America’s employers slowed their hiring in September but still added a solid 263,000 jobs — potentially hopeful news that may mean the Federal Reserve’s drive to cool the job market and ease inflation is starting to make progress.

Friday’s government report showed that last month’s job growth was down from 315,000 in August and that the unemployment rate fell from 3.7% to 3.5%, matching a half-century low. Last month’s job gain was the smallest since April 2021.

September’s slightly more moderate pace of hiring may be welcomed by the Fed, which is trying to restrain the economy enough to tame the worst inflation in four decades without causing a recession. Slower job growth would mean less pressure on employers to raise pay and pass those costs on to their customers through price increases — a recipe for high inflation.

Still, the Fed would need to see more sustained evidence that hiring and pay gains are slowing before it would moderate its interest rate hikes as it fights inflation. In September, hourly wages rose 5% from a year earlier — the slowest year-over-year pace since December but still hotter than the Fed would want. The proportion of Americans who either have a job or are looking for one slipped slightly, a disappointment for those hoping that more people would enter the labor force and help ease worker shortages and upward pressure on wages.

Leisure and hospitality companies, including hotels, restaurants and bars, added 83,000 jobs last month. Health care and social assistance employers gained 75,000 jobs, factories 22,000. But governments cut jobs. Retailers, transportation and warehouse companies reduced employment modestly.

The public anxiety that has arisen over high prices and the prospect of a recession is carrying political consequences as President Joe Biden’s Democratic Party struggles to maintain control of Congress in November’s midterm elections.

In its epic battle to rein in inflation, the Fed has raised its benchmark interest rate five times this year. It is aiming to slow economic growth enough to reduce annual price increases back toward its 2% target.

It has a long way to go. In August, one key measure of year-over-year inflation, the consumer price index, amounted to 8.3%. And for now, consumer spending — the primary driver of the U.S. economy — is showing resilience. In August, consumers spent a bit more than in July, a sign that the economy was holding up despite rising borrowing rates, violent swings in the stock market and inflated prices for food, rent and other essentials.

Fed Chair Jerome Powell has warned bluntly that the inflation fight will “bring some pain,” notably in the form of layoffs and higher unemployment. Some economists remain hopeful that despite the persistent inflation pressures, the Fed will still manage to achieve a so-called soft landing: Slowing growth enough to tame inflation, without going so far as to tip the economy into recession.

It’s a notoriously difficult task. And the Fed is trying to accomplish it at a perilous time. The global economy, weakened by food shortages and surging energy prices resulting from Russia’s war against Ukraine, may be on the brink of recession. Kristalina Georgieva, managing director of the International Monetary Fund, warned Thursday that the IMF is downgrading its estimates for world economic growth by $4 trillion through 2026 and that “things are more likely to get worse before it gets better.”

Powell and his colleagues on the Fed’s policymaking committee want to see signs that the abundance of available jobs — there’s currently an average of 1.7 openings for every unemployed American — will steadily decline. Some encouraging news came this week, when the Labor Department reported that job openings fell by 1.1 million in August to 10.1 million, the fewest since June 2021.

Nick Bunker, head of economic research at the Indeed Hiring Lab, suggested that among the items on “the soft-landing flight checklist” is “a decline in job openings without a spike in the unemployment rate, and that’s what we’ve seen the last few months.”

On the other hand, by any standard of history, openings remain extraordinarily high: In records dating to 2000, they had never topped 10 million in a month until last year.

Economist Daniel Zhao of the jobs website Glassdoor argued that a single-minded focus on the job market might be overdone. Regardless of what happens with jobs and wages, Zhao suggested, the Fed’s policymakers won’t likely let up on their rate-hike campaign until they see proof that they’re actually hitting their target.

“They want to see inflation slowing down,” he said.
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Delegates at Africa’s biggest oil conference have expressed concern about rising prices after the Organization of Petroleum Exporting Countries, plus nonmembers who also export oil, decided this week to cut production targets.

The majority of the oil cartel’s 13 member states are in Africa, but many African countries have to import refined oil.

Speaking at the Africa Oil Week conference in Cape Town, Omar Farouk Ibrahim, secretary-general of the African Petroleum Producers Organization, said the move was aimed at ensuring stability in the global market and ensuring that prices don’t fall too low.

