Economy

COLOMBO (Reuters) -Streets in Sri Lanka’s commercial capital Colombo were calm on Saturday after the president declared a state of emergency following escalating anti-government protests.Details of the latest emergency regulations were not yet made public, but previous emergency laws have given greater powers to the president to deploy the military, detain people without charge and break up protests. [L2N2WY1RR]”The President has taken this decision due to the public emergency situation in Sri Lanka and in the interests of public security, the protection of public order and the maintenance of supplies and services essential to the life of the community,” a statement released by his office said. There were no initial reports of late-night disturbances following the emergency declaration shortly before midnight, while traffic proceeded as normal in Galle Face, a central area of Colombo that has been a major site of protests and marches. At the main protest site in the city outside the Presidential Secretariat, around 100 people gathered to listen to anti-government speeches despite the state of emergency, while passing cars sounded their horns in support. “This emergency will not stop the protests,” said Waheeda Lafir, a teacher delivering food supplies to the village of tents that has stood at the site for almost a month. “The government has brought this on themselves, they should resign.”The announcement – the second time President Gotabaya Rajapaksa has declared emergency law in little over a month – drew condemnation from Sri Lanka’s opposition and several western countries. “Concerned by another state of emergency,” United States ambassador to Sri Lanka Julie Chung said in a tweet.”The voices of peaceful citizens need to be heard.”On Friday police fired tear gas at dozens of demonstrators outside parliament, in the latest in more than a month of sporadically violent anti-government protests amid shortages of imported food, fuel and medicines.Aid agency UNICEF said it was concerned that children had been among those affected by the tear gas.”Every adult must act with a sense of responsibility and avoid exposing children to any form of violence, including during protests,” it said in a statement. Hit hard by the COVID-19 pandemic, rising oil prices and government tax cuts, Sri Lanka has been left with as little as $50 million in useable foreign reserves, the finance minister said this week.The country has approached the International Monetary Fund for a bailout.The IMF will meet with Sri Lankan officials in a virtual meeting beginning on Monday, a statement from Masahiro Nozaki, the IMF’s mission chief for Sri Lanka, said on Saturday. More

HAMILTON, Ohio (Reuters) – President Joe Biden boasted on Friday of a U.S. manufacturing surge and introduced a new small business program in the key swing state of Ohio during his sixth visit there as presidentBiden was buoyed by strong numbers earlier in the day that showed the U.S. added 428,000 jobs in April https://www.reuters.com/world/us/us-job-growth-solid-april-unemployment-rate-steady-36-2022-05-06, more than expected and the 12th straight month of job gains in excess of 400,000. Manufacturing has seen the largest 15-month job gain in 15 years, he noted.”These manufacturing jobs matter because they fuel our economic growth. They fuel exports. And, as we’ve seen, they can fuel innovation,” Biden, a Democrat, said after touring United Performance Metals, a metal manufacturer near Cincinnati. The president announced an initiative to encourage large companies to adopt an emerging technology known as additive manufacturing.Driven by 3D printing, the technology allows complex shapes to be built up in layers from particles of plastics or metal. It is viewed by the administration as a sort of innovation that will enable U.S. manufacturers to flourish and create jobs.The initiative, dubbed AM Forward, is a voluntary program. Companies sign a public commitment to increase use of the technology and also rely on small- to medium-sized U.S.-based supply companies. GE Aviation, Siemens Energy, Raytheon Technologies (NYSE:RTX) and Lockheed Martin (NYSE:LMT) are the initial participants, the official said. Biden used the visit to call on Congress to pass the Bipartisan Innovation Act, which aims to boost manufacturing in the United States, particularly the production of semiconductor chips.No longer a ‘Rust Belt,’ American manufacturing areas are home to smaller companies building chips and other critical components that can help keep prices down, Biden said, which could boost U.S. competitiveness with China.While Americans are worried about rising prices, more manufacturing facilities across the United States will help, Biden said.”It matters a great deal, because the pandemic and the economic crisis that we inherited and Putin’s war in Ukraine have all shown the vulnerability when we become too reliant on things made overseas,” he said.Biden gave a shout out to labor unions that organize workers in many of the companies involved in the new initiative, calling them “the single best workers in the world.”Biden is facing headwinds as he tries to help his fellow Democrats stave off a Republican takeover of Congress in the