Economy

The ruling, raising the minimum wage and phasing out a lower wage for tipped workers, said legislators had acted improperly in dodging a referendum.The Michigan Supreme Court ruled on Wednesday that legislators had unconstitutionally subverted a voter-sponsored proposal to raise the state’s minimum wage.As a result of the 4-to-3 ruling, labor groups expect Michigan’s hourly minimum wage of $10.33 to increase by at least $2 in February, once the state treasurer calculates inflation adjustments. There will be subsequent cost-of-living increases through 2029.In addition, tipped workers, who currently can be paid as little as $3.84 per hour, will be subject to the same minimum as all other workers by 2029, putting Michigan on a path to be the eighth state to establish a standard wage floor for all workers.Labor activists and union groups celebrated the Michigan court’s decision.“We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top,” Saru Jayaraman, the president of One Fair Wage, a national nonprofit organizing group, said in a statement.Her group is directly cited in the case because of its involvement in gathering the necessary signatures from Michiganders in 2018 to invoke the ballot initiative and send the proposal to the Legislature, which Republicans led at the time.To prevent the wage increase proposal from reaching the 2018 general election ballot, a large cohort of restaurateurs — led by the Michigan Restaurant and Lodging Association — pushed the Legislature to simply adopt the proposal sponsored by One Fair Wage and other groups, which the Legislature did. Legislators then rolled back the law’s provisions after the election.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

Reinsurers have benefited from a favorable environment thanks to increased pricing, which has boosted both premium growth and margins.They are also increasingly shifting the risk of catastrophe losses towards primary insurers, analysts have said, reducing their loss burden.Everest, one of the world’s biggest property and casualty reinsurers, said net written premium in its reinsurance segment surged 15.7% to $3.03 billion for the quarter.The company’s net investment income rose to $528 million in the quarter from $357 million a year earlier.A significant portion of the company’s investment portfolio consists of bonds, which return better yields in a high interest rate environment.Additionally, stock investments have also benefitted from the rally driven by an AI boom and hopes of a soft landing for the economy.Bermuda-based Everest provides property, casualty and specialty reinsurance and insurance offerings across more than 100 countries on six continents. Everest’s combined ratio came in at 90.3% in the quarter, compared with 87.7% a year earlier. A ratio below 100% means the company earned more from premiums than it paid out in claims.Net income rose to $724 million, or $16.70 per share, in the three months ended June 30, from $670 million, or $16.26 per share, a year earlier.Shares of the company have jumped 11.1% so far this year, compared to a 14% gain in the benchmark S&P 500 index. More

The New York Times wants to hear from recent college graduates, other young job seekers and hiring managers about this year’s job market.The economy is growing. Unemployment is low. But the job market is not as hot as it used to be, and younger applicants, with or without college degrees, are feeling the pinch. Hiring projections for this year’s college graduating class are below last year’s, and the downturn is particularly notable in fields like finance, insurance, marketing and real estate.I cover economics at The New York Times, and I would like to hear from recent college graduates and other young job seekers, as well as hiring managers, about what the job market has looked like to them this year.Your responses will help us gain a fuller, more nuanced understanding of how the broader trends are being felt — or, in some cases, overcome.We’ll read every response, and we’ll reach out to some people to learn more. We won’t publish your name or any part of your submission without hearing back from you and verifying your story. And we won’t share your contact information outside the Times newsroom. If you prefer to share tips or thoughts confidentially, you can do so here.Our first set of questions are for job seekers, and then we have questions for hiring managers.Tell us about your recent experience in seeking work — or workers. More

new video loaded: More

Standard DigitalWeekend Print + Standard Digitalwasnow $85 per monthBilled Quarterly at $199. Complete digital access plus the FT newspaper delivered Monday-Saturday.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

