The US economy registered another month of solid jobs growth in May, despite employers grappling with a historically tight labour market and policymakers’ efforts to cool demand.
Employers in the world’s largest economy added 390,000 jobs during the month, less than the upwardly revised 436,000 positions created during the previous period but more than economists had expected.
The jobless rate steadied at 3.6 per cent, just 0.1 percentage point above the level it stood at in February 2020 before the coronavirus pandemic spread globally.
According to the Bureau of Labor Statistics, leisure and hospitality was among the sectors to see “notable” gains. More than 80,000 positions were added in May, with an additional 75,000 professional and business services jobs created as well. Transportation and warehousing employment rose by 47,000.
The only sector to see losses was retail, with the number of jobs declining by 61,000. Still, total employment for that sector is 159,000 above its February 2020 level.
“This was a very good, goldilocks report that so far is consistent with a soft landing,” said Ellen Gaske, an economist at PGIM Fixed Income. “These jobs gains are coming alongside decelerating average hourly earnings, so that suggests potentially the economic expansion could turn out to be fairly robust.”
Despite these gains, the rapid recovery of the US labour market — which has far outpaced the sluggish bounceback that characterised the post-global financial crisis period — has been overshadowed in large part by the highest inflation in four decades.
With roughly 1.9 vacant positions for every unemployed worker, there are also broad concerns that a prolonged shortfall of people willing to join the labour force will keep upward pressure on prices as employers are forced to continue raising wages and improving benefits in order to attract new hires and keep those already on payroll.
The data, which was released by the Bureau of Labor Statistics on Friday, did show the labour force increasing by 330,000, but the share of Americans either employed or looking for work — otherwise known as the labour-force participation rate — was little changed. Economists believe labour supply issues are starting to ease, however, helping to explain the moderate pick-up in monthly wage growth.
Average hourly earnings in May rose 0.3 per cent, in line with last month’s increase. On an annual basis, that translates to 5.2 per cent, slightly slower than the 5.5 per cent pace registered in April.
“The deceleration in wage growth is encouraging because it suggests that the broader cyclical price pressures in the economy are close to peaking,” said Michael Pearce, senior US economist at Capital Economics.
President Joe Biden has said tackling high inflation is his administration’s top priority, a message he has sought to fortify in recent days. Earlier this week, he met with Jay Powell, chair of the Federal Reserve, and reiterated his support for the US central bank to do what it takes to contain inflation.
In remarks after the report was released on Friday, Biden touted the historic nature of the jobs recovery — with 8.7mn jobs recovered since the beginning of his administration — but acknowledged the toll imposed by rising prices.
“We’ve laid an economic foundation that’s historically strong, and now we’re moving forward to a new moment where we can build on that foundation . . . so we can bring down inflation without sacrificing all the historical gains we’ve made,” he said.
The Fed has already raised interest rates by 0.75 percentage points since March from the near-zero levels that had been in place since the start of the pandemic. That included the first half-point rate rise since May 2000, a tool top officials have indicated will be used repeatedly in quick succession until there is “clear and convincing” evidence that inflation is coming down.
Loretta Mester, president of the Cleveland Fed and a voting member on the policy-setting Federal Open Market Committee this year, on Friday said another half-point rate rise may be appropriate in September, following two such adjustments in June and July, if inflation does not moderate sufficiently — something Lael Brainard, the vice-chair, endorsed on Thursday.
More broadly, Powell and other policymakers have surmised the Fed will be able to tame price pressures without causing a sharp recession, especially given the strength of the labour market and the sheer magnitude of the demand for workers.
As the Fed lifts borrowing costs by raising rates and shrinking its $9tn balance sheet, the hope is that the number of vacancies falls rather than outright job losses mount.
Brian Rose, senior economist at UBS, said he expects the pace of monthly jobs growth to slow soon, perhaps to around 100,000, given uncertainty about just how many more people are left to return to the labour force.
“We can’t sustain the payroll growth at this pace for very much longer,” he said. “We are going to run out of people to come back to work after the pandemic.”
Biden acknowledged as much on Friday, saying the US economy is unlikely to see “blockbuster” reports month after month. “That’s a good thing,” the president said. “That’s a sign of a healthy economy with steady growth, rising wages for working families, everyday costs easing up and shrinking the deficit.”
Given the projected trajectory of the labour market, Rose said the Fed is on track to cool down the economy without causing undue pain. Other economists are less optimistic about the Fed’s ability to pull off a soft landing, however.
One complication is the variation in labour market tightness between states and across industries, which a recent analysis by the Financial Times suggests is substantial.
US government bonds sold off after the report, with the benchmark 10-year note trading 0.06 percentage points higher at 2.97 per cent at one point. Two-year Treasury yields, which are most sensitive to changes in monetary policy, rose by a smaller amount, up 0.03 percentage points to 2.66 per cent.
