Tuesday, 12 August 2014

U.S. job openings at their highest level in over a decade


Job openings in June reached the highest number in 13 years, while hiring showed levels not seen since early 2008, according to a Bureau of Labor Statics report released Tuesday.


The report came about a month after another BLS report showed that unemployment dipped to 6.1 percent in June – the best rate since September 2008 – suggesting that the American economy is distancing itself from the great recession.


“The economy is definitely starting to gain some steam,” said Jordan Levine, the director of economic research at Beacon Economics, a California consulting firm.


There were 4.67 million job openings in June, up more than 750,000 over June 2013. The last time there were that many openings was in April 2001, although the months in 2007 and 2006 were consistently close to this year’s high.


Hiring also increased from a year ago. Over 4.8 million people were hired in June, compared with about 4.4 million at the same time last year. These are the best hiring figures since February 2008, when the great recession was in its early stages and Lehman Brothers, the financing giant, was still operating.


“It really is a growth spread across most sectors, including some of the higher wage, higher skill sector – like the professional, scientific, technical – to the kind of lower skilled, lower waged jobs in things like retail and trade,” Levine said.


Most sectors have hired and offered more jobs in June from a year ago, the report shows. However, the construction industry still lags. In June 2013 there were about 131,000 jobs openings in construction. This June the number dropped to 127,000. Hiring follows a similar trend


“A year ago today we probably had 40 employees,” said Wesley Splawn, the vice president of LPC Construction, in Yuma, Ariz., said in a phone interview. “Now we only have about 10.”


Since the market crash of 2008, his company has had to reorganize, he said, and it went from having construction crews to doing mostly project management. Yet Splawn said they now “are seeing a turnaround, a little bit, as far as construction goes.”


Tenant improvements and road work have picked up, he said, noting that new construction has improved just faintly in Yuma, the county with the highest unemployment in the nation.


“The big picture I see in this report is that the labor market is recovering really slowly,” said Robert Blecker, a professor of economics at American University in Washington. He noted that “the overall numbers are still just creeping along” and the government isn’t doing much hiring.


“We ought to be hiring more people in the public sector,” said Blecker, who thinks that heavy government budget cuts have taken a toll on economic growth.


Levine, meanwhile, thinks that to finally move on from the greatest recession of this generation, construction needs to pick up. However, the country’s trade deficit needs to improve, as well, he said.


“The global economy hasn’t rebounded as strongly as we’ve seen in the U.S., and that means our exports haven’t grown as much as what we’d like to see,” he said.



Russia food ban hurts Moldova, bad omen for others


Farmer Sergiu Calmac watches as row upon row of juicy red apples once destined for Russia ripen, fall to the ground and start to rot.


Two weeks before Russia banned most food from the West, it placed a similar embargo on produce closer to home in Moldova, a small Eastern European country seeking deeper ties with the European Union.


Farmers here in one of the poorest corners of Europe are already feeling the pain, with some deciding not to harvest some of their fruit and vegetables at all this season. Calmac's predicament is one that farmers across Europe and beyond can expect to some degree after Russia expanded the circle of countries targeted by its food embargoes.


"A weaker person than me would lose his mind, seeing how his work and investment are being lost," said Calmac, a 60-year-old who has farmed for 26 years. "I have never had a situation like this."


In late July Russia banned foods from Moldova and Ukraine — both former Soviet republics that the Kremlin wants to keep in its sphere of influence — after they moved to deepen their political and economic ties with the EU. A ban on Polish fruits and vegetables soon followed as Warsaw called for sanctions against Moscow for its aggression in Ukraine. Last week Moscow took things further, banning most food imports from the West in retaliation for sanctions imposed as tensions mount over Ukraine.


The consequences of this geopolitical tit-for-tat are particularly painful in Moldova because it is already one of Europe's poorest countries. The average monthly salary is only $300 (225 euros) and 30 percent of its GDP comes from remittances sent home by the 600,000 Moldovans — from a nation of 4 million — working abroad.


Prime Minister Iurie Leanca criticized the embargo, calling it "a violation of the principles of economic cooperation between Moldova and Russia," and promised some compensation to fruit farmers "within the limits of possibility."


