First-time claims for U.S. unemployment compensation edged higher again last week, the Labor Department reported Thursday, as the delta variant of the coronavirus continues to play havoc with the world’s largest economy.

A total of 362,000 jobless workers filed for assistance, up 11,000 from the revised figure of the week before, the third straight week the figure moved higher. The increase last week was at odds with projections of economists, who had predicted a declining number.

Still, the claims figures for the last month have been on the whole the lowest since the pandemic swept through the U.S. in March 2020, although they remain well above the 218,000 average in 2019.

The increase in unemployment compensation claims comes as the U.S. government in early September ended extra $300-a-week payments to jobless workers on top of often less generous state benefits.

The jobless claims total has fallen steadily but unevenly since topping 900,000 in early January. Filings for unemployment compensation have often been seen as a current reading of the country’s economic health, but other statistics are also relevant barometers.

Even as the U.S. said last month that its world-leading economy grew by an annualized rate of 6.6% in the April-to-June period, in August it only added a disappointing 235,000 jobs, a figure economists said was partly reflective of the surging delta variant of the coronavirus inhibiting job growth. The September jobs figure is due out in a week.

The August total was down sharply from the more than 2 million combined figure added in June and July. The unemployment rate dipped to 5.2%, which is still nearly two percentage points higher than before the pandemic started in March 2020.

About 8.7 million workers remain unemployed in the U.S. There are nearly 11 million available jobs in the country, but the skills of the available workers often do not match what employers want, or the job openings are not where the unemployed live.

The size of the U.S. economy – nearly $23 trillion – now exceeds its pre-pandemic level as it recovers faster than many economists had predicted during the worst of the business closings more than a year ago. Policy makers at the Federal Reserve, the country’s central bank, have signaled that in November they could start reversing the bank’s pandemic stimulus programs and next year could begin to increase its benchmark interest rate.

How fast the U.S. economic growth continues is unclear, with the delta variant of the coronavirus posing a threat to the recovery. In recent weeks, about 120,000 or more new cases have been identified each day in the U.S. and on some days more than 2,000 people have been dying from COVID-19.  

Political disputes have erupted in numerous states between conservative Republican governors who have resisted imposing mandatory face mask and vaccination rules in their states at schools and businesses, although some education and municipal leaders are advocating tougher rules to try to prevent the spread of the delta variant.

U.S. President Joe Biden has ordered workers at companies with 100 or more employees to get vaccinated or be tested weekly for the coronavirus. In addition, he is requiring 2.5 million national government workers and contractors who work for the government to get vaccinated if they haven’t already been inoculated.

Many companies imposed their own vaccination mandates before Biden acted and are now starting to fire workers who have balked at getting vaccinated.

Nearly 67% of U.S. adults have now been fully vaccinated against the coronavirus, and overall, 55.5% of the U.S. population of 332 million, according to the Centers for Disease Control and Prevention.

 
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В уряді запевняють, що тарифи на електроенергію «гарантовано будуть незмінними» протягом всього опалювального сезону
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Кулеба закликав бізнес надалі розвивати культуру експортера та конструктивно співпрацювати з дипломатами
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Український фонд стартапів виділив 10 грантів на участь компаній у саміті
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U.S. lawmakers have less than three weeks to avert a default on the country’s sovereign debt by raising the limit on the amount of money the Treasury Department can borrow. Failure to do so would result in the United States purposely defaulting on its debts for the first time in history. 

By now, the extent of the damage that economists predict the U.S. economy would suffer in the event of default triggered by bitter conflict between Congressional Democrats and Republicans has been widely reported.

An estimate from Moody’s Analytics earlier this month predicted that in a prolonged default scenario, the U.S. would slide into recession, with the Gross Domestic Product falling by almost 4%. Some six million jobs would be lost, driving the unemployment rate up to 9%. The resulting stock market sell-off would erase $15 trillion in household wealth. In the short term, interest rates would spike, and in the long term, they would never fall back to pre-default lows. 

