Economy

Job openings in the United States and the number of workers quitting their jobs remained near record highs in January, an indicator of demand for labor and of worker leverage.The data, released by the Labor Department on Wednesday as part of its monthly Job Openings and Labor Turnover Survey, or JOLTS report, was another sign of an economy that wobbled slightly yet remained sturdy when faced with the Omicron wave of the coronavirus this winter.Job openings dipped to 11.3 million, down slightly from a record in December, but were still up about 61 percent from February 2020.In a potential sign of the impact wrought by the variant’s spread, several industries that had been rebounding from the pandemic, and had been most hungry for workers, reported fewer job openings. Accommodation and food services experienced a drop of 288,000. Transportation, warehousing and utilities reported 132,000 fewer openings. But openings continued to increase in both manufacturing and the service sector at large.Some 4.3 million people left their jobs voluntarily in January, edging down somewhat from the record 4.5 million who quit in November. While layoffs picked up slightly in January, they were still hovering above historical lows.For Jeffrey Roach, the chief economist at LPL Financial, the most fascinating current in the labor market is the increased share of workers who are quitting jobs not to make a career change but simply to achieve higher pay.“You can see people are actually staying within their industry — and it really helps the ‘lower-skilled’ worker,” he said. “I think we’ll continue to see really high churn rates.”The share of Americans in their prime working years — ages 25 to 54 — who were either working or looking for work plummeted in 2020, yet it has recovered to a rate of 79.5 percent, within 1 percentage point of prepandemic levels, a much faster rebound than occurred after the last downturn.The prevailing environment is likely to increase the price of labor — a welcome development for workers who have dealt with stagnant wages and a lack of power for decades, and an unsettling one for employers as high inflation increases the cost of doing business.Some business executives and managers have expressed concern — in corporate earnings and in private calls — that “wage inflation” could set in and cut into profits if the rapid wage gains that workers achieved last year don’t taper off.“When it comes to their business, they’re very concerned about it: What does that mean to their margins going forward? What kind of pricing power do they have?” said Steve Wyett, chief investment strategist at BOK Financial, a regional bank based in Oklahoma, where unemployment is notably low at 2.8 percent. “How do we protect ourselves against this?”Data from the Federal Reserve Bank of Atlanta shows that workers who quit to take other jobs are receiving larger pay increases than those who are staying put, though much of this movement is in lower-wage sectors.After the Labor Department’s employment survey showed strong wage gains in January, hourly earnings were nearly flat in February. And even if wage gains stay strong, they remain far from runaway levels.Fed data shows that median annual pay increases in the American labor market have been well within the range — 3 to 7 percent — that prevailed from the 1980s until the 2007-9 recession. More