Original Article: ft.com
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Key Passages From the US Supreme Court on Abortion Rights
The US Supreme Court on Friday struck down Roe vs Wade, the 1973 ruling that guaranteed a constitutional right to abortion, in one of its most consequential decisions on civil rights in years.
The arguments on both sides are lengthy and involved, and the final ruling comprised five separate opinions spanning 213 pages: the opinion of the court, two concurring opinions, an opinion agreeing only with the court’s judgment and a dissenting opinion.
Below are some of the most notable passages from each.
Opinion of the court, written by Samuel Alito
Much of Alito’s majority opinion matched a leaked draft from February 10, which was published by Politico in May.
To begin, Alito argued that the court overstepped when first deciding Roe.
As Justice Byron White aptly put it in his dissent, the [Roe] decision represented the “exercise of raw judicial power”, and it sparked a national controversy that has embittered our political culture for a half-century.
He argued that the case was wrongly decided, and poked at its reasoning. (He also cited Planned Parenthood vs Casey, another abortion case that affirmed Roe.)
Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences. And far from bringing about a national settlement of the abortion issue, Roe and Casey have enflamed debate and deepened division.
Alito argued that there is no right to an abortion rooted in American “history and tradition”.
We hold that Roe and Casey must be overruled. The constitution makes no reference to abortion, and no such right is implicitly protected by any constitutional provision, including the one on which the defenders of Roe and Casey now chiefly rely — the Due Process Clause of the Fourteenth Amendment. That provision has been held to guarantee some rights that are not mentioned in the constitution, but any such right must be “deeply rooted in this nation’s history and tradition” and “implicit in the concept of ordered liberty”.
He reiterated the Roe court’s “errors” and lamented that the issue had been taken out of the hands of those who opposed abortion rights.
Roe was on a collision course with the constitution from the day it was decided . . . and the errors do not concern some arcane corner of the law of little importance to the American people. Rather, wielding nothing but “raw judicial power,” the court usurped the power to address a question of profound moral and social importance that the constitution unequivocally leaves for the people . . . The court short-circuited the democratic process by closing it to the large number of Americans who dissented in any respect from Roe . . . Roe and Casey represent an error that cannot be allowed to stand.
Finally, Alito wrote that court does not know, and need not consider, the implications of its decision.
We do not pretend to know how our political system or society will respond to today’s decision over-ruling Roe and Casey. And even if we could foresee what will happen, we would have no authority to let that knowledge influence our decision. We can only do our job, which is to interpret the law, apply longstanding principles of stare decisis, and decide this case accordingly.
We therefore hold that the constitution does not confer a right to abortion. Roe and Casey must be overruled, and the authority to regulate abortion must be returned to the people and their elected representatives.
Concurring opinion by Clarence Thomas
Thomas, widely considered to be the most conservative justice, agreed. He also said the court should perhaps go further and reconsider its decisions on contraception, same-sex relationships and same-sex marriage, citing Supreme Court cases relevant to each issue.
For that reason, in future cases, we should reconsider all of this court’s substantive due process precedents, including Griswold, Lawrence, and Obergefell. Because any substantive due process decision is “demonstrably erroneous,” we have a duty to “correct the error” established in those precedents.
Concurring opinion by Brett Kavanaugh
Kavanaugh, another conservative, wrote to share his “additional views”. He emphasised that the court was returning the issue of abortion to the people, rather than outlawing it.
To be clear, then, the court’s decision today does not outlaw abortion throughout the United States. On the contrary, the court’s decision properly leaves the question of abortion for the people and their elected representatives in the democratic process.
He claimed the constitution was “neutral” when it comes to abortion rights.
In sum, the constitution is neutral on the issue of abortion and allows the people and their elected representatives to address the issue through the democratic process. In my respectful view, the court in Roe therefore erred by taking sides on the issue of abortion.
And he wrote that court itself must be “scrupulously neutral” — a point to which the court’s liberals took exception.
In my judgment, on the issue of abortion, the constitution is neither pro-life nor pro-choice. The constitution is neutral, and this court likewise must be scrupulously neutral. The court today properly heeds the constitutional principle of judicial neutrality and returns the issue of abortion to the people and their elected representatives in the democratic process.
Opinion by John Roberts, concurring in judgment
Roberts, the chief justice, concurred with the court’s specific judgment upholding Mississippi’s 15-week restriction on abortions, but not with the dramatic scope of its decision. He called it a “serious jolt to the legal system”.
I would take a more measured course . . . Our abortion precedents describe the right at issue as a woman’s right to choose to terminate her pregnancy. That right should therefore extend far enough to ensure a reasonable opportunity to choose, but need not extend any further.