ORLANDO, Florida (Reuters) – Japanese and Chinese monetary policy is diverging, meaning other Asian currencies may now also be at a crossroads.     Do currencies, such as the South Korean won, Indian rupee and Indonesian rupiah take their cue from a firming yen being supported by expectations of policy tightening from the Bank of Japan, or from a depreciating yuan being weighed down by the People’s Bank of China’s need to ease policy to stimulate a struggling economy?    Until recently, the yen and yuan had been joined at the hip, with both under heavy selling pressure as a relentless ‘higher for longer’ Fed outlook caused the U.S. dollar to rally. But that relationship and U.S. rate expectations have both shifted.     Between late April and mid-July, the simple 30-day rolling correlation between the yen and yuan steadily strengthened to its most positive level in 10 months. But it has subsequently reversed.This is largely because the PBOC surprised markets last week by cutting key interest rates. And this week the yuan, which is tightly controlled by the central bank, was fixed at the weakest level against the dollar this year. Meanwhile, Chinese bond yields are at record lows, and pressure on the exchange rate is firmly to the downside.    The yen, meanwhile, has jumped some 8% from its recent 38-year low against the dollar. The BOJ followed up March’s historic rate hike – the first in 17 years – with a larger-than-expected increase on Wednesday and signaled its commitment to end its decades-long use of ultra-loose policy.    Of course, around $100 billion of yen-buying intervention from Tokyo in the last few months has put a floor under the currency, and the BOJ’s approach to raising rates is hardly gung-ho. So the yen is not a sure-fire bet to strengthen aggressively from here.     But the policy divergence with China is clear, and it’s muddying the waters for other Asian currencies. From China’s mini-devaluation in 2015 to the beginning of the Federal Reserve’s recent rate-hiking cycle, every Asian currency was more sensitive to dollar/yuan than dollar/yen, especially the won, rupiah, Malaysian ringgit and Taiwanese dollar. Even India’s rupee, the Asian currency least influenced by the yuan, was still three times more sensitive to moves in China’s currency than Japan’s.However, once the Fed started tightening policy in 2022, Asian currencies began to be led mostly by the extraordinary rise in dollar/yen. According to analysts at Goldman Sachs, longer-term correlations show that the yen’s influence on Asian currencies surged dramatically when U.S. rates started rising.But that correlation has faded since the Fed stopped hiking a year ago.”As such, the broad USD and USD/CNY matters more for Asian FX than USD/JPY,” they wrote in a recent report.So if the yuan stays weak, Asian currencies could remain on the soft side even as a Fed easing cycle weighs on the dollar. That’s probably not bad news – given China’s economic struggles and the likely slowdown in U.S. growth, Asian capitals may welcome weaker exchange rates more than they fear the inflationary consequences.Beijing likely won’t be too upset if the yuan and yen diverge.     Since the onset of the pandemic in March 2020, Japan’s currency has depreciated around 30% against the yuan. Or to put it another way, on a simplistic exchange rate basis, Japanese goods became 30% cheaper over that time compared with equivalent Chinese goods on the international market.     Meanwhile, China is also facing the specter of an intensifying trade dispute with the U.S. The trade war between the two countries during Donald Trump’s presidency was followed by protectionist policies of President Joe Biden’s administration, and the dark cloud of much heavier U.S. tariffs after November’s election is looming. This has all had the expected impact: U.S. imports from China as a share of its total imports fell by 8% over the 2017-2023 period, according to Oxford Economics. However, the share of U.S. imports from Europe, Mexico, Vietnam, Taiwan and South Korea rose. Meanwhile, these countries – especially Vietnam – all saw imports from China rise as a share of their total imports over the same period. Beijing will want to ensure that any deterioration in bilateral U.S.-China trade continues to be made up for elsewhere. A weaker yuan, relative to its main regional rival the yen, might help.(The opinions expressed here are those of the author, a columnist for Reuters.) (By Jamie McGeever; Editing by Tomasz Janowski) More

