Economy

ADP reported that companies added 113,000 workers for the month, higher than the 89,000 in September but below the estimate of 130,000.
Education and health services led with 45,000 new jobs. Other notable gainers included trade, transportation and utilities, financial activities, and leisure and hospitality.

Private sector payroll growth increased modestly in October but missed expectations, in a potential sign that the employment picture could be darkening, ADP reported Wednesday.
The payrolls processing firm said that companies added 113,000 workers for the month, higher than the unrevised 89,000 in September but below the Dow Jones consensus estimate of 130,000.

On wages, ADP said pay was up 5.7% from a year ago, the smallest annual gain since October 2021.
From a sector standpoint, education and health services led with 45,000 new jobs. Other notable gainers included trade, transportation and utilities (35,000), financial activities (21,000), and leisure and hospitality (17,000).
Almost all of the jobs came from services-providing industries, with goods producers contributing just 6,000 toward the total.
Firms employing between 50 and 499 workers contributed the most, with a gain of 78,000.
“No single industry dominated hiring this month, and big post-pandemic pay increases seem to be behindus,” said ADP’s chief economist, Nela Richardson. “In all, October’s numbers paint a well-rounded jobs picture. And while the labor market has slowed, it’s still enough to support strong consumer spending.”
The release comes two days ahead of the Labor Department’s official nonfarm payrolls report, which is expected to show an increase of 170,000 and includes government jobs, unlike ADP. The counts from ADP and the government can differ substantially, as they did in September when the Labor Department reported a gain of 336,000, more than three times the ADP estimate. More

BERN (Reuters) – Swiss National Bank (SNB) Chairman Thomas Jordan on Wednesday defended the central bank’s handling of the Credit Suisse crisis including handing out emergency cash to the stricken lender contrary to its normal rules.The SNB bought time for a solution by providing massive liquidity for Credit Suisse before UBS bought the bank in March, Jordan told an event in Bern.The acquisition of the fallen 167-year-old lender prevented a global financial crisis, he said.”The SNB’s willingness and ability to provide liquidity was crucial in managing the acute crisis at Credit Suisse and thus in avoiding a financial crisis with serious economic consequences for Switzerland and the rest of the world,” Jordan said.The SNB provided 168 billion Swiss francs ($185 billion) in emergency liquidity after Credit Suisse suffered massive outflows as rattled customers withdrew their funds in March.”Never before had a central bank provided such a large amount of liquidity to a single bank,” Jordan told the SNB and its Watchers event.Some of the cash was provided via an emergency scheme called ELA+, or emergency liquidity assistance.The money was secured only via preferential rights in bankruptcy proceedings and not against collateral like mortgages which is usually demanded by the SNB.”Without ELA+ Credit Suisse would have been in jeopardy of being unable to meet its financial obligations … entailing substantial risks for financial stability,” Jordan said.But while the SNB played a key role in resolving the situation, there were limits to what the central bank could do and important lessons to be learned, he said.Liquidity regulations must be adapted in the light of faster and larger outflow of customer deposits, Jordan said.It was also crucial for banks to prepare sufficient collateral to transfer to central banks to obtain emergency liquidity in a crisis.There also needed to be an effective public liquidity backstop to enable the SNB to provide liquidity to lenders that do not have sufficient collateral and which was covered by a state guarantee.”ELA+ should not become part of the SNB’s regular set of instruments,” Jordan said.($1 = 0.9098 Swiss francs) More