“I believe it’s the right thing they did in order to save the industry,” he said, “and I totally think that every country has the responsibility to protect the interests of its citizens. And if by reducing production they see that as in their best interest, so be it.”

Rashid Ali Abdallah, executive director of the African Energy Commission, said it was too early to tell what the impact of the planned cuts would be.

“I hope that the price is not shooting up, because in Africa we depend on oil products in power generation,” he said.

Natacha Massano, vice president of Angola’s National Agency for Petroleum, Gas and Biofuels, said she wasn’t sure how the announcement would affect her country. Angola is one of the two biggest oil producers in Africa; Nigeria is the other, and both are OPEC members.

“Some countries will be affected more than the others,” Massano said. “Some are benefiting — of course, the producers may benefit from the high prices, but at the same time they are paying also for all other commodities.”

Saudi Arabia, OPEC’s biggest producer, has denied colluding with Russia on the production target cut.

However, Herman Wang, managing editor of Vienna-based OPEC and Middle East News, said one couldn’t tell what was discussed behind closed doors. He said he thought the cut was clearly “a big win for Russia.”

“You know that they are trying to raise money for their war effort in Ukraine,” Wang said. “Again, like all these OPEC countries, [Russia is] heavily reliant on oil revenues, and when you have a case where the outlook for the war is quite dire, [Russia is] needing this revenue. And the other impact of this is that higher oil prices make it harder for the West to enforce and impose their sanctions on Russia. So that might have been part of the calculation here for Russia in terms of trying to get this production cut done.”

OPEC+ members said the group would cut production targets by 2 million barrels per day.

U.S. President Joe Biden called the move shortsighted, noting the global economy has been dealing with the negative impact of Russia’s invasion of Ukraine.
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U.S. President Joe Biden expressed his disappointment Thursday that OPEC+ nations intend to cut oil production targets by 2 million barrels a day but said the United States has alternatives and is exploring them.

“There’s a lot of alternatives. We haven’t made up our minds yet,” Biden told reporters at the White House, without elaborating.

Wednesday’s decision by the Organization of Petroleum Exporting Countries, along with Russia and other oil producers, to cut production targets could help Moscow fund its war in Ukraine and hurt Biden’s chances to further cut gasoline prices for American motorists ahead of next month’s nationwide congressional elections.

Opposition Republicans have blamed Biden and fellow Democrats for the higher gas prices as they try to wrest control from Democrats of one or both chambers of Congress.

In a July trip to the Mideast, Biden had pushed Saudi Arabia, the world’s second-biggest oil producer after the U.S., to hold the line against a production cut or even boost output to the global crude oil market to keep oil prices, which directly correlate to the price motorists pay for gasoline at service stations, from increasing.

Biden said, however, that he did not regret his stopover in Riyadh to meet with Saudi leaders.

“The trip was about the Middle East and about Israel and … rationalization of positions,” he said, while acknowledging the OPEC+ production cut “is a disappointment.”

Biden made the trip to Saudi Arabia even though during his presidential campaign in 2020 he branded the longtime U.S. ally as a “pariah” state for its role in the killing and dismemberment of dissident journalist Jamal Khashoggi, a Washington Post columnist, at the hands of Saudi agents in the country’s Istanbul Consulate in 2018.

One of Biden’s key congressional allies, Senator Dick Durbin of Illinois, voiced a more critical view of Saudi Arabia than Biden in the immediate aftermath of the oil production target cut.

“From unanswered questions about 9/11 & the murder of Jamal Khashoggi, to conspiring w/ Putin to punish the US w/higher oil prices, the royal Saudi family has never been a trustworthy ally of our nation,” Durbin said on Twitter. “It’s time for our foreign policy to imagine a world without their alliance.”

Durbin’s 9/11 reference was to the 2001 al-Qaida terrorist attacks on the U.S. that killed nearly 3,000 people. Fifteen of the 19 airline hijackers who carried out the attacks were Saudi nationals.

Three Democratic members of the House of Representatives, Tom Malinowski, Sean Casten and Susan Wild, called for an end to U.S. troop protection of Persian Gulf allies.

“If Saudi Arabia and the UAE want to help [Russian President Vladimir] Putin keep oil prices high, they should look to him for their defense,” the three lawmakers said.

Despite Biden’s diplomatic overtures in recent months to Saudi Arabia and the United Arab Emirates, they said, “they have now answered … with a slap in the face that will hurt American consumers and undermine our national interests.”