They have pointed to the Biden administration’s policies on the Keystone XL pipeline and certain oil and gas leases, which have had little impact on prices.WASHINGTON — As gas prices hit a high this week, top Republican lawmakers took to the airwaves and the floors of Congress with misleading claims that pinned the blame on President Biden and his energy policies.Mr. Biden warned that his ban on imports of Russian oil, gas and coal, announced on Tuesday as a response to Russia’s invasion of Ukraine, would cause gas prices to rise further. High costs are expected to last as long as the confrontation does.While Republican lawmakers supported the ban, they asserted that the pain at the pump long preceded the war in Ukraine. Gas price hikes, they said, were the result of Mr. Biden’s cancellation of the Keystone XL pipeline, the temporary halt on new drilling leases on public lands and the surrendering of “energy independence” — all incorrect assertions.Here’s a fact check of their claims.What Was Said“This administration wants to ramp up energy imports from Iran and Venezuela. That is the world’s largest state sponsor of terror and a thuggish South America dictator, respectively. They would rather buy from these people than buy from Texas, Alaska and Pennsylvania.”— Senator Mitch McConnell, Republican of Kentucky and the minority leader, in a speech on Tuesday“Democrats want to blame surging prices on Russia. But the truth is, their out-of-touch policies are why we are here in the first place. Remember what happened on Day 1 with one-party rule? The president canceled the Keystone pipeline, and then he stopped new oil and gas leases on federal lands and waters.”— Representative Kevin McCarthy, Republican of California and the minority leader, in a speech on Tuesday“In the four years of the Trump-Pence administration, we achieved energy independence for the first time in 70 years. We were a net exporter of energy. But from very early on, with killing the Keystone pipeline, taking federal lands off the list for exploration, sidelining leases for oil and natural gas — once again, before Ukraine ever happened, we saw rising gasoline prices.”— Former Vice President Mike Pence in an interview on Fox Business on TuesdayThese claims are misleading. The primary reason for rising gas prices over the past year is the coronavirus pandemic and its disruptions to global supply and demand.“Covid changed the game, not President Biden,” said Patrick De Haan, the head of petroleum analysis for GasBuddy, which tracks gasoline prices. “U.S. oil production fell in the last eight months of President Trump’s tenure. Is that his fault? No.”“The pandemic brought us to our knees,” Mr. De Haan added.In the early months of 2020, when the virus took hold, demand for oil dried up and prices plummeted, with the benchmark price for crude oil in the United States falling to negative $37.63 that April. In response, producers in the United States and around the world began decreasing output.As pandemic restrictions loosened worldwide and economies recovered, demand outpaced supply. That was “mostly attributable” to the decision by OPEC Plus, an alliance of oil-producing countries that controls about half the world’s supply, to limit increases in production, according to the U.S. Energy Information Administration. Domestic production also remains below prepandemic levels, as capital spending declined and investors remained reluctant to provide financing to the oil industry.Russia’s invasion of Ukraine has only compounded the issues.“When you throw a war on top of this, this is possibly the worst escalation you can have of this,” said Abhiram Rajendran, the head of oil market research at Energy Intelligence, an energy information company. “You’re literally pouring gasoline on general inflationary pressure.”These factors are largely out of Mr. Biden’s control, experts agreed, though they said he had not exactly sent positive signals to the oil and gas industry and its investors by vowing to reduce emissions and fossil fuel reliance.Mr. De Haan said the Biden administration was “clearly less friendly” to the industry, which may have indirectly affected investor attitudes. But overall, he said, that stance has played a “very, very small role pushing gas prices up.”President Biden announced a ban on imports of Russian oil in response to the country’s invasion of Ukraine.Tom Brenner for The New York TimesMr. Rajendran said the Biden administration had emphasized climate change issues while paying lip service to energy security.“There has been a pretty stark miscalculation of the amount of supply we would need to keep energy prices at affordable levels,” he said. “It was taken for granted. There was too much focus on the energy transition.”But presidents, Mr. Rajendran said, “have very little impact on short-term supply.”“The key relationship to watch is between companies and investors,” he said.It is true that the Biden administration is in talks with Venezuela and Iran over their oil supplies. But the administration is also urging American companies to ramp up production — to the dismay of climate change activists and contrary to Republican lawmakers’ suggestions that the White House is intent on handcuffing domestic producers.Speaking before the National Petroleum Council in December, Jennifer M. Granholm, the energy secretary, told oil companies to “please take advantage of the leases that you have, hire workers, get your rig count up.”Understand Rising Gas Prices in the U.S.Card 1 of 5A steady rise. More