But the damage from a U.S. default would not be contained to the United States itself. Securities issued by the U.S. have been so trustworthy for so long that they are treated as essentially risk-free in financial markets, and are used to underpin a vast number of financial contracts worldwide. 

“The U.S. Treasury market is the world’s anchor asset,” said Jacob Kirkegaard, a senior fellow with the Peterson Institute for International Economics. “If it turns out that that asset is not actually risk free, but that it can actually default, that would basically detonate a bomb in the middle of the global financial system. And that will be extremely messy.” 

Immediate fallout 

In the event of a default, it is generally assumed that there would be a broad sell-off of Treasury securities, known as Treasuries. This would happen for multiple reasons — from individual investors being spooked by the default, to companies that had collateralized loans with Treasuries being forced to replace them with something the lender sees as more secure. 

The sell-off would make it more expensive for the U.S. to borrow in the future, driving up interest rates in the United States and driving down the value of the dollar against other world currencies. 

Here are five ways those effects would echo through the global economy. 

Reduced global trade 

If a default drove the U.S. into recession, U.S. consumers and businesses would reduce the amount of goods and services they purchase from outside the country. 

While this would impact virtually all countries to some extent, emerging market countries that rely on exports to the United States for much of their income would be particularly hard-hit. 

The expected devaluation of the dollar would have a similar impact — making it more expensive for U.S firms to purchase supplies overseas, resulting in trade being reduced even further. 

Dollarized economies would suffer 

The U.S. dollar is a common currency in much of the world. Some countries have adopted it as the official currency, while in others it exists side-by-side with a local currency that is often “pegged” to the dollar to keep its value stable. 

In the event that a default drove down the value of the dollar, countries with highly dollarized economies would see the buying power of existing currency stock diminished.

“Emerging markets would suffer greatly from this, because they wouldn’t have a domestic currency that’s very credible,” said Kirkegaard. 

Business contracts affected 

Around the world, many cross-border transactions carry requirements that they be settled in U.S. dollars. In ordinary times, this is seen as a practical way to be sure that sudden swings in the value of a local currency don’t dramatically disadvantage one party in a transaction that is to be settled in the future. 

A sudden and sharp decline in the value of the dollar would mean that individuals and companies anticipating payment on existing contracts in dollars would effectively be receiving less than they had expected for their goods and services. 

More sophisticated trade contracts may contain anti-default clauses that require agreements to be renegotiated in the event of a default that drives down the value of a reserve currency. While this would keep both parties to a contract whole, it would also complicate and likely slow down many transactions. 

Capital flows away from the U.S. 

One of the economic advantages the United States has long enjoyed is that it is a magnet for global capital. When the global economy is strong, investors seeking growth funnel money to U.S. firms. When times are bad, investors seek shelter in U.S. Treasuries. Either way, global markets are directing capital into the U.S. 

But when interest rates go up for the wrong reason — because investors don’t trust the U.S. government to pay its debts — that system is broken. 

The result is that to some degree, investors seeking shelter would be more cautious about assuming that Treasury securities are the go-to investment to protect the value of their assets. The logical move would be for them to begin directing at least some of their investments to securities issued by other governments and denominated in different currencies. 

New reserve currency 

A side effect of those new capital flows could be a challenge to the dollar as the world’s “reserve currency.” 

A reserve currency is money held by a country’s central bank and large financial institutions in order to facilitate global trade for domestic companies, to meet international debt obligations, and to influence domestic currency exchange rates, among other reasons. 

The stability of the dollar has made it the dominant global reserve currency since the end of World War II. This has generated constant global demand for dollars, making it possible for the U.S. government to borrow at lower interest rates than other large nations.

The United States’ global competitors, including China and Russia — but even allies, like the European Union — have for years suggested that it would be better if the dollar’s dominance were not as complete as it is. 

There has been little movement to unseat the dollar in recent decades, but a shock like a default on U.S. debts could persuade some countries to hedge their bets by taking on other currencies, like the euro or renminbi, as additions to their reserve holdings. 

“If you are China or, for that matter, the euro area, you have been wanting to replace or supplant the dollar’s dominant role in the global economy with either the renminbi or the euro,” said Kirkegaard. “You couldn’t ask for a better thing.” 