Despite the slowing deceleration of inflation and solid economic growth, Powell and other Fed officials, including Christopher Waller, a member of the Fed’s governing board, are not ruling out a potential final rate hike. Michael Arone of State Street (NYSE:STT) Global Advisors highlighted the importance of the Fed’s stringent stance on inflation.Since March 2022, the Fed has raised its key rate from near zero to approximately 5.4% in response to four-decade high inflation in 2022. This action has affected mortgages, auto loans, and credit card debts. Consequently, the average 30-year fixed mortgage rate has climbed to nearly 8%. Despite these measures, annual inflation has dropped from a peak of 9.1% to 3.7%.U.S. economic growth experienced a boost in the July-September quarter due to strong consumer spending and increased hiring rates. However, volatile financial markets have resulted in higher long-term rates on U.S. Treasurys, lower stock prices, and increased corporate borrowing costs.Wall Street economists suggest that these market trends may lead to an economic slowdown and ease inflation pressures without additional rate hikes. The yield on the 10-year Treasury note has reached 5%, a level unseen in 16 years, due to a surge in Treasury yields. This surge is driven by factors such as the government’s anticipated sale of potentially trillions more dollars in bonds in the coming years to finance large and persistent budget deficits while the Fed reduces its bond holdings.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The situation is further complicated by the impending decision on interest rates by the U.S. Federal Reserve. This move could significantly sway global markets and add to the existing economic uncertainty. As investors worldwide navigate these concurrent events with caution, global shares have seen a slight increase.The Israeli military’s north and eastward push towards Gaza City has been marked by fierce battles with Hamas militants and the targeting of besieged apartments. These developments are contributing to the volatility in the oil market and driving up prices.Investors worldwide are cautiously observing these unfolding geopolitical tensions. The potential impact on the global economy of these concurrent events – the escalating conflict and pending interest rate decision – is inducing a sense of caution among market participants.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

“I will almost certainly be calling on many of you in the audience who are in academia and industry to be part of this consortium,” she said in a speech to the AI Safety Summit in Britain. “We can’t do it alone, the private sector must step up.” Raimondo added that she would also commit for the U.S. institute to establish a formal partnership with the United Kingdom Safety Institute. “We have to get to work together,” she said. More

A major constraint on South Africa’s economic growth potential in the last decade has been rolling power cuts as utility Eskom struggles with breakdowns at its coal-fired power plants. Underperformance at state-owned logistics company Transnet has also weighed on growth.This, coupled with a significant drop in mining revenue as commodity prices fall, has resulted in lower tax receipts. Revenue collections in the current 2023/24 fiscal year were projected to be 56.8 billion rand ($3.04 billion) below estimates in the main February budget, the treasury said.The treasury said it remained committed to stabilise public finances. This will be achieved through spending reductions, moderate tax revenue measures and efficiency measures across the government – including the reconfiguration of government that would involve the merging or closure of public entities.”Given the extent of fiscal consolidation required, the Minister of Finance will propose tax measures to raise additional revenue of 15 billion rand in 2024/25 in the 2024 budget,” the treasury said.The treasury did not elaborate on the specific measures, but Finance Minister Enoch Godongwana said in his budget speech that “our most effective way of funding government is through an efficient tax administration and by broadening the tax base”.South Africa’s 2023 economic growth is forecast at 0.8% from 0.9% seen in February. The economy grew by 1.9% in 2022.A consolidated budget deficit of 4.9% of gross domestic product (GDP) is expected in 2023/24, wider than a 4.0% deficit seen in February. Next year the treasury predicts a deficit of 4.6% of GDP and the following year 4.2% of GDP, wider than the 3.8% and 3.2% seen in February.South Africa’s gross debt is expected to rise to 6.52 trillion rand in 2026/27 from 5.24 trillion rand in 2023/24. As a percent of GDP, gross debt is seen stabilising at 77.7% of GDP in 2025/26 compared with 73.6% of GDP in the same year seen in February.($1 = 18.7143 rand) More

