Aurelia Butler

“Absolutely,” Senate Minority Leader Mitch McConnell told reporters when asked about the issue.Democrats have been trying to alter the rules so they could pass legislation with a simple majority, and some have renewed calls for filibuster changes to make it easier for the party to codify abortion rights. More

“We’re going to work. We’re already doing so together on development, on exploration, processing, new technologies,” Lopez Obrador told a regular news conference.Bolivia, Chile and Argentina sit atop the so-called “lithium triangle,” a region containing nearly 56% of the world’s resources of the metal, according to the most recent figures from the United States Geological Survey (USGS).Mexico has no commercial lithium production but boasts potential deposits that if proven economically viable, could catapult it to major producer status. Last month, its Congress passed a bill to nationalize the metal, tightening control of strategic mineral resources, with Lopez Obrador saying he would review all contracts to exploit the metal. Close to a dozen foreign companies in Mexico hold active mining concessions, including permission to prospect for lithium, including the country’s most advanced project Bacanora Lithium, which is controlled by Chinese firm Ganfeng Lithium Co.A branch of the International Chamber of Commerce has argued that the law nationalizing the country’s future lithium industry violates trade obligations and could prove costly to the government if mining companies seek to recoup losses.The metal is going through a price boom since the start of last year amid a global push toward electric modes of transportation, driving huge demand from carmakers and battery firms to shore up supply.”Chile already participates in Latin American initiatives for cooperation in the exchange of knowledge, experiences, science and technology, and in this sense, we are willing to participate in initiatives that bring our peoples closer together,” Chilean Mining Minister Marcela Hernando told Reuters.Chile has the third largest lithium reserves globally and is the second biggest producer, while neighboring Bolivia has hardly any production despite having larger resources than any other country, according to USGS data.For its part Argentina holds the spot of fourth top producer of lithium worldwide and is looking to speed up development, held back for years by red tape, high tax rates, rampant inflation and currency controls. More