WASHINGTON (Reuters) -The Federal Reserve is expected to leave interest rates unchanged at the end of a two-day policy meeting on Wednesday, but also indicate that a reduction in borrowing costs could come as soon as September.Contracts tied to the U.S. central bank’s policy rate show investors are convinced a rate cut will happen at the Sept. 17-18 meeting, with the only disagreement over whether the Fed will begin easing policy with a quarter-percentage-point reduction, as most expect, or a more aggressive half-percentage-point cut, according to CME Group’s (NASDAQ:CME) FedWatch tool.The Fed has kept its policy rate in the 5.25%-5.50% range for the past year.A 50-basis-point rate cut would likely require evidence that the economy is slowing faster than expected and putting at risk the still-low, 4.1% unemployment rate.Throughout the Fed’s more than two-year battle to tame inflation, which included the fastest rate hikes since the 1980s, the economy has grown faster and performed better than expected – and the most recent data suggests that is continuing.The economy grew at an above-trend 2.8% annual rate in the second quarter. Job openings and hiring data released on Tuesday showed continued resilience in the job market, with the number of open positions remaining above 8 million. The layoffs rate also dropped. The rate at which workers are quitting jobs and the ratio of unemployed people to open positions, now at 1.2, are both roughly where they were before the COVID-19 pandemic, a fact that has led Fed officials to regard the supply of and demand for workers in the economy as roughly balanced. The employment cost index, a quarterly measure that includes wages and benefits, increased 0.9% in the second quarter, less than the 1% gain expected by economists in a Reuters poll. The reading likely will add to the sense among Fed officials that the job market and rising wages won’t stoke new price increases. “The labor market has cooled over the last several months but isn’t weak,” said Nancy Vanden Houten, lead U.S. economist for Oxford Economics. “That’s a scenario the Federal Reserve wants to guard against, and we expect the Fed to begin cutting rates in September.”The central bank’s new policy statement will be released at 2 p.m. EDT (1800 GMT), and Fed Chair Jerome Powell will hold a press conference half an hour later.’NORMALIZATION OF ACTIVITY’Analysts say they expect Powell to emphasize that the Fed will remain “data-dependent” when it comes to its ultimate rates decision, with a larger-than-usual gap of time between now and the next meeting and more data to go along with it.That begins with the release on Friday of the Labor Department’s employment report for July. Economists polled by Reuters on average expect firms added a still-solid 175,000 jobs this month, with the unemployment rate unchanged. Recent data has shown inflation continuing to slow, with the headline personal consumption expenditures price index increasing at a 2.5% annual rate in June and at around 1.5% for the last three months.The Fed targets 2% annual inflation based on the PCE price index.”The Fed does not believe it needs to hurry” and cut rates now, said Tim Duy, chief U.S. economist at SGH Macro Advisors. After a strong initial report on second-quarter economic growth, “the data remain consistent with a normalization of activity rather than a sharper slowdown. Rate cuts at this point are still preemptive with the goal of stabilizing activity at the current near-trend pace.” More

Private payrolls increased by just 122,000 in July, the slowest pace since January and below the upwardly revised 155,000 in June and the estimate for 150,000, ADP reported.
Wages for those who stayed in their jobs increased 4.8% from a year ago, the smallest increase since July 2021.

A “Now Hiring” sign is seen at a FedEx location on Broadway on June 07, 2024 in New York City. 
Michael M. Santiago | Getty Images

Private job growth slowed further in July while the pace of wage gains hit a three-year low, payrolls processing firm ADP reported Wednesday.
Companies added just 122,000 jobs on the month, the slowest pace since January and below the upwardly revised 155,000 in June. Economists surveyed by Dow Jones had been looking for a gain of 150,000.

ADP also reported that wages for those who stayed in their jobs increased 4.8% from a year ago, the smallest increase since July 2021 and down 0.1 percentage point from June.
“With wage growth abating, the labor market is playing along with the Federal Reserve’s effort to slow inflation,” said ADP chief economist Nela Richardson. “If inflation goes back up, it won’t be because of labor.”
Futures tied to major stock indexes added to gains following the report while Treasury yields fell.
There was more positive inflation news Wednesday, as the Labor Department’s Bureau of Labor Services reported that the employment cost index, an indicator Fed officials watch closely, increased just 0.9% in the second quarter, according to seasonally adjusted figures.
That was below the 1.2% acceleration in the first quarter and the Dow Jones estimate for a 1% increase.

Both reports could add to the likelihood that the Fed will signal a September rate cut when it concludes its two-day meeting later in the day.
Job growth was heavily concentrated in two sectors — trade, transportation and utilities, which added 61,000 workers, and construction, which contributed 39,000. Other sectors seeing gains included leisure and hospitality (24,000), education and health services (22,000) and other services (19,000).
Several sectors reported net losses on the month. They included professional and business services (-37,000), information (-18,000) and manufacturing (-4,000). Companies that employ fewer than 50 people also registered a loss, down 7,000 in June.
Geographically, the job gains were concentrated in the South, which saw a gain of 55,000, while the Midwest added just 17,000..
The ADP report comes two days before the Labor Department’s Bureau of Labor Services releases its nonfarm payrolls count, which, unlike the ADP tally, includes government jobs. The two reports can differ substantially, with ADP overshooting the BLS estimate of 136,000 for private payrolls in June.
Economists expect job growth of 185,000 in July, down from 206,000 in June, with the unemployment rate holding steady at 4.1%. More