Nov. 8 midterm elections. Inflation is at a 40-year high and gasoline prices are soaring, weighing down Biden’s job approval ratings, and Republicans frequently attack Biden’s handling of the economy.Former President Donald Trump took Ohio in 2016 and 2020 in part because of his appeal to Rust Belt voters tired of seeing jobs disappear.The trip was Biden’s sixth to Ohio since taking office in January 2021.In recent days, he has made more overt political remarks as he girds for the five months of political campaigning. On Wednesday he sharply criticized Trump’s devoted followers, referring to them by the MAGA acronym for Trump’s Make America Great Again slogan. In primaries this week Trump-backed Republican J.D. Vance won the nomination for a U.S. Senate seat while Democratic incumbent Representative Shontel Brown handily defeated progressive candidate Nina Turner in the U.S. congressional district which includes Cleveland. (This story corrects paragraph 7 to add Raytheon (NYSE:RTN)) More

Brieana LaCaze had 30 days to hire a dozen employees after she bought a women’s clothing boutique in the Galleria Dallas mall last month. She found only six. “We hit a bump in the road,” the Texas businesswoman said. “Operations work now falls on me.” Her predicament is common one for American store owners. As the unemployment rate drops back to extreme lows, no sector has struggled more than retailers to fill jobs. Retailers posted 155,000 new positions in March, bringing their total number of openings to 1.3mn, according to data released on Tuesday. Yet in April, retailers filled only 29,200 jobs, Friday’s US payrolls report showed, out of a total 428,000 added in the month. Retailers’ labour troubles are one factor behind rising prices in the checkout line, which along with food, energy, housing and other essentials have helped push US inflation up 8.5 per cent annually, the fastest rate of increase in 40 years. The sector experienced sharp sales growth in 2021 as the economy rebounded from the coronavirus pandemic, and retailers expect demand to remain elevated in 2022. Business owners including LaCaze say that a tight labour market is making it increasingly difficult to keep up. Wages in retail trade rose by 4.9 per cent year on year in April, the payrolls report said, less than the 5.5 per cent jump for average the US private sector worker. Retail workers on average earned about $684 a week, compared to a private sector average of more than $1,100. Fears that a hot labour market, and the higher wages that come with it, will exacerbate the acute inflation problem has the Federal Reserve poised to rapidly tighten monetary policy in the coming months. The concern is a potential “wage-price spiral” in which workers demand higher pay in order to keep up with higher consumer prices.“We can’t allow a wage-price spiral to happen, and we can’t allow inflation expectations to become unanchored,” Fed chair Jay Powell said on Wednesday, though noted that this dynamic has not taken hold so far.“It’s a good time to be a worker looking to either change jobs or get a wage increase in your current job,” he added after the central bank raised interest rates by half a percentage point and signalled more such moves to come this year. According to estimates, there were roughly 1.9 job openings for every unemployed person as of March. Walmart raised hourly pay twice in 2021, bringing the average wage for its 1.4mn workers to $16.40 an hour. Target has raised wages even higher and in March said it would spend $300mn to boost pay and benefits for its 409,000 employees, with starting wages at between $15 and $24 an hour based on location.Employers have also embraced creative ways to draw in new employees. Home Depot announced that it would start making job offers the day after interviews. Walmart, Target and Amazon have all introduced tuition benefits for hourly employees.Russ Reynolds, chief executive of car wash operator Spotless Brands, offers bonuses to employees to persuade their relatives to join the company. Reynolds wants to open 75 new locations across the country by the end of the year. But without more staff, not all of those locations are the chain’s typical full-service washes. Some more closely resemble express car washes, where customers pull up to a gate and use an automated machine to select a service with minimal help from workers.“It helps us adapt in a market where we aren’t able to find people,” Reynolds said.LaCaze, the Dallas boutique owner, cut the interview for new roles at her boutiques to just three questions and structured a training program that will allow her to get new employees, called “stylists”, on the sales floor in less than a week. Hiring incentives have lured many employees away from their old jobs, helping to push the number of those who voluntarily quit to a record-high 4.5mn in March. Stores have also become recruiting grounds for businesses in other, sometimes higher-paying industries, said Mark Mathews, a vice-president at the National Retail Federation.Retailers now receive fewer applications for each role they post, according to talent acquisition firm iCIMS, which has worked with Chipotle, Dollar General and Foot Locker. Employers received an average of 17.8 applicants for each opening in March, down 19 per cent from the 22 they received in January 2021.