Economy

“If we rush while the global condition is in disequilibrium, the rupiah could weaken and inflation goes out of control,” he told a media gathering. He said global economic fragmentation caused the disequilibrium.Bank Indonesia (BI) raised its key policy rate by 250 basis points from August 2022 to October 2023 to 6% to ensure rupiah stability and keep inflation under control.Warjiyo has repeatedly said Indonesia has room to loosen monetary policy, likely in the second half of this year, as global uncertainty has begun to ease and the Federal Reserve is also expected to trim U.S. interest rates by then.Meanwhile, inflation in Southeast Asia’s largest economy in January eased further to 2.57%, close to the midpoint of the central bank’s target range this year of 1.5% to 3.5%.The rupiah has recently been volatile amid developments in domestic politics ahead of Feb. 14 legislative and presidential election and changes in global sentiment for risky assets as investors predict the Fed’s next move.Monetary easing in Southeast Asia’s largest economy would help bolster growth while the economy is in an upward cycle of growth, the governor said, adding he expected to the cycle to peak in 2026.However, the magnitude and length of BI’s easing cycle would depend on how fast Indonesia’s economic growth turned out to be, particularly with an expected transition of power in the government, Warjiyo said. BI expects the economy to grow between 4.7% and 5.5% this year, compared with last year’s 4.5%-5.3% outlook. Asked whether BI would trim banks’ reserve requirement ratio (RRR) ahead of any rate cut, which it had done during some of its past easing cycles, Warjiyo said the current liquidity condition is already loose, signalling he preferred to keep RRR rates unchanged.BI has given some banks RRR rates of 5%, compared with industry rules of 9%, if the lenders provide financing to sectors that have big leverage on economic growth, such as the downstream industry of Indonesia’s resources.The central bank has said such incentives added 165 trillion rupiah ($10.5 billion) to banks’ liquidity as of the end of 2023.($1 = 15,655.0000 rupiah) More

Gary, Ind., was once a symbol of American innovation. The home of U.S. Steel’s largest mill, Gary churned out the product that built America’s bridges, tunnels and skyscrapers. The city reaped the rewards, with a prosperous downtown and vibrant neighborhoods.Gary’s smokestacks are still prominent along Lake Michigan’s sandy shore, starkly juxtaposed between the eroding dunes and Chicago’s towering silhouette to the northwest. But now they represent a city looking for a fresh start.More than 10,000 buildings sit abandoned, and the population of 180,000 in the 1960s has dropped by more than half. Poverty, crime and an ignoble moniker — “Scary Gary” — deter private investors and prospective homeowners.As U.S. Steel stands at a crossroads — a planned acquisition would put it under foreign control — so does the city that was named for the company’s founder and helped build its empire. A new mayor and planned revitalization projects have rekindled hope that Gary can forge an economic future beyond steel, the kind of renaissance that many industrial cities in the Midwest have managed.In theory, the potential is there. Gary sits in the country’s third-largest metropolitan area, astride major railroad crossings and next to a shipping port. A national park, Indiana Dunes, is a popular destination for park-loving tourists and curious drivers.“We have the recipe for success,” said Eddie Melton, the newly elected mayor. “We have to change the narrative and make it clear to the world that Gary is open to business.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

