WASHINGTON: US job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent.
Non-farm payrolls increased 138,000 last month, as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday.
March and April data were revised to show 66,000 fewer jobs created than previously reported. May’s job gains marked a sharp deceleration from the 181,000 monthly average over the past 12 months.
While last month’s job gains could still be sufficient for the Federal Reserve to raise interest rates this month, the modest increase could raise concerns about the economy’s health after growth slowed in the first quarter.
The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.
Job gains are slowing as the labor market nears full employment.
The unemployment rate fell one-tenth of a percentage point to its lowest level since May 2001.
It has dropped five-tenths of a percentage point this year. Last month’s drop came as people left the labor force. The smaller and more volatile survey of households also showed a drop in employment.
The closely watched employment report was released less than two weeks before the Fed’s June 13-14 policy meeting.
Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs last month and the unemployment rate holding steady at 4.4 percent.
Prior to the report, the US financial markets had almost priced in a 25-basis points increase in the Fed’s benchmark overnight interest rate this month, according to CME FedWatch.
Minutes of the Fed’s May 2-3 policy meeting, which were published last week, showed that while policymakers agreed they should hold off hiking rates until there was evidence the growth slowdown was transitory, “most participants” believed “it would soon be appropriate” to raise borrowing costs.
The US central bank raised interest rates by 25 basis points in March.
Data on consumer spending and manufacturing suggest the economy gained speed early in the second quarter after gross domestic product (GDP) increased at a tepid 1.2 percent annualized rate at the start of the year.
The Atlanta Fed is forecasting GDP increasing at a 4 percent pace in the second quarter. But persistently sluggish wage growth could cast a shadow on further monetary policy tightening. Average hourly earnings rose 4 cents or 0.2 percent in May after a similar gain in April. That left the year-on-year increase in wages at 2.5 percent.
The tepid average hourly earnings reading comes as annual inflation rates have retreated in recent months. But with the labor market expected to hit full employment this year, there is optimism that wage growth will accelerate.
There is growing anecdotal evidence of companies struggling to find qualified workers. The Fed in its Beige Book on Wednesday said a manufacturing firm in the Chicago district reported raising wages for unskilled laborers by 10 percent to attract better-quality workers and retain its workforce.
President Donald Trump, who inherited a strong job market from the administration of former President Barack Obama, has vowed to sharply boost economic growth and further strengthen the labor market by slashing taxes and cutting regulation.
There are, however, fears that political scandals could derail the Trump administration’s economic agenda.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell two-tenths of a percentage point to 62.7 percent.
It has rebounded from a multi-decade low of 62.4 percent in September 2015 and economists see limited room for further gains as the pool of discouraged workers shrinks.
Manufacturing employment fell by 1,000 jobs last month as payrolls in the automobile sector dropped 1,500 amid falling sales. Ford Motor Co. said last month it planned to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives.
Construction payrolls rose 11,000 last month. Retail employment fell 6,100, declining for a fourth straight month. Department store operators like J.C. Penney Company Inc., Macy’s Inc. and Abercrombie & Fitch are struggling against stiff competition from online retailers led by Amazon.
Government employment decreased 9,000 last month.
US job growth slows; unemployment rate drops to 4.3%
US job growth slows; unemployment rate drops to 4.3%
Pakistan Stock Exchange may gain at least 27% by end of 2025 — Bloomberg
- Benchmark KSE-100 Index forecast to increase to 127,000 points by Dec. 2025, a 34% rise, from 94,704 points it closed on Friday
- Key index advanced as much as 0.6% on Monday, taking gains to more than 50% this year, the second best performer globally
ISLAMABAD: Pakistan’s stocks are expected to advance by more than a quarter by the end of next year as the nation’s economy shows improvement under a loan program with the International Monetary Fund and the currency stabilizes, Bloomberg reported on Monday, quoting two brokerage houses.
The benchmark KSE-100 Index is forecast to increase to 127,000 points by December 2025, or a 34% rise, from the 94,704 points it closed last Friday, according to Topline Securities Ltd. in a report announced on Nov. 16. Arif Habib Ltd. targets the index to reach 120,000 points, a gain of 27%.
“The stage is set for a potential market re-rating with declining interest rates, a stable rupee, and improving macroeconomic indicators,” Karachi-based brokerage Arif Habib commented in a report.
Pakistan’s economy has stabilized with inflation easing from record levels that has allowed the central bank to cut the interest rate for four straight meetings to 15 percent, the lowest in two years.
The key index advanced as much as 0.6% on Monday, taking its gains to more than 50% this year, the second best performer globally, according to data compiled by Bloomberg.