The OPEC+ coalition of 23 nations said the production cut, from 43.8 million barrels a day to 41.8 million, would take effect in November. It is the first time OPEC has cut oil production targets since the beginning of the coronavirus pandemic in March 2020, although the coalition of oil-producing countries has been undershooting its target by 3 million barrels a day this year.

With the production cut, the oil producers are hoping to curb the drop in world crude prices, which surged past $100 a barrel earlier this year but had fallen 32% in the last four months before increasing again in recent days in anticipation of the OPEC announcement.

With the drop in the price of crude over the summer months, gasoline station pump prices fell in the U.S., which in turn boosted Biden’s job approval rating as the country heads to the nationwide congressional elections on November 8.

A year ago in the U.S., gas prices averaged $3.20 a gallon (3.78 liters), and in some states fell to nearly that low in recent months. But now, with crude oil prices rising again, the national average is at $3.87 a gallon, according to the American Automobile Association.

While U.S. motorists are pinched by higher gas costs, Russia relies on gas and oil sales for a large portion of its budget to help fund its war in Ukraine. It supported the production cut, which will enable Moscow to sell oil for higher prices on the global market.
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Growth in global trade flows will be dramatically lower than expected in 2023, according to a report issued Wednesday by the World Trade Organization, as Russia’s invasion of Ukraine and global central banks’ efforts to fight inflation continue to take a toll.

The WTO projected that after expanding at a 3.5% pace in 2022, growth in the trade of goods in 2023 will plunge to just 1%. That’s considerably below the agency’s most recent estimate from April, which had trade expanding at a 3.4% clip next year.

WTO analysts cited various causes for the expected slowdown. Among other things, the increase in the price of energy, staple foods, fertilizer and other goods brought on by the war in Ukraine will continue reducing consumer spending on other items. Additionally, interest rate hikes in the United States and other advanced economies are expected to constrain consumers further, while China’s continuing struggle to manage COVID-19 has created ongoing production problems.

“Policymakers are confronted with unenviable choices as they try to find an optimal balance among tackling inflation, maintaining full employment and advancing important policy goals such as transitioning to clean energy,” WTO Director General Ngozi Okonjo-Iweala said in a statement.

‘No surprise’

Jake Colvin, president of the National Foreign Trade Council, told VOA that even without the geopolitical shock of Russia’s invasion of Ukraine and problems with the global supply chain arising from the COVID-19 pandemic, there were other factors that made a slowdown in trade growth likely.

“It’s no surprise that while the party was raging for the global economy in the wake of COVID lockdowns, that the inflation hangover is real,” Colvin said. “There’s likely to be downward pressure on global trade for the foreseeable future, as this report points out, because of persistently high inflation, as well as ongoing supply chain challenges.”

Colvin pointed out that the recent surge in the strength of the U.S. dollar against other global currencies would also complicate trade issues.

“The world is grappling with the strength of the U.S. dollar,” he said. “Obviously, a strong U.S. dollar is good for U.S. consumers. It makes imports less expensive. But it makes U.S. exports more expensive. So, a strong U.S. dollar is always a headwind for American exporters. And it also is a challenge for countries around the world that have to buy things in dollars, including energy.”

Growth projections vary

The 2023 growth rates for North America and Asia are expected to be slightly above the global trend, at 1.4% and 1.1%. However, they will be significantly lower than in 2022. The WTO projects that North America will end this year with a 3.4% growth in trade, while Asia will experience 2.9% growth.

Regions projected to have positive but below average growth in 2023 include Europe at 0.8% and South America at 0.3%. That compares with projected full-year 2022 growth of 1.8% for Europe and 1.6% for South America.

Regions that can expect negative growth are Africa at -1.0% and the Middle East at -1.5%. However, both are expected to end 2022 with annual growth much higher than the global average, with Africa at 6.0% and the Middle East at 14.6%.

The seventh region in the assessment is the Commonwealth of Independent States (CIS), a free trade bloc made up primarily of former satellite states of the Soviet Union and dominated by Russia. The data indicate that the CIS will see growth of 3.3% next year. However, the report said, that apparent growth will reflect only a partial recovery from the sharp -5.8% slowdown in trade growth the bloc is projected to have suffered by the end of 2022.