BUENOS AIRES (Reuters) -Argentina’s lower chamber of deputies gave overall approval to libertarian President Javier Milei’s sweeping “omnibus” reform bill in a vote on Friday after days of debate, paving the way for a decisive vote in the Senate.The controversial reform package was approved on a vote of 144 votes in favor, and 109 against.The reforms that make up the bill include the privatization of state entities, measures to enable reductions in generous state subsidies as well as the extension of some executive powers.Lower-house lawmakers will also vote on the legislation article by article, which is expected to begin on Feb. 6, but the general approval means it will now likely proceed to the upper house in some form.Over the past few days, flag-waving protesters opposed to Milei’s reforms have clashed repeatedly with riot police deployed outside the green-domed neoclassical congressional building, at times hurling rocks at them.”I came to see how they are selling our country,” said protester Liliana Lopez.The mammoth bill is a key plank of Milei’s reforms plans for Argentina’s embattled economy, which is grappling with inflation above 200%, depleted foreign currency reserves and a time-bomb of debt repayments owned to creditors and investors.Passing its initial hurdle in the lower house of Congress, the legislation marks the president’s first major test since taking office in December after a shock election win for the economist who made his name as an acid-tongued TV pundit and campaigned with a chainsaw pledging to slash the size of the state.The vote followed a long and heated debate in the lower chamber, with deputies for the main center-left Peronist opposition bloc, Union por la Patria, voicing fierce rejection of Milei’s policies while supporters urged them not to obstruct the bill.Milei’s La Libertad Avanza party only holds a small number of seats in the 257-seat chamber, but was still able to muster enough support from likeminded allies including from the main center-right Juntos por el Cambio coalition of parties to advance the bill.Last week, Milei’s government yanked some divisive spending reforms contained within the fiscal section from the bill in what turned out to be a successful maneuver to boost support for it. More

Black males who were at least 20 years old saw an unemployment rate of 5.3% in January, up from 4.6% in December.
By comparison, white men saw a jobless rate of just 3.3% in January, holding steady from December.
The average white worker age 16 or older had a median weekly pay that was nearly 20% higher than their Black counterparts, according to federal data as of the last quarter of 2023

A networking and hiring event for professionals of color in Minneapolis, Minnesota.
Michael Siluk | Getty Images

Black men lost ground in the workforce last month, marking a continuation of the disparities that have permeated the U.S. labor market.
Black males who were at least 20 years old saw an unemployment rate of 5.3% in January, up from 4.6% in December, according to seasonally adjusted data released Friday from the U.S. Department of Labor. These workers had the highest unemployment rate when breaking down Black, Hispanic and white workers by gender.

By comparison, white men saw a jobless rate of just 3.3% in January, holding steady from December. The overall unemployment rate was unchanged from December at 3.7%.
Meanwhile, the Black community as a whole was the only tracked racial group to see unemployment increase from December. This underscores the effect of job losses among Black men, especially considering the fact that the rate for Black women was unchanged between December and January at 4.8%.
Though the uptick in the unemployment rate for Black men is something to monitor, it can be more indicative of an anomaly in December’s low data, said Elise Gould, senior economist at the Economic Policy Institute. January’s 5.3% rate comes basically in line with the average 2023 month, while December’s 4.6% was the lowest level seen in the year.
The tight labor market experienced during the Covid-19 pandemic helped close the gap in work-related opportunities among Black and white men, she said. Indeed, the difference in unemployment rates between Black and white men shrunk to 2 percentage points in January from 4.1 percentage points in the same month in 2019.
Growth in the total number of employed Black men and the ratio of those with jobs to the total population compared with the start of 2023 also paints a picture of improvement, she added.

But Gould said the continued inequity in employment and pay highlights the need for further social progress, while bolstering the argument that a strong labor market alone won’t bring equality.
The average white worker age 16 or older had a median weekly pay that was nearly 20% higher than their Black counterparts, according to federal data as of the last quarter of 2023. That disparity grew to almost 25% when looking at male workers alone.
“A better economy absolutely can help historically disadvantaged groups more because they’re the ones that are often left out and are slow to recover in weaker times,” Gould said. “Full employment is definitely sort of a requirement for many historically marginalized groups to be able to see positive impact in the labor market, but it’s not the only thing.”
She pointed to unions as one example of a positive force for Black workers, noting that the wage transparency among members can help close any racial pay gaps.

‘A canary in the coal mine’

When combining genders, the unemployment rates of white and Asian workers ticked lower in January to levels last seen in late fall. The rate of unemployed Hispanics held steady from December at 5%, while the share of jobless Black workers inched higher to 5.3% from 5.2%.
Gould warned that month-to-month variations like what was seen in the unemployment rate of Black men can be fickle. Due to this, she said it’s important to evaluate longer-term trends before drawing conclusions.
Still, Gould said following employment patterns among Black workers and other marginalized groups can be important for spotting major economic trends. That’s true even when broader employment data like what was released on Friday signals a “hot” labor market, she added.
“It’s a canary in the coal mine,” she said. “When you’re thinking about where you’re going to see the signs of a recession, you’re not seeing it in the data today, but it’s always something to keep an eye on.”
— CNBC’s Gabriel Cortes contributed reporting.Don’t miss these stories from CNBC PRO: More