The equity market will be offering a 37% return including 10% dividend yield by the end of 2025 because of economic stability and falling bond yields, Karachi-based Topline said in a separate report.
Pakistan is also increasingly attracting the attention of foreign investors, particularly in its debt and equity markets, said Arif Habib.
Saudi commercial records surge 68% in 20 months
RIYADH: Saudi Arabia has seen a remarkable 68 percent growth in commercial records over the 20 months since the implementation of its New Companies Law, according to a recent government report.
The law, which took effect on Jan. 19, 2023, introduced significant reforms aimed at simplifying business processes and fostering a more dynamic corporate environment. By the end of the third quarter of 2024, the number of commercial records had risen to 389,413, up from 230,762 before the law’s introduction, the Ministry of Commerce reported.
Among the law’s key innovations are streamlined processes for setting up joint-stock companies, the ability for shareholders to participate remotely, and improved financing options, including allowing limited liability companies to issue debt instruments. These changes have reshaped the corporate landscape by simplifying company formation and offering flexible financing avenues.
The law also encourages broader ownership by easing the purchase of shares and equity stakes. Notably, it introduces a simplified joint-stock company model and includes provisions for non-profit organizations. Other reforms include allowing sole proprietorships to transition into any company type, modernizing rules for corporate mergers and transformations, and permitting company splits.
Small and micro enterprises are exempt from the requirement of an external auditor, reducing their compliance burdens. Additionally, the law enhances digital services, enabling remote shareholder meetings and decision-making, and removes restrictions across all stages of company formation, operation, and exit.
The reforms also introduce a family charter to govern family-owned businesses and simplify the process for foreign companies to operate in the Kingdom, creating a more flexible and investor-friendly environment.
In its September report, the International Monetary Fund praised the reforms for improving access to financing, reducing fees, and strengthening governance, which has helped attract record levels of foreign investment. The IMF also noted that the reforms have contributed to the growth of non-oil sectors and increased employment.
The IMF further highlighted that the rise in non-oil revenues underscores the effectiveness of these reforms, which have also led to better compliance and alignment of customs procedures with international best practices.
In addition, in September, Saudi Arabia approved new laws related to commercial registration and trade names, further streamlining business operations and improving the overall business environment.
These changes were approved at a Cabinet session in Riyadh on Sept. 17, chaired by Crown Prince Mohammed bin Salman.
Saudi Arabia’s refined crude exports hit 23-month high at 1.54m bpd
RIYADH: Saudi Arabia’s refinery crude exports surged 23 percent in September compared to the previous month, to reach 1.54 million barrels per day – the highest level for almost two years.
According to figures from the Joint Organizations Data Initiative, the increase to a 23-month high was fueled by strong demand for refined products, including diesel, motor gasoline, aviation gasoline, and fuel oil.
Diesel led the export mix, accounting for 47 percent of shipments, with volumes rising 35 percent month on month to 727,000 bpd. Motor and aviation gasoline made up 23 percent of exports, while fuel oil contributed 7 percent.
Refinery output in Saudi Arabia remained steady at 2.76 million bpd, with diesel representing 44 percent of refined products, followed by motor and aviation gasoline at 25 percent, and fuel oil at 17 percent.
Crude oil exports rose modestly by 1.41 percent to 5.75 million bpd, while production edged down by 0.19 percent to 8.97 million bpd.
Despite the rise in exports, domestic petroleum demand dropped sharply by 267,000 bpd to 2.62 million bpd, possibly due to seasonal factors and improved efficiency.
OPEC announced in November that eight key OPEC+ nations, including Saudi Arabia, Russia, and Iraq, have agreed to extend voluntary production cuts of 2.2 million bpd through December.
Initially introduced in 2023 to stabilize the oil market, the cuts reflect the group’s commitment to the Declaration of Cooperation, with plans to offset overproduction by September 2025. Iraq, along with Russia and Kazakhstan, reaffirmed adherence to the agreement and compensation schedules earlier this month.
Direct crude usage
Saudi Arabia’s direct crude oil burn dropped significantly in September, falling by 296,000 bpd compared to August to 518,000 bpd — a 36.4 percent decline and the lowest level in five months.
This decline is largely attributed to seasonal temperature changes, as the weather begins to cool from the peak summer heat, reducing the demand for air conditioning and, consequently, the need for crude oil in power generation.
Compared to September last year, the lower burn levels also reflect the Kingdom’s ongoing efforts to enhance energy efficiency and diversify its power sources.
By expanding its natural gas network and scaling up renewable energy projects, the Kingdom is reducing its reliance on crude oil for electricity generation, aligning with its Vision 2030 strategy for a sustainable and diversified energy mix.
