructure service providers, did not confirm the letter and declined to comment on its content. In response to Reuters request for comment, the CSRC said that ASIFMA submitted its opinion on May 31, two days after the consultation period ended. “However, we still highly value the feedback forwarded by relevant associations,” it said, adding the regulator was “carefully studying the opinions and suggestions” and will continue to communicate with them.The proposed new data rules for financial firms also comes against the backdrop of Beijing’s tightened oversight of data security mainly in the tech sector as part of a wider regulatory crackdown, which has roiled the country’s stock markets and stalled offshore company listings.’HUGE RISKS’The draft rules require the sharing of data by financial firms for various purposes, but the lobby group is concerned passing on sensitive data will makes companies in the sector vulnerable to “hackers and other bad actors”.Global banks and asset managers are also pushing back on a requirement to introduce a sector-wide data backup centre.”This not only poses huge risks to all core institutions and operating institutions on an individual basis, but also brings significant systemic risks for the sector in China and globally given the inter-connectedness of the global financial sector, if the data is compromised or leaked,” the ASIFMA letter said.The draft rules also stipulates that the CSRC could conduct penetration-testing — a simulated cyber attack against the operational system — and system scanning on securities, futures and fund firms. However, ASIFMA flagged concerns of global banks that regulator-led or regulator-commissioned penetration testing pose “real risks to firms due to the potentially disruptive nature of penetration testing and the sensitivity of testing results”.”Testing systems and applications without operational context could create significant disruption to firm operations,” the lobby group added.The regulator has not set any timeline for the issuance of the final rules or for their implementation. More

Investing.com — Sheryl Sandberg is leaving Meta Platforms after 14 years. Elon Musk issues an ultimatum to Tesla employees. Oil slides on reports that Saudi Arabia may ramp up production in response to urging from the United States. OPEC is to meet and U.S. stocks are set for a higher open but concerns over the economic outlook linger. Data on initial jobless claims and private sector hiring are due. Here’s what you need to know in financial markets on Thursday, June 2.Meta Platforms (NASDAQ:FB) Chief Operating Officer Sheryl Sandberg announced in a Facebook post late Wednesday that she is leaving the company after 14 years.The announcement initially sent Meta’s shares down 4%, before the stock erased the losses in after-hours trade.Chief Growth Officer Javier Olivan will take over as chief operating officer, CEO Mark Zuckerberg said in a separate Facebook post, but he added that he did not plan to replace Sandberg’s role directly within the company’s existing structure.Sandberg’s departure marks an end of an era for Meta, which is shifting focus toward hardware products and the “metaverse” after years of scandals over privacy abuses and the spread of conspiratorial content on its platforms, as well as plateauing user growth on its flagship app Facebook.Tesla (NASDAQ:TSLA) CEO Elon Musk has issued an ultimatum to workers at the electric car company, calling on them to return to the office for 40 hours per week or resign, according to a leaked email.”Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,” Musk wrote in the email sent on Tuesday night.”If you don’t show up, we will assume you have resigned.”Musk, who has agreed to take Twitter Inc (NYSE:TWTR) private in a $44 billion deal, responded to a screenshot of the leaked emails via Twitter saying, “They should pretend to work somewhere else.”Twitter’s remote work policy could now be under threat. The tech company was among the first to declare a work-from-home-forever policy in the initial days of the pandemic.3. Stocks muted, CrowdStrike eyedU.S. stock markets are seen opening higher later even as market sentiment remained downbeat a day after JPMorgan CEO Jamie Dimon warned that the U.S. economy is facing a “hurricane” caused by the Federal Reserve and the war in Ukraine. He added that his company is “going to be very conservative with our balance sheet.”Stocks likely to be in focus later include online pet product retailer Chewy (NYSE:CHWY) which surged in after-hours trade following quarterly earnings that came in ahead of expectations, while Hewlett Packard Enterprise (NYSE:HPE) reported slight misses in both earnings and revenue.Earnings from big tech names Crowdstrike Holdings Inc (NASDAQ:CRWD) and Asana Inc (NYSE:ASAN) are due after the close, along with results from retailers Lululemon Athletica (NASDAQ:LULU), Designer Brands (NYSE:DBI) and RH (NYSE:RH).The Labor Department will provide the most important data point with its weekly report on initial jobless claims at 8:30 AM ET. ADP will release data on private sector hiring at 8:15 AM ET.The employment data is coming ahead of Friday’s nonfarm payrolls report for May with economists expecting the economy to have added 320,000 jobs last month. While still firm, it would represent the smallest jobs growth in around a year as the labor market transitions to more moderate growth as the effects of the pandemic fade.Investors have been watching economic data closely