Optimism is still running high in markets, but a degree of caution means bonds may be gearing up for a strong month, even in a bumper earnings season for stocks.Here’s a look at the week ahead in world markets from Rae Wee in Singapore, Lewis Krauskopf in New York and Dhara Ranasinghe, Karin Strohecker and Amanda Cooper in London.1/TOPSY TURVYIf stocks outshone bonds in January, the reverse may be true for February.Dashed hopes of an early U.S. rate cut and a fresh slide in U.S. regional bank stocks — reviving memories of the March banking crisis — has suddenly cast a pall over stocks. Yes, world equity markets ended last month higher, but note the S&P 500 on Wednesday – and post-Fed meeting – closed with its steepest daily loss since Sept. 21.Government bond markets, where yields ended January mostly higher, have been boosted by the safety bid and growing signs that big economies – think U.S. ADP employment index, euro zone and China factory activity – are weakening. This should set the tone for the week ahead, with central-bank talk in focus. And the decoupling of bonds and stocks that began at the start of 2024 should continue. 2/THE DISINFLATION DRAGONChinese inflation data on Thursday will be the next test of the health of its economy, which is plagued by persistently weak demand, a beleaguered property sector and fragile investor sentiment.January’s producer and consumer price inflation figures are likely to underscore the country’s struggling recovery, though the bigger question will be whether deflationary pressures have intensified.Chinese markets have already had a brutal start to the year. The blue-chip index ended January down 6%, marking a record six-month losing streak.Beijing’s recent support measures seemed to have reassured investors for now and the expectation for further stimulus has driven the benchmark 10-year Chinese government bond yield to a two-decade low. As the Year of the Dragon looms, some are hoping the buzz of the annual travel rush might be a shot in the arm for animal spirits to come roaring – or creeping – back. 3/EARNINGS SPOTLIGHT Another big week of U.S. corporate results will help determine if the rally that has taken stocks to record highs can keep going. While most of the big tech head-liners have already reported for this period, the coming days still bring a huge batch of S&P 500 companies giving quarterly updates, including Eli Lilly (NYSE:LLY), Walt Disney (NYSE:DIS), ConocoPhillips (NYSE:COP) and PepsiCo (NASDAQ:PEP). S&P 500 companies are on pace to have increased fourth-quarter earnings by 6.1% year-on-year, according to LSEG data as of Jan 31. So far, 80% have reported earnings above expectations, compared with the 76% average beat rate of the past four quarters. Investors will be paying attention to any insight companies give about 2024, with earnings expected to grow faster than in 2023. 4/IDEAL HOMESThe UK has kept calm and avoided recession. Inflation is falling, wages are holding up and borrowing rates are starting to ease. Coming days bring data on how consumers are spending their money, with new car sales and mortgage rates, but also property prices and activity. If there is one thing the Brits love, it is their homes. Some of the biggest builders report earnings, including Barratt, Redrow and Bellway (LON:BWY). Last quarter, major builders issued fairly dire warnings about 2024. Yet there could be a glimmer of hope. A measure of home affordability fell late in 2023 to its lowest since 2015 in real terms, according to home loans provider Halifax. Bank of England January data showed British lenders approved the most mortgages since June, while mortgage rates fell for the first time in over three years.5/BIG VOTES, SMALL CHANGESThe 2024 election cycle cranks up a gear, with some of the world’s most populous nations heading to the polls. Pakistan’s general election is scheduled for Thursday amid a flare-up in violence. The country battles an economic crisis with inflation running at almost 30%, a weak currency and a government that will have to navigate a recovery under a $3 billion International Monetary Fund bailout that runs out in April. Ex-prime minister Nawaz Sharif is considered the front-runner with his main rival, former premier Imran Khan, jailed and barred from running. Voters in Indonesia, the world’s third-largest democracy heads to an election on Feb. 14, with front-runner Prabowo Subianto expected to clinch victory. Meanwhile, El Salvador’s President Nayib Bukele, who calls himself the “World’s Coolest Dictator”, looks set for a landslide win on Sunday, despite a constitutional bar on immediate re-election, voter worries about the economy, and criticism of his draconian crackdown on civil and human rights. More