 
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The U.S. Commerce Department on Wednesday asked a group of anonymous domestic solar manufacturers for additional information before it would consider a request to impose duties on panels produced in three Southeast Asian countries.

The move delays the department’s decision, which had been expected this week. The case is the latest dispute between the U.S. solar project builders that rely on cheap imports for most of their supplies and the tiny domestic manufacturing sector that says it can’t compete effectively with the flood of low-priced imports from Asia.

U.S. solar project developers have lobbied forcefully against any Commerce investigation into new tariffs, saying the probe alone would spook the foreign solar producers they rely on and cripple a sector that is critical to meeting the nation’s climate change goals.

The anonymous group seeking the tariffs last month asked the Commerce Department to investigate whether imports from Malaysia, Thailand and Vietnam were unfair. It accuses Chinese producers of shifting manufacturing to those nations to avoid U.S. duties on solar cells and panels made in China.

On Wednesday, the Commerce Department sent the group’s attorney, Timothy Brightbill, a letter that set an Oct. 6 deadline for the so-called American Solar Manufacturers Against Chinese Circumvention to respond to a series of questions.

One question asks members of the group to identify themselves. The group said in filings with Commerce that its members wished to remain anonymous because they feared retribution in the marketplace, a claim the department has also asked it to explain.

The department said it would issue a decision within 45 days of receiving a response.

Brightbill did not immediately respond to a request for comment.

The U.S. Solar Energy Industries Association, the trade group that opposes the tariff request, said that it was disappointed the department did not dismiss the group’s petition outright, but that the additional information would show that the petitioners “have no case.” 

 
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China is the world’s largest seafood consumer, and its fleet often fishes waters claimed by South Korea. When South Korean authorities try to enforce international regulations, they often meet fierce resistance. Seung Hyuk Park filed this report with information provided by Hyungjin Kim in Seoul.
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A Malawi Magistrate’s Court in the capital, Lilongwe, has sentenced a Chinese national, described by some as one of the biggest African wildlife trafficking kingpins, to 32 years in prison after convicting him on three wildlife crimes. The court, however, said the sentences will run concurrently for 14 years and then there is a plan to deport him. But the convict is looking to appeal the sentence.

Judge Justice Violet Chipao on Tuesday sentenced Lin Yunhua to 14 years in prison for trading in rhino horn, 14 years for possession of rhino horn and an additional six years for money laundering. Justice Chipao however said the sentences will run concurrently, meaning that Lin will serve a total of 14 years. 

Lin, a Chinese national and the leader of wildlife trafficking syndicate Lin-Zhang gang — named after the husband-and-wife leaders — has been operating out of Malawi for at least a decade. Malawi’s authorities arrested him in August 2019 following a three-month manhunt. 

Prosecution lawyer, Andy Kaonga says Lin would face another punishment after completing the sentence. 

“Once he serves the sentence, our colleagues at the DPP [Director of Public Prosecution] office will probably take it to the minister of homeland security and then start the process of his deportation because the court has recommended that he should be deported from the country,” he said.  

The sentencing of Lin brings the number of wildlife trafficking syndicate members sent to prison to 14. These include four Malawian and 10 Chinese nationals, including Lin’s wife currently serving an 11-year prison term. Lin’s daughter was also arrested in December 2020 for alleged money laundering offences. Her trial is ongoing. 

Brighton Kumchedwa, Malawi’s director of the Department of National Parks & Wildlife, warned that the crackdown on members of the Lin-Zhang gang should send a message to other wildlife trafficking syndicates. 

“We are now starting to deal with the sponsors, the king pins. My message to these syndicates is ‘they should watch out; Malawi is not a playing ground. We eventually will get to them. So, they better stop,” he said.

Kumchedwa says the crackdown is a result of new strategies the government put in place toward combating wildlife crimes. 

“From 2015 thereabout we changed completely the game of handling wildlife crimes. So, we used [our] own intelligence combined with police intelligence. We also used sniffer dogs in the process. So, it’s different strategies that have seen us going this far,” he said. 