for clues as to what it might mean for interest rates.Meanwhile, Cleveland Fed President Loretta Mester is due to speak later, a day after St. Louis Fed President James Bullard called for further aggressive rate hikes to bring down inflation, adding that rates could be cut late next year or in 2024.5. Oil slides; OPEC meeting, EIA data in focusOil prices fell around 2% following reports that Saudi Arabia could ramp up oil production to offset a decline in Russia’s output in response to a call from the U.S.Russia’s oil exports have been hit by U.S. and European Union sanctions imposed in response to its invasion of Ukraine.Energy traders were also eyeing an OPEC+ meeting to discuss supply policy for any indications on production plans. OPEC is expected to stick to its plans for modest monthly increases in oil output, despite tighter global markets.Brent was down $2.57, or 2.2% to $113.72 a barrel by 05:31 AM ET (0931GMT), having risen 0.6% the previous day, while U.S. crude fell $2.65, or 2.3%, to $112.51 a barrel, after a 0.5% rise on Wednesday.The Energy Information Administration’s data on U.S. stockpiles are due at 11:00 AM ET, a day later than usual due to the Memorial Day holiday.–Reuters contributed to this report More

Some sectors, like travel and entertainment, are expected to make up a large share of aggregate payrolls growth as Americans allocate more of their discretionary income to services. But Federal Reserve interest-rate hikes, recession concerns and tighter financial conditions suggest an eventual hiring slowdown in some of the industries that experienced the sharpest job growth over the last two years. Employment in some areas, particularly housing, are at risk of weakening later this year and next as borrowing costs climb.“I think looking at the aggregate numbers tells you one sliver of information, but you have to dig into the details to have the full story because the economy is in a very different place depending on what sector you’re looking at,” said Michelle Meyer, US chief economist at Mastercard Economics Institute. While the composition of employment has shifted in the last two years, the US has now recovered 95% of jobs lost during the first two months of the pandemic. And the unemployment rate is now within striking distance of matching the lowest level since 1969.Friday’s employment report is projected to show the economy added about 325,000 jobs in May — healthy, but still the smallest in a year.In addition to less hiring in residential construction, an ongoing rotation in consumer demand from goods into services “likely reduces the need for jobs in sectors such as transportation and warehousing,” Bloomberg Economics said. But leisure and hospitality, which remains 1.4 million jobs short of pre-pandemic levels, should experience strong job growth as the sector continues to recover. At the same time, the technology industry, which thrived during the pandemic, is beginning to lose some investor interest. Venture-backed startups as well as public companies like Netflix Inc (NASDAQ:NFLX) have either cut jobs, instituted hiring freezes, or both. ‘New Equilibrium’“It’s less about filling the hole that was created from the pandemic and it’s more about finding this new equilibrium in the economy where there is the right amount, the right matching between where the jobs are and where the people are in terms of looking for those jobs,” Meyer said.Meantime, the large mismatch between labor demand and supply has driven worker pay higher over the last year, but strength in some industries and weakness in others may ultimately mean a divergence in wage growth, she said. After many months of hefty wage increases, some companies are becoming more cautious when it comes to salary increases as they grow concerned about profit margins at the same time materials costs climb. Friday’s jobs report is expected to show annual average hourly earnings growth of 5.2% in May after 5.5% a month earlier.“Sectors of the economy that still have this very strong demand for workers and some limitations of supply, wage growth is still going to be increasing at a healthy clip,” Meyer said. “And in others, where job vacancies are coming down, they’re closer to kind of healing, wage growth is presumably going moderate.”So far, the job openings data show few signs of breaking lower. The Labor Department on Wednesday said vacancies eased to a still-elevated 11.4 million in April from a record 11.9 million a month earlier.Financial conditions related to higher rates and stock market performance may also weigh on the labor market in the second half of this year. The number of comments in earnings calls about labor shortages appear to have peaked, while “layoff”, “hiring freeze” and “overstaff” mentions ticked up from historical lows, according to an analysis by Bank of America Corp.“The tightening of financial conditions you’ve seen over the past six months — the pretty sharp tightening — and stock prices being down 20% or so with rising credit cost, that’s certainly going to put a chill on hiring,” said Brett Ryan, senior US economist at Deutsche Bank AG.To some extent, job growth — whether or not there’s a sharp economic downturn — is expected to slow given the low level of unemployment and expectation that the participation rate may not return to its pre-pandemic peak.  “I think that the demand is still there, but demand is peaking probably,” Ryan said. And it’s likely “to shift lower over the next year or so.”©2022 Bloomberg L.P. More