“From a worker’s point of view, this is something to celebrate,” says Nick Bunker, an economist for jobs site Indeed, who said that workers in retail, restaurants and other traditionally low-wage industries have benefited the most from the strong labour market. Retailers answered surging demand during the pandemic in part by expanding in ecommerce. There are now signs that growth is levelling off: Amazon, the online retail giant, said last month that its aggressive push to expand had left it overstaffed and with surplus capacity.Reynolds said that business owners like him were not expecting hiring to get easier anytime soon.“Our jobs have a lack of flexibility in some ways,” he said. “You cannot wash cars through a Zoom call. So we have to make up for it in other ways.” More

“I think it would be appropriate to take at least two or even three steps. These could be smaller ones, i.e. 0.25 percentage points each. If this were to happen by December, it would have the effect that by 2023 the deposit rates for banks, which are now minus 0.5 percent, would be in positive territory,” the Austrian central bank governor was quoted as saying. “You’ll still be quite a bit away from the natural nominal interest rate. So there is still a long way to go. But it would be a good signal to the public.”ECB policymakers are becoming more vocal about normalising monetary policy more quickly than previously expected, with more publicly backing a July rate hike.Asked if the ECB was too late to act, Holzmann said: “I would not say too late. But perhaps action could have been taken earlier. The U.S. is about half a year earlier in the economic cycle. In this respect, it is fitting that the ECB is acting later. Perhaps the Fed was also a little late.”Asked about the U.S. Federal Reserve’s move to raise rates by half a percentage point, which supported the dollar against the euro and could fuel imported inflation, Holzmann said: “The ECB does not pursue an exchange rate target. But we are watching it closely and taking it into account in our decisions. We will probably not be able to compensate for the difference we have now by raising interest rates, but at least the gap will in all likelihood not increase significantly.”He also played down the danger of a wage-price spiral in which demands for higher salaries lock in inflation. “We are looking closely at wage settlements. And that does not worry us for the time being. But the danger is always there in principle. If it came to that, we would have to raise interest rates more strongly to avoid possible second-round effects. That could affect the real economy, but at the moment that is not yet the case.” More

The Washington-based fund warned in February that Somalia’s delayed legislative and presidential elections put the renewal of the three-year budget support programme, worth nearly $400 million, at risk of automatic expiration this month.The presidential election, which is carried out by lawmakers, is now set for May 15. The government has written to the IMF’s board asking for more time to conclude talks on the budget support programme’s renewal, said Laura Jaramillo, IMF’s mission head. “The extension is expected to provide the time needed to confirm policy understandings with the new government after presidential elections are completed,” she said.She did not comment on whether the automatic expiration of the programme will be extended. Officials at Somalia’s ministry of finance and the central bank were not immediately available for comments.The conclusion of negotiations for renewal of the programme is also a required part of a deal to slash Somalia’s debt from more than $5 billion to around a 10th of that. More

(Reuters) -Two of the Federal Reserve’s most outspoken policy hawks on Friday pushed back on the view that the U.S. central bank missed the boat on the fight against high inflation, citing a tightening of financial conditions that began well before the Fed began raising interest rates in March.”How far behind the curve could we have possibly been in terms of time if, using forward guidance, one views rate hikes effectively beginning in September 2021?” Fed Governor Christopher Waller said, noting that yields on the two-year Treasury note rose last fall as the Fed began to signal the end of its super-easy policy. The move reflected the equivalent of two Fed rate hikes through December, he said. Speaking at the same Stanford University conference, titled “How monetary policy got behind the curve,” St. Louis Fed President James Bullard argued that the Fed is “not as far behind the curve as you might have thought.” Earlier this week the Fed raised its policy rate to a range of 0.75% to 1%. Critics say that is far too low to fight inflation running at three times the Fed’s 2% target. Bullard said he agrees, calling inflation “far too high,” and call for rates to rise “expeditiously,” to perhaps 3.6%, to bring inflation under control. But he noted that markets are already pricing much of that increase in. Traders of rate futures are currently pricing in a Fed funds rate of 3% to 3.25% by year end. “It’s going in the right