LONDON (Reuters) – A Russian-operated oil tanker that Britain turned away over a week ago has yet to find a port to discharge its cargo, and many other vessels are likely to be in the same position as buyers shun trade deals following Moscow’s invasion of Ukraine. On Tuesday, U.S. President Joe Biden imposed an immediate ban on Russian oil and other energy imports and Britain announced soon after that it would phase out the import of Russian oil and oil products by the end of 2022.The European Union has yet to provide clarity on the prospect of a similar ban by the bloc. The European Commission, the EU executive, has only said it would continue to work on further sanctions.Britain on March 1 banned from its ports all ships that are Russian-owned, operated, controlled, chartered, registered or flagged. The situation is not clear-cut as Britain later said Russia could still send oil and gas to the country because the sanction targeted the vessel, not its cargo.Dockers, however, refused to unload a tanker carrying Russian liquefied natural gas (LNG) last week, forcing it to discharge in France. Earlier on Feb. 28, the NS Champion, operated by Russian shipping company Sovcomflot (SCF), changed course and sailed away from Britain towards Denmark, ship-tracking data on Eikon showed.The vessel last reported its position close to Denmark’s coast on Wednesday with its status showing as underway using engine, tracking data showed. SCF did not respond to a request for comment, and the ship’s crew could not be reached. Under Danish law, ports are obliged to receive vessels provided there is space and security considerations are met.Danish authorities did immediately comment on whether they had been in contact with the NS Champion.Up to 65 million barrels of Russian crude are estimated to be on board 90 tankers, which have yet to reach destinations, predictive maritime analytics company Windward said. Seven of those vessels, with 5 million barrels of oil, were reporting their positions as headed to the United States, Windward added. European Union countries are divided on whether to ban energy cargoes with a Russia footprint. Other ships with Russian gas have been able to deliver their cargoes. Two LNG tankers have docked and discharged in ports in France and Belgium since March 5, analysis by data intelligence firm ICIS showed.Denmark is pushing for the EU to take a common decision on excluding Russian vessels from ports in the bloc, Foreign Minister Jeppe Kofod said in emailed comments to Reuters.”It will naturally be a far-reaching decision that requires careful preparation. Therefore, it is not something you just do,” he said. SCF was among the Russian entities the U.S. Treasury restricted in February from raising capital in U.S. markets, which shipping sources say will complicate transactions for the Moscow-listed company.Shipowners and operators were “struggling to keep up with the unfolding sanctions and are concerned that activities that are permitted today, will be banned tomorrow,” said Alexander Brandt, a sanctions lawyer at law firm Reed Smith. Significant numbers of Russian-linked tankers carrying crude oil and LNG call at UK ports each year as well as ships carrying steel and other goods, added Nick Austin, a shipping partner at Reed Smith.”Those ships and cargoes will now have to go elsewhere, or more likely never leave Russia at all,” Austin said. More

How the Ruble’s Value Has Changed

Note: Scale is inverted to show the decline in the ruble’s value. Price as of 1:10 p.m. Eastern on the global currency market.Source: FactSetBy The New York TimesRussia’s currency continued its descent on Wednesday as trading in the ruble was restarted on the Moscow Exchange. But in an effort to stanch the currency’s decline, the Russian central bank issued an order further restricting access to U.S. dollars.The Central Bank of Russia said on Wednesday that owners of foreign-currency accounts in Russian banks would be allowed to withdraw only up to $10,000 in dollars (regardless of the currency in the account), and that the rest would have to be taken out in rubles. New foreign-currency accounts can be opened, but only rubles will be permitted to be withdrawn. The order will be in place until Sept. 9, the central bank said. Until then, banks cannot sell foreign currency to Russians, either.The measures seem intended to curb the ability of Russian citizens to convert their rubles into dollars or other currencies, as the central bank tries to support the national currency, which is rapidly losing its purchasing power.Russia’s ruble has lost about 40 percent of its value against the U.S. dollar this year as Western leaders have moved to isolate the country from the global economy with sanctions in response to its invasion of Ukraine. Those moves, which include the freezing of Russian central bank assets that are held in the United States, will make it harder for the country to prop up its currency.Since currency trading on the Moscow Exchange was halted on Friday, the United States and Britain said they would stop importing Russian oil, while the European Union laid out a plan to reduce its dependency on Russian energy, and Fitch Ratings said a default on Russia’s sovereign debt was “imminent.”“The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective nonpayment of its sovereign debt obligations,” Fitch Ratings said on Tuesday.The ruble was trading at 117 to the U.S. dollar in Russia on Wednesday, after closing at 105 rubles to the U.S. dollar on Friday. Trading in rubles in global currency markets, which was very limited, priced the ruble at about 139 to the U.S. dollar.Trading on the Moscow stock market is still halted, the central bank said. It last traded on Feb. 25. More

TOKYO (Reuters) -Japan is unlikely to slide into stagflation, a condition where rising inflation and shrinking economic growth co-exist, a senior central bank official said on Wednesday.With the Ukraine crisis triggering sharp rises in energy and commodity prices, consumer inflation will “clearly accelerate” as firms pass on the costs to households, said Seiichi Shimizu, head of the Bank of Japan’s monetary affairs department.”But we don’t expect Japan to face a stagflation-like situation, defined as a combination of rising inflation and a contraction in economic growth,” he told parliament.”We expect Japan’s economy to recover as the hit to service consumption from the coronavirus pandemic eases,” adding to support from solid external demand, he said.The remarks, which come ahead of the BOJ’s policy meeting next week, suggest the central bank will stick to its projection of a moderate economic recovery but acknowledge rising inflationary pressure from the recent surge in energy prices.Under an assessment made in January, the BOJ currently projects consumer inflation to “accelerate” as companies “gradually” pass on rising raw material costs to households.While rising commodity and grain costs will push up energy and food prices in the short-term, it will hurt the economy in the long run through declines in household income and corporate profits, Shimizu said. More