ISTANBUL (Reuters) -Turkey’s central bank governor Hafize Gaye Erkan resigned on Friday, citing a need to protect her family amid a “reputation assassination”, and she was swiftly replaced by a deputy who is expected to carry on her tight policy stance.President Tayyip Erdogan – who hired Erkan eight months ago to pivot away from years of inflation-fuelling low interest rates to a more orthodox policy – named Deputy Governor Fatih Karahan to take the reins, the Official Gazette said early on Saturday, two hours after the surprise resignation.The personnel changes at the helm of Turkey’s economy came as Erkan’s aggressive interest rate hikes had begun cooling inflation expectations after a years-long cost-of-living crisis for Turks. The first woman to lead the central bank, Erkan was its fifth governor in as many years. Erdogan fired the last four, eroding the institution’s independence and sowing concerns about dysfunction. But late on Friday, cabinet leaders quickly said that the economic programme will carry on after Erkan’s departure.Karahan, a former Federal Reserve Bank of New York economist, was appointed deputy in July and is seen as a capable successor who played a big role in engineering the monetary tightening. Erkan, a former U.S. bank executive, began raising rates when she was appointed in June, launching a 180-degree pivot away from years of low rates under Erdogan that had sent inflation soaring and foreign investors fleeing. Since then the central bank had hiked its key rate to 45% from 8.5%. Last week, after another 250 basis-point rise, it said it had tightened enough to achieve disinflation, signalling a halt.Erkan said that “our economic programme has started to bear fruit”, citing rising foreign reserves and expectations that inflation will begin cooling around mid-year “as proof of this success”.”Despite all these positive developments, as is known to the public, a major reputation assassination campaign has recently been organised against me,” she added on social media platform X.”In order to prevent my family and my innocent child, who is not even one and a half years old, from being further affected by this, I have asked our President to pardon me from my duty.” Last month, opposition newspaper Sozcu published an article about a central bank employee who said she was wrongfully dismissed from the bank by Erkan’s father. In response at the time, Erkan said that an “unfounded” news story targeting her, her family and the bank was “unacceptable” and vowed to exercise her legal rights against those responsible. Erdogan later decried efforts to spread “rumours” meant to undermine economic progress, in an apparent endorsement of Erkan.CONFIDENCE Finance Minister Mehmet Simsek said Erkan’s resignation was her personal decision and the economic programme will carry on uninterrupted. Just hours before Karahan’s appointment was announced, Simsek said the new governor would be “a well respected macroeconomist with an extraordinary depth of knowledge and expertise,” and was appointed in line with his recommendation. Karahan has a doctorate in economics from the University of Pennsylvania and was a principal economist at Amazon (NASDAQ:AMZN) in 2022. The Official Gazette notice naming him also said Erdogan “dismissed” Erkan. Simsek said Erdogan continues to back the economic team and programme, a sentiment echoed in a separate statement by Turkish Vice President Cevdet Yilmaz. Inflation neared 65% last month and is expected to begin dipping around June, spelling some relief for Turks after years in which rent and other basic needs became unaffordable for many. Foreign investors, including world heavyweights Pimco and Vanguard, began buying Turkish assets late last year in a strong signal of confidence in Erkan and Simsek’s programme. Erkan’s resignation “may have been due to personal reasons but it will make investors a little sceptical until they see proof that the policies they have been pursuing remain,” said Jeff Grills, head of emerging market debt at Aegon (NYSE:AEG) Asset Management, referring to nagging worries that Erdogan could again return to rate cuts.But Serkan Gonencler, chief economist at financial firm Gedik Yatirim, said the assurances from cabinet leaders “relieve concerns about the continuity of the economic program”. Since 2018, Erdogan had overseen a policy of slashing interest rates in the face of soaring inflation, setting off a series of currency crises and prompting authorities to tighten their grip on foreign exchange, debt and credit markets. But after his re-election in May, Erdogan named a new cabinet and Erkan as central bank chief and backed the pivot to orthodoxy. More