direction … hopefully we’ll be able to get away from this behind-the-curve characterization soon,” Bullard said. The two were among the first Fed policy makers last year to call for a rapid removal of easy monetary policy and a quicker start to raising interest rates. Bullard, in fact, dissented on the Fed’s March quarter-point rate hike as too little. But both joined their colleagues in approving the half-point rate hike delivered this week. Fed Chair Jerome Powell, speaking after the rate decision was announced, signaled further increases ahead, including half-point rate hikes in both June and July.Waller used his talk Friday to trace how economic data first seemed to ratify, then challenge, his own view from last spring: that inflation would prove transitory as supply chains healed and one-time fiscal stimulus faded, and that the labor market was primed to roar back as COVID-19 receded. Most of his colleagues shared in the first view; opinions were more divided on the second. In the end, Waller said, inflation proved to be much higher and more persistent than he had thought. At the same time he described the “punch in the gut” he felt as two weaker-than-expected monthly jobs reports in August and September seemed to undercut the thesis of labor market healing. As it turned out, later data revisions showed the U.S. labor market had been stronger than the real-time data suggested. “If we knew then what we know now, I believe the (Fed) would have accelerated tapering and raised rates sooner,” Waller said. “But no one knew, and that’s the nature of making monetary policy in real time.”By early November, most policymakers had come around to the view that high and rising inflation would not drop quickly enough on its own, and business demand for workers was far outpacing a slow-to-recover labor market supply.”It was at this point … that the FOMC pivoted,” Waller said. The Federal Open Market Committee, known as the FOMC, is the Fed’s policy-setting body.The conference featured several former Fed policymakers and economists who argued that the Fed had fallen so far behind the curve that it would almost surely end up causing a recession as it sought to catch up by raising rates faster.Former Fed Vice Chair of Supervision Randal Quarles, who says he was the Fed’s most hawkish member until Waller joined late last year, told the conference that in hindsight it’s clear “it would have been better to start raising rates last September.”It wasn’t a failure of nerve, or politics, or stupidity, he said Friday. “It was a complicated situation with little precedent, and people make mistakes.” More

In a sign that federal labor officials are closely scrutinizing management behavior during union campaigns, the National Labor Relations Board said Friday that it had found merit in accusations that Amazon and Starbucks had violated labor law.At Amazon, the labor board found merit to charges that the company had required workers to attend anti-union meetings at a vast Staten Island warehouse where the Amazon Labor Union won a stunning election victory last month. The determination was communicated to the union Friday by an attorney for the labor board’s regional office in Brooklyn, according to Seth Goldstein, a lawyer representing the union.Such meetings, often known as “captive audience” meetings, are legal under current labor board precedent. But last month, the board’s general counsel, Jennifer Abruzzo, issued a memo saying that the precedent was at odds with the underlying federal statute, and she indicated that she would seek to challenge it.In the same filing of charges, the Amazon Labor Union accused the company of threatening to withhold benefits from employees if they voted to unionize, and of inaccurately indicating to employees that they could be fired if the warehouse were to unionize and they failed to pay union dues. The labor board also found merit to these accusations, according to an email from the attorney at the regional office, Matt Jackson.Mr. Jackson said the agency would soon issue a complaint reflecting those accusations unless Amazon settled the case. The complaint would be litigated before an administrative law judge, whose decision could be appealed to the labor board in Washington.Understand the Unionization Efforts at AmazonBeating Amazon: A homegrown, low-budget push to unionize at a Staten Island warehouse led to a historic labor victory. (Workers at another nearby Amazon facility rejected joining a similar effort shortly after.)Retaliation: Weeks after the landmark win, Amazon fired several managers in Staten Island. Some see it as retaliation for their involvement in the unionization efforts.A New Playbook: The success of the Amazon union’s independent drive has organized labor asking whether it should take more of a back seat.Amazon’s Approach: The company has countered unionization efforts with mandatory “training” sessions that carry clear anti-union messages.Mr. Goldstein applauded Ms. Abruzzo and the regional office for taking “decisive steps ending required captive audience meetings” and said the right to unionize “will be protected by ending Amazon’s inherently coercive work practices.”Kelly Nantel, an Amazon spokeswoman, said in a statement