WASHINGTON (Reuters) – U.S. job openings increased to a record high in March as worker shortages persisted, suggesting that employers could continue to raise wages and help keep inflation uncomfortably high.The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday also showed a record 4.5 million people voluntarily quit their jobs, underscoring the growing wage pressures. The government reported last week that compensation for American workers notched its largest increase in more than three decades in the first quarter.”For the economy, this points to another strong jobs report on Friday, and for workers, this means continued strong wage increases, especially for those who change jobs,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia. “The situation likely will continue well into this year given the Federal Reserve’s efforts to cool the labor market probably won’t gain traction for months.”Job openings, a measure of labor demand, rose by 205,000 to 11.5 million on the last day of March. The second straight monthly increase lifted job openings to the highest level since the series started in 2000. The retail sector led the rise, with an additional 155,000 unfilled jobs. Manufacturers of long-lasting goods reported 50,000 more vacancies.But job openings decreased by 69,000 in the transportation, warehousing and utilities industry. State and local government education had 43,000 fewer vacancies, while job openings in the federal government decreased by 20,000. Job openings increased in the South but fell in the Northeast, Midwest and West. Economists polled by Reuters had forecast 11 million vacancies. The job-workers gap, which Goldman Sachs (NYSE:GS) argues is a better measure of labor market tightness, widened to 5.6 million from 5.08 million, accounting for an all-time high of 3.4% of the labor force, up 0.3 percentage points from February. According to Goldman Sachs, narrowing the gap halfway by 2.5 million would be enough to slow the fast pace of wage growth. Graphic: JOLTS – https://graphics.reuters.com/USA-STOCKS/akvezyjxmpr/jolts.png The JOLTS data is being closely watched by the Federal Reserve, which has adopted an aggressive monetary policy stance as it battles skyrocketing inflation, with annual consumer prices surging at rates last seen 40 years ago.The U.S. central bank is expected to hike interest rates by half of a percentage point on Wednesday, and likely to start trimming its asset holdings soon. The Fed raised its policy interest rate by 25 basis points in March.Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices were mostly higher.EXCESS LABOR DEMAND”Traditionally, the Fed has concentrated on unemployment as a measure of the number of workers who can’t find jobs,” said Lou Crandall, chief economist with Wrightson ICAP (LON:NXGN) in Jersey City, New Jersey. “In today’s environment, the Fed is more focused on the number of firms who can’t find workers. The Fed’s near-term policy goal is to slow aggregate spending enough to reduce the excess demand for labor.” The job openings rate climbed to 7.1%. That was up from 7.0% in February and matched December’s all-time high. The job openings rate increased in establishments with 50 to 999 employees but declined in businesses with less than 50 workers.Hiring fell by 95,000 jobs to 6.7 million in March. Modest increases in manufacturing, professional and business services, and leisure and hospitality were offset by declines in financial activities, education and health services, government, and trade, transportation and utilities. There are now 70% more jobs available than new hiring. There were a record 1.92 jobs per unemployed person in March. “The persistent difficulty that employers have in filling positions will push wages higher and spur employers to automate operations or find other efficiencies to make do with smaller staffs,” said Sophia Koropeckyj, a senior economist at Moody’s (NYSE:MCO) Analytics in West Chester, Pennsylvania. “These challenges will only grow as more baby boomers leave the labor force. Companies will open operations in parts of the country with more available workers or at least will rely more on remote workers who reside in areas with better demographics.”With jobs abundant, workers are quitting in droves. Quits increased by 152,000, lifting the total to a record 4.5 million. They were concentrated in the professional and business services industry, where resignations increased by 88,000. In the construction sector, quits rose by 69,000. The number of quits increased in the South and West. The quits rate climbed back to the all-time high of 3.0% scaled in late 2021 from 2.9% in February. The quits rate is viewed by policymakers and economists as a measure of job market confidence. The higher quits rate suggests wage inflation will likely continue to build up as companies scramble for workers.Layoffs increased in March but remained at low levels. The layoffs rate held at 0.9% for a third straight month. More

In a few short weeks, assumptions have been dramatically overturned on how far Russia was prepared to go in its war against Ukraine — and how far western countries would go in response. The EU is edging towards a phased embargo on Russian oil exports, on top of similar US and UK moves. This is a momentous but risky move. The US has worried that moving too fast could drive up global oil prices; Germany has warned of the economic hit even while signalling it will back an embargo. Handled carefully, however, the costs can be contained. And the pain for Russia is ultimately far greater.Though Russia’s gas exports often attract more attention, Moscow earns much more from selling oil and oil products — the biggest single source of economic rents to Vladimir Putin’s regime and war machine. Rystad Energy, a research group, estimates that higher prices mean the Kremlin is set to generate $180bn in oil tax revenues this year, despite traders refusing to take some Russian crude — equivalent to 60 per cent of Moscow’s 2022 federal budget.The conundrum for democracies has been how to stop Russian oil flows without driving crude prices so high that they crash the world economy — so, alternatives such as punitive tariffs or a price cap have been examined. Spare oil is scarce; Saudi Arabia and the United Arab Emirates are estimated to have enough capacity to replace nearly all the crude the EU buys from Russia, but it is not clear Opec and US shale producers are ready to increase output as fast as needed. Western capitals have been anxious too to ensure higher global prices and an ability to divert some exports elsewhere do not enable Russia to keep its oil income steady.An EU embargo phased in by the year end allows more time to engage in intensive diplomacy to secure alternative supplies and sort out logistics. Russia’s president, meanwhile, has instructed his ministers to draw up plans for new export infrastructure to serve “friendly markets”. Yet diverting supplies to new buyers will be harder for Moscow than many have assumed.Oil is much less reliant on pipeline deliveries than gas. But the west buys 70 per cent of Russia’s oil and oil product exports, and the great bulk of Moscow’s oil pipeline and maritime export routes point west. Moscow’s one oil pipeline to China — which buys only a fifth of its oil exports — is at full capacity. Redirecting oil by sea to big Asian importers such as China and India would require scores of supertankers making weeks-long journeys from Russian Baltic and Black Sea ports. Many shipping companies may shy away from handling cargoes for fear of being hit by sanctions — and rival suppliers will fight to preserve market share. The tricky geology of Russia’s oilfields also means it cannot turn off supplies as easily as, say, Saudi Arabia. If Russian wells are capped as there are no buyers, many may be difficult or unviable ever to reopen. Some analysts argue this gives western capitals considerable potential clout with a Russian leader facing the loss of oil export markets in months and lasting damage to an economic flagship. They could offer — in exchange for a ceasefire in Ukraine — to allow Russian exports to continue, but with customers paying into an escrow account from which Moscow can withdraw money only for essential purchases. Or a punitive tax on oil sales could be imposed, with proceeds going to rebuilding Ukraine. The idea of Russia’s leader ever conceding to such arrangements may seem fanciful; indeed, the more his forces struggle in Ukraine, the more Putin is escalating his threats, requiring careful calculation by western counterparts. But only weeks ago an oil embargo seemed unthinkable too. More