Karahan’s appointment came hours after central bank governor Hafize Gaye Erkan announced her resignation on Friday night on X, citing in part a need to protect her family amid a “reputation assassination”.Fatih Karahan, 42, has a University of Pennsylvania economics PhD and worked as an economist at the Federal Reserve Bank of New York for almost a decade, according to his biography on the central bank website.Karahan also taught as an adjunct professor at Columbia University and New York University and worked for Amazon (NASDAQ:AMZN) as a principal economist in 2022.Erdogan had appointed Karahan as one of the three new deputy governors to the central bank in July last year. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The US economy added 353,000 jobs in January, almost twice as many as forecast, in “stunning” figures that led investors to slash expectations for interest rate cut in March.Economists had expected a 180,000 jobs increase for last month, according to an LSEG survey.Tom Simons, US economist at Jefferies, described the figures as “stunning numbers” that left him “near speechless”.Analysts said the figures gave greater weight to the US Federal Reserve’s insistence that it may be too soon to cut interest rates, despite attacks on Fed chair Jay Powell by Republican presidential frontrunner Donald Trump.After the data’s publication, futures traders scaled back bets that the Fed would cut interest rates in March. Expectations of a cut fell to about 20 per cent, compared with 37 per cent before the report. “Barring some kind of exogenous shock, this removes the possibility of a rate cut in March,” said Simons of the labour data. “A cut in March would be unthinkable.”Traders also reduced their bets on interest rate cut in May, putting the odds at around 88 per cent. Before the report, a cut in May had been fully priced in.Stephen Stanley, chief US economist at Santander, said that although January’s 353,000 jobs figure was “exaggerated by seasonality”, the data was “strong across the board”. Treasury yields jumped as the markets backtracked on their expectations of early rate cuts. The two-year Treasury yield, which moves with interest rate expectations, was up 0.18 percentage points to 4.37 per cent. Powell sought earlier in the week to cool speculation about a March rate cut, warning that it was not the central bank’s “base case”.“Powell killed a March cut. The jobs number buried it,” said Robert Tipp, chief investment strategist at PGIM Fixed Income.Late on Friday afternoon, Michelle Bowman, a governor at the Fed, confirmed that the hot US labour market was now one of the main “upside” risks to officials’ hopes that inflation would soon hit their 2 per cent goal. The tightness in the jobs market “could lead to persistently high core services inflation”, Bowman said, adding that “some businesses continue to report above-average wage increases to compensate for inflation”.Highlighting the politically charged choice facing the US central bank, Trumpaccused Powell on Friday of seeking to lower rates to boost President Joe Biden’s electoral chances.“I think he’s going to do something to probably help the Democrats,” the Republican frontrunner told an interviewer, adding he would not reappoint the Fed chair.The S&P 500 gained 1.1 per cent on Friday to a record high as a surge in tech stocks helped the market shrug off the change in interest rate expectations.Meta shares climbed 20.3 per cent higher after the tech giant’s fourth-quarter sales and outlook exceeded forecasts, alongside the surprise introduction of its first quarterly dividend. Amazon rose 7.9 per cent.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Friday’s jobs report by the Bureau of Labor Statistics also showed that US workers’ average hourly wages grew 0.6 per cent to $34.55 — up 4.5 per cent over the past 12 months.Revised figures in the report indicated that the US had added 333,000 jobs in December, up from a first estimate of 216,000. The figure for November was also upgraded, by a more moderate 9,000 to 182,000. Some economists suggested that the dramatic gains in January’s jobs figures — a phenomenon that also occurred last year — may have been exaggerated by seasonal hiring. The seasonal adjustment methodology “has not caught up with the patterns in the real economy”, said Eric Winograd, senior economist for fixed income at AllianceBernstein.Until now, the Fed had been encouraged by signs that the labour market was cooling down. Referring to this week’s Employment Cost Index figures, which indicated wage rises were moderating, Powell said on Wednesday that the US was “still a good labour market for wages and for finding a job, but [was] getting back into balance and that’s what we want to see”. More