Mary Rice is the executive director of the London-based Environmental Investigation Agency (EIA), an organization campaigning against environmental crimes and abuse. Speaking to VOA via a messaging app from London, Rice says the crackdown shows Malawi’s commitment to bring high-level wildlife criminals to justice,

“It was not an easy road. But the tenacity and resilience of the investigators, the lawyers and the judge who made some very, very interesting comments in the sentencing, they are all to be applauded for their work. We know there have been many, many obstacles along the way. So, I think it’s a great result,” she said.

Defense lawyer Chrispine Ndalama told VOA Tuesday his client is considering appealing against the sentence. 

“Of course, over the phone, the client indicated that he would want to appeal but I will have to look at the judgment first, to see and understand the reasoning of the court so that I can advise my client properly as to whether we need to appeal or not,” he said.

Ndalama says he expected the court to give Lin a lesser sentence because he pleaded guilty to charges of possession of wildlife products. 

The court has given the defense 30 days to appeal the sentence. 
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У НКРЕКП зазначили, що на необхідності продовжити заборону на засіданні Антикризового енергетичного штабу 27 вересня наголосили представники Кабінету міністрів та Міністерства енергетики
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«Виключення України з системи транзиту газу в цій угоду було ключовою вимогою російської сторони і на цю вимогу угорська сторона пристала», – вважають у МЗС
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Tight global energy supplies pushed oil prices above $80 a barrel for the first time in three years on Tuesday before retreating in a broader selloff in financial markets. Demand rose due to easing lockdown measures and wider rollouts of COVID-19 vaccinations, analysts say, as well as disruptions in supply due to hurricanes in the United States. Will OPEC+ increase supplies?

Goldman Sachs expects oil prices for benchmark Brent crude to hit $90 per barrel by the end of the year as supply tightens. The recovery from the impact of delta variant of the coronavirus was faster than expected especially with international travel, it said, while Hurricane Ida hit U.S. production.

Although some analysts find that the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have been slow to raise their oil output to address the shortfalls, others like Carole Nakhle, CEO of Crystol Energy in London, told VOA that there is no real oil supply shortage.

“I struggle to see how we have a shortage of supply when you have OPEC+ sitting on millions of barrels a day of spare capacity. Usually if you look historically when we have serious crises in oil markets and prices going significantly high, that spare capacity was very low. Today that is not the case. So, we have a voluntary decision not to put all that oil in the market and that is contributing to the current tightness. Saudi Arabia, UAE and Kuwait don’t seem to be facing any problem. If they want, they can easily appease the pressure in the market,” said Nakhle.

Neil Quilliam, an associate fellow at London’s Chatham House, told VOA that it is hard to say whether OPEC – which meets next week – will increase production. But he notes that U.S. national security advisor Jake Sullivan met Saudi Crown Prince Mohammed bin Salman earlier this week.

“I would find it really hard to imagine, given where the price of oil is at the moment and that OPEC is meeting next week, that that didn’t inform an important part of the conversation. It’s hard to say, but the signals so far are that they are going to stick to where consumption currently is and keep in alignment with plans to increase production by 400,000 barrels each month until the end,” he said.

Norbert Rucker of the Swiss private bank Julius Baer said that the deficit in world gas supplies is driving the global energy crunch. He told the Wall Street Journal that “this is now spilling over into the oil market because of the expectation that this energy scarcity means we’re going to use oil for spillover demand.” Oil can be used in some power plants to generate electricity when gas prices surge.

Nakhle said gas markets have no such OPEC+ entity. Currently, “Russia is seen to be restricting some of its supplies to Europe to gain more support for its Nord Stream 2 pipeline” and “to take advantage of higher prices, but Russia does not have the same impact on gas prices as you have, for example, with OPEC+ in oil markets,” she said.

Gas prices have risen in part due to a worldwide production deficit, depleted inventories as well China’s turning to gas from coal. Analysts say the energy crisis will worsen if there is a very cold winter ahead in the northern hemisphere. 
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