It said that most of the 40 billion hryvnias ($1.35 billion) taken out of the bank accounts had been spent by companies to pay salaries and taxes and that the accounts had not been replenished. “At the same time, due to the slowdown in economic activity, the flow of funds to their accounts has slowed down significantly,” it said in a written comment to Reuters.The central bank said it would continue supporting banks with refinancing loans to prevent their insolvency.As of now “banks have a sufficient stock of highly liquid assets to meet their obligations, so the reduction in the funds of legal entities will not lead to a violation of their stability,” the central bank said. The volume of individual deposits in the hryvnia currency had grown by 50 billion hryvnias during the same period as people do not have access to banks in some conflict zones, meaning they cannot take physical money out. ($1 = 29.7000 hryvnias) More

Brussels has told EU countries to use the €200bn of unused loans available under the bloc’s recovery plan before considering more collective borrowing, as capitals seek ways of coping with the shocks reverberating from the Ukraine war. Valdis Dombrovskis, the European Commission’s executive vice-president, told the Financial Times that the “first line” reaction for member states was to tap the unused capacity of the union’s €800bn Recovery and Resilience Plan. This, he said, could be channelled into investments in energy security and “moving away from Russian gas and oil”. The EU was also working on temporary state aid rules to help member states support companies hard-hit by the crisis, as well as additional measures for a “co-ordinated EU response”, he added. His words come as member states, including France, open a discussion over the idea of extra EU borrowing to help fund efforts to boost the union’s energy independence and security requirements ahead of a summit beginning in Versailles on Thursday. EU officials have been examining options for extra fundraising, but Dombrovskis made it clear that the priority is making sure the EU’s existing budgetary facilities are used to the full. The EU’s Covid-19 recovery fund pays out both grants and loans but member states including Spain, Portugal and Cyprus have not yet chosen to draw down the full amount of lending available. They can do so until August 2023. Spain still has the ability to tap at least €70bn of recovery fund cash, Portugal €12bn and Cyprus €1.3bn, according to commission figures. Italy has already demanded the full quantity of grants and loans available, totalling more than €200bn. The recovery fund cash cannot be used to substitute a recurring national budget expenditure but could fund solar panel installations and increase resilience such as cyber defence. One EU diplomat said the idea of boosting the EU’s common borrowing had been “loosely” mentioned in recent conversations among member states but was not currently the union’s focus given the untapped capacity that is already available. A French official said that the summit will see the “first exchanges” on the possibility of a new European resilience and investment plan, with a particular focus on energy and defence. But the official stressed that the debate on the plan was only just beginning. The focus at present is on assessing the economic consequences of the war in Ukraine, before examining the appropriate response. Dombrovskis also expressed caution over ideas from some national capitals that money they borrow to fund green projects or even defence could be exempted from the bloc’s debt reduction rules.Under the stability and growth pact, which has been suspended during the coronavirus pandemic, countries must reduce debt levels towards 60 per cent of gross domestic product and aim to keep budget deficits below 3 per cent of GDP. “Even if we decide to pretend that part of the debt doesn’t exist, it still exists and still needs to be financed, and markets will still want to know how it’s going to be financed,” said Dombrovskis.But he accepted that there could be “more gradual debt reduction pathways” for member states. The pact is currently suspended in the wake of the Covid-19 crisis, and EU officials have signalled that they will consider keeping it on hold next year as well. Dombrovskis, a former prime minister of Latvia who has long warned of the dangers of Russian aggression, said the EU and allies would agree further trade measures against Moscow “in a matter of days”.The EU is waiting for the 27 member states to agree before acting with the US, UK, Japan and other democracies to deprive Russia of “most favoured nation” status at the World Trade Organization, which would increase tariffs. “We are coordinating with other international partners concerning the withdrawal of most favoured nation status from Russia and Belarus, which would allow us to impose additional tariffs on Russia and Russian imports,” Dombrovskis said. Canada has already made such a move.“Both options are possible, imposing tariffs or also proceeding with further import bans or export controls,” Dombrovskis said. Additional reporting by Victor Mallet in Paris More