A record 4.5mn US workers quit the labour force in March, while the number of job openings hit a new high of 11.5mn, underscoring employers’ struggles to fill positions as inflation ripples through the economy. Government data released on Tuesday showed the “Great Resignation” was continuing to gain momentum as the US recovers from the coronavirus pandemic, giving workers additional leverage with businesses. The rising number of job openings and voluntary resignations have forced companies desperate for employees to raise wages and sweeten incentives to lure workers away from their old jobs — which, in turn, has encouraged even more employees to quit their current posts. The figures for both job openings and workers quitting were the highest since the US labour department began collecting the data in December 2000.“Despite job openings seemingly plateauing for the last few months, the new record high indicates demand for workers is clearly still red hot,” said Daniel Zhao, an economist at jobs site Glassdoor.The jobs picture continues to be coloured by Americans who have not re-entered the labour force because of lingering Covid-19 fears and difficulties finding childcare. In March, there were 1.9 jobs available for each unemployed worker, far above the pre-pandemic ratio of 1.2, in February 2020.Retailers drove the surge in job openings, posting some 155,000 new positions in March. Workers in low-wage sectors have been the biggest beneficiaries of the tight labour market, economists say, and have had the most opportunities to switch jobs. Business leaders have lobbied to loosen immigration restrictions to combat labour shortages after pandemic travel rules reduced arrivals of both highly skilled and blue-collar workers. Federal immigration officials on Tuesday announced an automatic 1.5-year extension to expiring or expired work permits for immigrant workers. The extension will go into effect on Wednesday. “Despite concerns about an imminent recession, employers are still looking to hire at near historic rates and are desperately holding on to the workers they have,” said Nick Bunker, an economist at jobs site Indeed. “The labour market is still very much a jobseeker’s market. Something dramatic will have to happen for this to change anytime soon.”The tight labour market, alongside surging petrol and food prices, have contributed to the highest US inflation in four decades. Businesses including Starbucks and Chipotle have attributed their own price increases to rising labour costs. The Federal Reserve is expected to continue its aggressive tightening of monetary policy in an effort to stem inflation. After delivering its first interest rate increase since 2018 in March, the Fed is expected to issue an aggressive half-percentage point rise at its meeting this week. On Friday, the labour department is scheduled to issue a monthly payrolls report. Economists surveyed by Reuters expect the data to show a US unemployment rate of 3.5 per cent, returning to levels reported before the onset of the pandemic in 2020. More