A largely agricultural country, Moldova depends heavily on its trade with Russia. Fruit was its largest export, with 90 percent of its apples sent there before the ban. The lost revenue from apples alone is expected to reach $50 million, or three-quarters of a percent of GDP. And while the government does not yet have an estimate for the overall loss, the situation will certainly be worse once other produce is factored in.


Amid the political tensions, Russia has also hinted that some 300,000 Moldovan workers in Russia may no longer be welcome.


The disruptions to Moldova's economy also come at an extremely delicate time politically. Moldova has a pro-Russian separatist break-away region, Trans-Dniester, that longs to be united with Russia and which has put its army on alert amid the tensions in Ukraine.


The country also faces elections in November expected to determine whether it stays on its pro-Western course or if politicians friendlier to Moscow take over. Wedged between EU member Romania and Ukraine, Moldova has an electorate deeply divided over whether to grow more aligned with the West or Russia. If voters blame their pro-Western government for any new economic pain, that could shift the balance with lasting consequences.


"Should the economic effects be felt in Moldova with this embargo, not only would pro-Moscow parties use this to their advantage to try to keep Moldova in Moscow's orbit, but it would also have the effect of derailing or delaying Moldova's aspirations to be part of the European Union," said Stephen Nix, the director of the Eurasia program with the International Republican Institute, a pro-democracy organization based in Washington.


In an interview at his sprawling orchard in Harbovat, a village in southern Moldova, Calmac had only vague criticism for the country's leaders.


"I realize that international relations in our region are complicated but the government could have put more effort into this," he said.


Instead, he is most concerned about how he will pay his 200 employees and repay 4 million Moldovan lei ($290,000) that he owes to pesticide companies. He is hoping the companies will allow him to postpone his payments because repaying them on time seems unrealistic given the new market prices. Moldovan apples usually sell for $0.50 a kilogram. Now he stands to earn only $0.04 a kilogram from the juice-making factories that have become his only buyer. He expects to lose 3.5 million lei ($255,000), which was 75 percent of his 2013 profit.


Calmac, also the head of a local agricultural cooperative, said matters would be even worse had its members not worked to diversify their production beyond just fruit and vegetables destined for Russia. They also grow cereal and sunflowers and together run a small canning plant where they process green peas and tomato paste.


It's a lesson others in the region have already learned in recent years due to previous bans by Russia at times of political tension.


Lithuania, for instance, reacted to a Russian ban on its food products last year with short-term food donations to charities — and a longer-term drive to enter new markets in China, Australia and Brazil.


Poland, which was also targeted by bans in past years, has worked to secure new markets in Asia and elsewhere.


Still, the ban on its produce is expected to bite — perhaps by as much as 0.6 percent of GDP by the end of the year — given that exported foods and agricultural products to Russia last year were worth $1.6 billion. Much of the focus there has been on apples since Poland is the world's third largest apple exporter, with more than half of its production going to Russia before the ban.


As a result, the Kremlin's embargo has sparked a patriotic outpouring of support for apples, which is turning them into nothing less than a symbol of freedom. Newspapers are calling on Poles to eat more apples, saying that could help partly offset the problem, pushing the agenda with articles on the fruit's many health benefits.


President Bronislaw Komorowski has vowed to drink more Polish cider while his wife shared her recipe for apple pie with one of the tabloids last week. The recipe calls for "two kilograms of Polish apples."



Gera reported from Warsaw, Poland. Associated Press writers Alison Mutler in Bucharest, Romania, Monika Scislowska in Warsaw and Liudas Dapkus in Vilnius, Lithuania, also contributed to this report.


Giving America a Raise: A Progress Report


In this year’s State of the Union address, President Obama called on Congress to raise the minimum wage from $7.25 to $10.10 an hour—a move that would boost the bottom lines of businesses and increase the earnings of 28 million hardworking Americans.


It's a commonsense proposal that Republicans in Congress continue to block—which is why President Obama took action to raise the minimum wage for workers on new federal contracts. And states, cities, and businesses across the country are doing their part, too.


A new White House report released today looks at the progress businesses and communities are making in raising the minimum wage for millions of workers. In fact, since the President first called for a minimum wage increase in 2013, 13 states and the District of Columbia have passed laws to increase their minimum wage, which will benefit about 7 million workers.


The economic evidence is clear: It's time to give America a raise. Find out how many more workers would benefit if Congress would take action to raise the wage:


read more