This article is an on-site version of our Moral Money newsletter. Sign up here to get the newsletter sent straight to your inbox.Visit our Moral Money hub for all the latest ESG news, opinion and analysis from around the FT I’m midway through investigative journalist Eyal Press’s excellent book Dirty Work, which examines the often appalling conditions faced by people doing society’s toughest, most thankless tasks, such as slaughterhouse workers.“How we think about this work,” Press writes, “reveals something fundamental about our society — our values, the social order we unconsciously mandate, and what we are willing to have done in our name.”This warning was on my mind as I reported the story below. Delivering meals for DoorDash might sound a lot less brutal than slaughtering cattle. And the rise of the “gig economy” has brought unprecedented levels of convenience for better-off consumers. But it is reshaping the labour market in ways that create a precarious existence for large numbers of low-paid workers. Labour law needs to evolve in response.Our next Moral Money Forum deep-dive report will explore how business and finance are approaching biodiversity risk. We want to hear from our readers. Please share your thoughts through this brief survey.The ‘working poor’ employed by big US companiesDuring my recent trip to New York, I had lunch with Olivier de Schutter, the Belgian legal scholar serving as the UN special rapporteur on extreme poverty and human rights.De Schutter had just delivered a speech at the UN headquarters in which he warned of the dire situation facing the world’s “working poor”, who are below the poverty line despite being employed.Their ranks include millions of struggling workers in developing nations, he noted — but also people working for some of the biggest and most profitable companies in the US.In letters made public this week, de Schutter wrote to ecommerce giant Amazon, retailer Walmart and food delivery service DoorDash, highlighting allegations about inadequate treatment of workers, especially those without permanent contracts, including “gig workers”. He also wrote to the US government to highlight the allegations, as well as wider concerns about the situation of low-paid workers in the country.Amazon has said its workers can choose between ‘a multitude of jobs and shifts’ More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Virgin Media O2 has cut its annual revenue guidance as consumers pull back on spending on new mobile phones and broadband packages amid a cost of living crunch.The UK telecoms group said on Wednesday it expected revenue, adjusted in relation to its 2021 merger and excluding any impact from its fibre-building activities, to be “stable” instead of in a “growth” phase. Virgin Media O2 maintained its outlook for “mid-single digit growth” for earnings before interest, taxes, depreciation and amortisation, also adjusted for the merger and excluding any fibre impact. The company, jointly owned by Liberty Global and Spain’s Telefónica, said adjusted revenue rose 1 per cent to £2.8bn for the three months to September 30, in comparison with the same period last year.Chief executive Lutz Schüler said the most recent quarter had been “a tough environment to navigate” and added that “some consumers tighten[ed] spend, notably across mid-tier TV, home phone and on low-margin handsets”.The group said customers were holding on to mobile devices for longer and that its fixed-line services, which include broadband, TV and home phones, were also affected by changes in household spending. Mobile revenue edged up 1 per cent to £1.5bn, although growth in service revenues supported by price rises was partially offset by a 5 per cent reduction in handset revenues. Tighter household spending offset price increases of almost 14 per cent in its consumer fixed division, where revenue declined 1.5 per cent to £839mn.Virgin Media O2 gained an additional 32,500 net fixed-services customers in the period while its number of contract mobile subscribers increased by a net 50,000.Overall, Virgin Media O2’s third-quarter adjusted earnings before interest, taxes, depreciation and amortisation rose 6 per cent to £1.05bn.Nexfibre is a joint venture owned by Liberty Global, Telefónica and InfraVia Capital Partners through which Virgin Media is building a full-fibre network. More than 250,000 additional premises were passed with fibre in the third quarter and the group expects about 175,000 premises to transfer to the Nexfibre network within the next year as a result of its deal to acquire Upp, a so-called altnet it bought in September. Its owner, the Russian oligarch-backed investment company LetterOne, had been forced to sell the company on national security grounds.Virgin Media O2 also announced it had sold a minority stake in the UK’s largest mobile tower network to a partnership of UK pension funds for about £360mn.The 16.67 per cent stake in Cornerstone Telecommunications Infrastructure, a national network of about 20,000 sites used by both Virgin Media O2 and Vodafone UK, will be acquired by London-based GLIL Infrastructure. Virgin Media O2 will retain ownership of a third of Cornerstone. More