How should the EU manage the economic costs of Vladimir Putin’s war? That is not the same as minimising those costs. This is a war, one on which the future of Europe, perhaps of democracy itself, will depend. In such times, the aim of economic policy is to support the war effort. Policy should seek to maximise costs to the aggressor relative to those to the EU, particularly to its most vulnerable citizens. How should this be done?If we are to think about this question, we need an analytical framework. Olivier Blanchard, former chief economist of the IMF, and Jean Pisani-Ferry provide that in a recent paper. They list three challenges: first, “How best to use sanctions to deter Russia, while limiting adverse effects on the EU economy”; second, how to deal with cuts to real incomes that result from the rise in the cost of energy imports; and, third, how to manage the increased inflation caused by higher energy and food prices, which has come on top of the post-Covid surge in inflation. Needless to say, any such analysis is provisional. In times of war, the future is even more uncertain than usual. (See charts.)

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On the impact of sanctions on Russia, consider a recent comment by Rystad Energy: “Despite the severe oil production cuts expected in Russia this year, tax revenue will increase significantly to more than $180bn due to the spike in oil prices . . . This is 45 per cent and 181 per cent higher than in 2021 and 2020, respectively.” This is not to deny the damage done by sanctions: the IMF forecasts that Russia’s economy will shrink by 8.5 per cent this year. But it means that higher prices are more than offsetting reductions in volumes. Consumers are suffering, but they are also financing the invasion of Ukraine. This is bad policy.

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The aim must at the least be to lower the revenue Russia receives from its exports, not increase it. A number of economists have considered what this might require. Seven points emerge from their analyses. First, the EU’s vulnerability to Russia, but also power over it, is greater in gas than oil, because gas depends more on a fixed infrastructure. That makes diversification of sales by Russia (though also of purchases by the EU) more difficult. Second, the most effective way to lower revenue to Russia is not an embargo but a punitive tax or tariff, which should shift Putin’s “energy rent” to consumers. Third, imposing tariffs would generate revenue that can be used to help those suffering losses in real incomes at present. Fourth, a tax imposed by the EU alone on Russian exports would achieve more in gas than in oil, because of the greater difficulty of diversifying gas exports. Fifth, trade sanctions would be more effective the greater the number of participating countries. Sixth, one might extend sanctions on oil by placing sanctions on shipping. Finally, the cost of such measures to Russia would be a large multiple of their costs to the EU and allies.

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Reaching consensus on effective measures is hard, but crucial. A way has to be found to shift more of the revenue of Russian exports to consuming countries. Yet, whatever is done on that, there will be significant costs to wealthy importing countries from the war: increased spending on defence; greater spending on energy infrastructure; assistance to refugees; and, not least, substantial support for hard-hit developing countries.

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Inevitably, the salient political issue will be how to cushion the blow to domestic consumers. Should this be done via subsidies on energy, transfer payments or price controls? A big part of the answer depends on the sanctions regime that is adopted. But the general point is that subsidies will tend to offset sanctions by increasing consumption rather than reducing it. It would be better to increase transfers of purchasing power to vulnerable households, leaving them to decide how to spend it. Price controls on oil were a disaster in the 1970s. I can see no good reason why they would do any better now. If one wants to limit windfall profits, it would be better to tax them.How, also ask Blanchard and Pisani-Ferry, should transfers or other spending measures be financed? Since a war is a short-term emergency, the case for additional government borrowing is strong. Moreover, at current long-term interest rates (still very low) and prospective increases in nominal gross domestic product (boosted by inflation), extra debt would be affordable.

This then raises the issue of monetary policy. The impact of the war is to strengthen upward pricing pressures, risking an inflationary wage-price spiral, while simultaneously weakening demand as real incomes are squeezed. Blanchard and Pisani-Ferry suggest these two effects offset each other. In that case, they argue, monetary policy should remain on the tightening path laid out before the Russian invasion. But they also suggest fiscal measures might be targeted at lowering price inflation, so reducing the risks of the wage-price spiral. They also suggest that such fiscal measures could be brought into the wage-bargaining process directly. I am sceptical. Yet it just might work in northern Europe.The conclusion I draw from these analyses is that the war is a significant economic shock, but it is very much more a political and moral one. A brutal conflict has come to Europe of a kind not seen since the second world war, and even where some of its worst atrocities occurred. For Germany in particular, it is a moment of challenge and opportunity. The challenge is to defend Europe’s liberal civilisation. The opportunity is for historic redemption. Russia must not prevail. This is what matters most. There will indeed be pain. But it must be borne for a far greater [email protected] Martin Wolf with myFT and on Twitter More