that “these allegations are false and we look forward to showing that through the process.”At Starbucks, where the union has won initial votes at more than 50 stores since December, the labor board issued a complaint Friday over a series of charges the union filed, most of them in February, accusing the company of illegal behavior. Those accusations include firing employees in retaliation for supporting the union; threatening employees’ ability to receive new benefits if they choose to unionize; requiring workers to be available for a minimum number of hours to remain employed at a unionized store without bargaining over the change, as a way to force out at least one union supporter; and effectively promising benefits to workers if they decide not to unionize.In addition to those allegations, the labor board found merit to accusations that the company intimidated workers by closing Buffalo-area stores and engaging in surveillance of workers while they were on the job. All of those actions would be illegal.In a statement, Starbucks Workers United, the branch of the union representing workers there, said that the finding “confirms the extent and depravity of Starbucks’s conduct in Western New York for the better part of a year.” It added: “Starbucks will be held accountable for the union-busting minefield they forced workers to walk through in fighting for their right to organize.”Starbucks said in a statement that the complaint doesn’t constitute a judgment by the labor board, adding, “We believe the allegations contained in the complaint are false, and we look forward to presenting our evidence when the allegations are adjudicated.” More

Christopher Waller, a governor at the Federal Reserve, faced an uncomfortable task on Friday night: He delivered remarks at a conference packed with leading academic economists titled, suggestively, “How Monetary Policy Got Behind the Curve and How to Get Back.”Fed officials — who set America’s monetary policy — have found themselves on the defensive in Washington, on Wall Street and within the economics profession as inflation has run at its fastest rate in 40 years. Friday’s event, at Stanford University’s Hoover Institute, was the clearest expression yet of the growing sense of skepticism around the Fed’s recent policy approach.The Fed is raising interest rates, and on Wednesday lifted them by the largest increment since 2000. But prominent economists on Friday blasted America’s central bankers for being slow to realize that inflation was going to run meaningfully higher in 2021 as big government spending goosed consumer demand. They criticized the Fed for taking monetary policy support away from the economy too haltingly once it began to react. Some suggested that it was still moving tentatively when more decisive action was warranted.Mr. Waller defended and explained the decisions the Fed made last year. Many inflation forecasters failed to predict the 2021 price burst, he noted, pointing out that the Fed pivoted toward removing policy support starting as early as September, when it became clear that inflation was a problem.“The Fed was not alone in underestimating the strength of inflation that revealed itself in late 2021,” said Mr. Waller, who expected inflation to be slightly higher than many of his colleagues. He noted that the Fed’s policy-setting committee had to coalesce around policy moves, which can take time given its size: It has 12 regional presidents and up to seven governors in Washington.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve began raising interest rates for the first time since 2018. Here is what the increases mean for consumers.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.“This process may lead to more gradual changes in policy as members have to compromise in order to reach a consensus,” Mr. Waller said.Such explanations have done little to shield the Fed so far. Lawrence H. Summers, a former Harvard president and Treasury secretary, suggested earlier Friday that an economic overheating was predictable last year as the government spent heavily and that “it was reasonable to expect that the bathtub would overflow.” Kevin Warsh, a former Fed governor, called inflation “a clear and present danger to the American people,” and declared the Fed’s reaction “slow.”And even as the Fed comes under fire for responding too ploddingly as inflation pressures began to build, a new debate is evolving over how quickly — and how much — rates need to increase to catch up and wrestle fast price increases back under control.The Fed lifted interest rates half a percentage point this week and forecast more to come. Still, Jerome H. Powell, the Fed chair, said officials were not discussing an even larger, 0.75-point move — suggesting that central bankers are still hoping to control inflation without choking off growth abruptly and shocking the economy.“If supply constraints unwind quickly, we might only need to take policy back to neutral or go modestly above it to bring inflation back down,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, wrote in a post on Friday. “Neutral” refers to the policy setting that neither stokes nor slows the economy.Inflation F.A.Q.Card 1 of 6What is inflation? More