China’s challenges

The decline in forecast growth for Asia is driven in large part by China, which is experiencing reversals in imports and exports. This is the result of a combination of factors, but the most notable among them is COVID-19.

“The zero-COVID policy that President Xi [Jinping] has been pursuing … really put the squeeze on the Chinese economy,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, told VOA. “Production is not there for what could be many export orders. Sometimes the ports are just not functioning as they normally do, so that really has hit the exports.”

He continued, “At the same time, China is a big importer, from [around] the world, and especially from many developing countries, which send a combination of raw materials and intermediate products to China, which are then made into finished products. … So China’s imports have been pretty slow lately, and this is hurting all its trading partners around the world.”

Spillover effects

In addition to a slowdown in orders from China, countries in the developing world are likely to see fewer orders for their goods from the U.S. and Europe than they have in the past, due in part to consumers being constrained by inflation and high interest rates.

Developing countries are facing the pernicious combination of lower revenues from exports, higher energy and fertilizer prices, and disruption in the global food supply. Added to that is the rising value of the U.S. dollar, which many developing countries need to purchase in order to transact business internationally.

A major concern, according to the WTO, is that this “could lead to food insecurity and debt distress in developing countries.”

Warning on restrictions

Okonjo-Iweala warned countries against reacting to Wednesday’s report by imposing export bans and taking other restrictive trade measures.

“While trade restrictions may be a tempting response to the supply vulnerabilities that have been exposed by the shocks of the past two years, a retrenchment of global supply chains would only deepen inflationary pressures, leading to slower economic growth and reduced living standards over time,” Okonjo-Iweala said.

“What we need is a deeper, more diversified and less concentrated base for producing goods and services,” she added. “In addition to boosting economic growth, this would contribute to supply resilience and long-term price stability by mitigating exposure to extreme weather events and other localized disruptions.”
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The Organization of Petroleum Exporting Countries, along with Russia and other oil producers, on Wednesday slashed production by 2 million barrels a day, an action that could help Moscow pay for its war with Ukraine and hurt U.S. President Joe Biden’s chances to further cut gasoline prices for American motorists.

The production cut was seen as a rebuke to Biden, who visited Saudi Arabia in July in what now has turned out to be a futile effort to persuade the world’s second-biggest oil producer after the United States to refrain from cutting production.

White House officials assailed the decision in Vienna by the 23 countries that belong to the OPEC+ coalition, which analysts say could increase the risk of a global recession in the coming months. Crude oil prices had been falling for months on the world market but had risen in recent days in anticipation of the OPEC production cut.

White House national security adviser Jake Sullivan and National Economic Council director Brian Deese said in a statement that the president “is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of [Russian President Vladimir] Putin’s invasion of Ukraine.

“At a time when maintaining a global supply of energy is of paramount importance,” Sullivan and Deese said, “this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices.”

Effective in November

The OPEC+ coalition said the production cut, from 43.8 million barrels a day to 41.8 million, would take effect in November. It is the first time OPEC has cut oil production targets since the beginning of the coronavirus pandemic in March 2020, although the coalition has been undershooting its target by 3 million barrels a day this year.

Because of the underproduction of the oil-producing countries, White House national security spokesman John Kirby played down the new OPEC+ agreement.

“So, in some ways, this announced decrease really just kind of gets them back into more aligned with the actual production,” he said.

Even so, the oil producers are hoping to curb the drop in world crude prices, which surged past $100 a barrel earlier this year but had fallen 32% in the last four months before increasing to more $93 a barrel on Wednesday after the OPEC announcement.

With the drop in the price of crude over the summer months, gasoline station pump prices fell in the U.S., which in turn boosted Biden’s job approval rating as the country heads to nationwide congressional elections next month.

A year ago in the U.S., gas station prices averaged $3.20 a gallon (3.78 liters) and in some states fell to near that low in recent months. But now, with crude oil prices on the rise again, the national average is at $3.83 a gallon, according to the American Automobile Association.

With Biden’s Democratic Party holding narrow control of both the House of Representatives and the Senate, and some pollsters predicting a Republican takeover of the House and possibly the Senate, White House officials are concerned about any increase in gasoline pump prices being blamed on Democrats, giving Republicans an electoral boost.

In addition, Russia relies on gas and oil sales for a large portion of its budget to help fund its war in Ukraine. It supported the production cut, which will enable Moscow to sell oil for higher prices on the global market.
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