Eurozone unemployment has hit a fresh record low after the bloc’s labour market weathered the initial fallout from Russia’s invasion of Ukraine, emboldening unions to intensify their push for higher wages.The jobless rate across the 19 countries that share Europe’s single currency was 6.8 per cent in March, Eurostat said, down from an upwardly revised 6.9 per cent in February. Economists had expected it to fall even further to 6.7 per cent, according to a poll by Reuters.The continued improvement of Europe’s labour market has prompted unions to step up demands for higher wages to offset soaring energy and food prices, which lifted eurozone inflation to an all-time high of 7.5 per cent in April, squeezing household disposable incomes.“Let’s be clear, workers are not the cause of inflation, they are its victims,” said Esther Lynch, deputy general secretary of the European Trade Union Confederation. “Pay is at the top of our affiliates’ agenda as inflation is at its highest level for decades and it’s clear that the cost of living is on an upward trajectory.” Pay has not kept pace with prices. In the fourth quarter of last year, eurozone wages rose at an annual rate of 1.4 per cent, well below inflation of 4.6 per cent in the period. That caused real hourly wages to fall 3 per cent, the largest drop since comparable data began 14 years ago. Wage growth in the eurozone has also not kept pace with rates seen in the US and UK. During the May Day marches by tens of thousands of workers across Europe on Sunday, union leaders stressed their determination to secure higher pay for workers to offset the higher cost of living. The CGT, the leftwing French union, called for the country’s minimum wage to rise to €2,000 per month, up from €1,645. The minimum wage has been raised three times in the past year, adding up to a total increase of 5.9 per cent, but CGT leader Philippe Martinez told Le Parisien that increasing it further was the best way to address France’s “social malaise”.IG Metall, Germany’s biggest union, said last week it was considering making a demand for an 8.2 per cent increase in annual wages for 85,000 workers in the iron and steel sector. The proposal by union officials in the north-west and east of Germany — covering most of the country’s steel industry — is likely to be agreed at a national level next week, kicking off negotiations with employers in the sector, which has been buffeted by surging energy prices.“Our members rightly expect a significant increase in monthly wages in the face of sharply rising prices and high profits of steel companies,” said Birgit Dietze, a district manager at IG Metall.Unemployment in Germany fell 13,000 to 2.31mn in March, which was slightly less than expected but still took its jobless rate to 2.9 per cent, the lowest rate since Eurostat records started in 1991. The country’s employment agency said job vacancies increased by 10,000 to 852,000.Stefan Schneider, an economist at Deutsche Bank, said Germany’s labour market was “red hot” and the steelworkers’ pay demands were “a reminder that the risk of a price wage spiral in Germany is real and not just the product of inflation angst ingrained in the German DNA”.

Tuur Elzinga, chair of FNV, the biggest Dutch union, said companies in the Netherlands had more than doubled their dividends this year, compared with 2019, but “many kept a tight rein on their own employees”. He added: “This imbalance needs to be tackled.”The proportion of companies reporting labour shortages rose to a new record of 27.8 per cent last month, according to a European Commission survey published last week. EU companies’ employment expectations dipped slightly, but Jack Allen-Reynolds, at Capital Economics, said they still pointed to a 1.5 per cent rise in eurozone employment this year.“While there is no sign of wage growth picking up yet, a tight labour market and sky-high inflation are fertile ground for pay,” said Allen-Reynolds. “Even so, real incomes are likely to drop this year and consumption growth will be weak.” More