More than 70 Saudi firms travel to Poland, Slovakia to boost trade ties
JEDDAH: Representatives from 72 Saudi firms are part of a group visiting Poland and Slovakia in a bid to increase trade with the European countries.
Delegates from Federation of Saudi Chambers are also part of the trip, which will see high-level economic meetings involving senior government officials and private sector representatives. Their objective is to explore investment opportunities and sign several agreements and commercial partnerships.
The delegation, led by Chairman of the Federation of Saudi Chambers Hassan bin Mujib Al-Huwaizi, includes over 72 business representatives from various economic sectors, along with governmental entities and authorities, according to the Saudi Press Agency.
In August, the Kingdom and Poland established a joint business council for the 2024-2028 term to boost trade and investment between the two countries. The move is part of the nation’s broader strategy to deepen economic ties with Europe, with a particular focus on Poland, one of the continent’s largest economies.
Poland has seen impressive growth in its agri-food sector, with exports reaching a record €47.9 billion ($51.1 billion) in 2023 — a €10 billion increase from the previous year.
In 2023, Saudi Arabia’s trade exchange with Poland reached SR33.7 billion. The Kingdom’s primary exports to Poland include mineral products and plastics, while Poland’s main exports to the Arab country consist of tobacco, machinery, and mechanical appliances.
The relationship between Saudi Arabia and Slovakia has also witnessed growth following the official opening of the Slovak Embassy in Riyadh in recent years. Additionally, bilateral trade has increased significantly, highlighting untapped investment opportunities.
The delegation will begin its visit to Poland by holding the Saudi-Polish Business Council meeting, a joint forum, and bilateral meetings between representatives.
In Slovakia, the delegation will host the Saudi-Slovak Business Forum, conduct meetings between companies from both sides and sign an agreement to establish a joint business council.
Through its recent series of international visits to ten countries, the federation is leading efforts to open new markets and opportunities for the Kingdom’s backers and to boost trade and investment exchanges with countries worldwide, in alignment with the aspirations of Saudi Vision 2030.
Blatco, Golden Star Rubber to build Middle East’s largest tire plant in Saudi Arabia
JEDDAH: Saudi Arabia’s Black Arrow Tire Co., or Blatco, has partnered with Thailand’s Golden Star Rubber Co. to build the Middle East’s largest tire manufacturing facility in Yanbu, with a $470 million investment.
The plant will initially produce 4 million tires annually for passenger vehicles, with plans to expand production to 6 million tires per year, including truck and bus tires.
The Yanbu facility is set to boost Saudi Arabia’s industrial capabilities and will create more than 2,000 local jobs. The partnership will supply the facility with the natural rubber required for tire production in the Kingdom.
The Saudi tire market, which produced 22.6 million units in 2023, is projected to grow at a compound annual growth rate of 1.26 percent, reaching 25.5 million units by 2032, according to market research firm IMARC Group.
Largely import-driven, the sector is dominated by Chinese tire brands due to their affordability and availability. However, flagship brands have gained traction in recent years, thanks to their higher quality and longer product lifecycles, the report added.
The ceremony to mark the deal, signed by Blatco Chairman Abdullah Al-Wahibi and Golden Star Rubber Chairman Amir Zafar, was also attended by Hassan Al-Huwaizi, president of the Federation of Saudi Chambers of Commerce, Al-Ekhbariya reported.
The agreement aligns with Vision 2030’s goals to localize industries, transfer knowledge, and support domestic content. The partnership is also supported by the Saudi-Thai Business Council, aimed at strengthening commercial and investment ties between Saudi Arabia and Thailand.
The plant will be situated in the Kingdom’s industrial city on the Red Sea, under the Royal Commission for Jubail and Yanbu. Blatco officials anticipate that 50 percent of production will be consumed locally, with the remainder to be exported to regional markets.
Earlier this year, Blatco signed a 20-year technology export agreement with South Korea’s Kumho Tire. As part of the deal, Kumho Tire agreed to supply Blatco with the technology to produce passenger car tires for the Middle East, including Saudi Arabia.
Founded in Riyadh in 2019, Blatco aims to become a key player in automotive manufacturing and distribution in the region. The company focuses on contributing to Saudi Arabia’s economy, creating jobs, and supporting technology transfer initiatives, according to its website.
In October 2023, the Kingdom’s Public Investment Fund announced a separate $550 million tire factory in a joint venture with Italy’s Pirelli.
PIF holds a 75 percent stake in the venture, with Pirelli providing technology and commercial support. The facility, set to begin operations in 2026, will produce tires for passenger vehicles under the Pirelli brand and a new local brand for domestic and regional markets.