He reiterated that overturning Roe was unnecessary to deciding the case.
I would decide the question we granted review to answer — whether the previously recognised abortion right bars all abortion restrictions prior to viability, such that a ban on abortions after 15 weeks of pregnancy is necessarily unlawful. The answer to that question is no, and there is no need to go further to decide this case.
Dissenting opinion by Stephen Breyer, Sonia Sotomayor and Elena Kagan
The impassioned dissent by the court’s three-member liberal wing begins by pointing to the “half a century” during which Roe vs Wade “protected the liberty and equality of women”.
Respecting a woman as an autonomous being, and granting her full equality, meant giving her substantial choice over this most personal and most consequential of all life decisions.
They said they fear the “draconian restrictions” and punishments that states may now mete out.
Enforcement of all these draconian restrictions will also be left largely to the states’ devices. A state can of course impose criminal penalties on abortion providers, including lengthy prison sentences. But some states will not stop there. Perhaps, in the wake of today’s decision, a state law will criminalise the woman’s conduct too, incarcerating or fining her for daring to seek or obtain an abortion.
And in any case, they wrote, women’s rights have been curtailed.
Whatever the exact scope of the coming laws, one result of today’s decision is certain: the curtailment of women’s rights, and of their status as free and equal citizens.
The dissenters also took a direct shot at Kavanaugh’s neutrality argument.
When the court decimates a right women have held for 50 years, the court is not being “scrupulously neutral”. It is instead taking sides: against women who wish to exercise the right, and for states (like Mississippi) that want to bar them from doing so.
And unlike Alito, they specifically sought to address the real-world implications.
The disruption of overturning Roe and Casey will therefore be profound. Abortion is a common medical procedure and a familiar experience in women’s lives. About 18 per cent of pregnancies in this country end in abortion, and about one-quarter of American women will have an abortion before the age of 45 . . . [P]eople today rely on their ability to control and time pregnancies when making countless life decisions: where to live, whether and how to invest in education or careers, how to allocate financial resources, and how to approach intimate and family relationships.
They warned of the fragility of constitutional protections.
The American public, they thought, should never conclude that its constitutional protections hung by a thread — that a new majority, adhering to a new “doctrinal school”, could “by dint of numbers” alone expunge their rights.
Supreme Court justices often conclude their dissents by saying they “respectfully dissent” or, to hit a stronger note, that they simply “dissent”. On Friday, the court’s liberal bloc dissented “with sorrow”.
With sorrow — for this court, but more, for the many millions of American women who have today lost a fundamental constitutional protection — we dissent.
Original Source: ft.com
US Supreme Court Overturns Roe Vs Wade in Major Blow to Abortion Rights
The US Supreme Court has struck down Roe vs Wade, the legal decision that has enshrined the constitutional right to an abortion for nearly 50 years, in a dramatic ruling by the court’s conservative majority that will shake up American society, politics and jurisprudence for years to come.
In the decision authored by Justice Samuel Alito, the justices of the Supreme Court upheld a state law in Mississippi that bans abortion after 15 weeks. They also went further, saying that the Roe vs Wade ruling of 1973 was incorrectly decided. The court’s three liberal justices dissented.
The court’s ruling was one of its most intensely anticipated in years — even more so after a draft of the majority opinion heralding its final decision to overturn Roe vs Wade was published by Politico in April, triggering a highly unusual probe within the institution into the leak.
In denying a constitutional right to an abortion, the court has effectively given a green light for states to enact abortion laws that can be as restrictive as they wish. Several states run by Republican-led governors and legislatures have already passed laws that mean more restrictions on abortion will be automatically implemented if Roe is overturned.
The sweeping opinion in the Mississippi case was made possible by the appointment of three conservative Supreme Court justices during the presidency of Donald Trump, who secured their confirmation through the then Republican-led Senate. The court’s conservative majority is now so strong that it can afford to lose the support of Chief Justice John Roberts, who is considered a more moderate conservative, and still prevail in key rulings.
Earlier this year, the Democratic-led Senate confirmed Ketanji Brown Jackson, a liberal nominated by Joe Biden, to be a justice on America’s highest court. Since she is replacing Stephen Breyer, another liberal, her appointment will not affect the court’s balance of power.
The Supreme Court ruling on abortion was released with less than five months to go before November’s midterm elections, and may alter the political dynamic heading into the vote, though it is unclear whether it can overpower the impact of high inflation and economic perceptions as a factor for voters.
With polls showing that a majority of Americans opposed to overturning Roe vs Wade, Democrats are hoping that the ruling will trigger outrage, mobilise its base, and attract moderate swing voters who will see Republican positions on the issue as increasingly extreme.
But Republicans believe that disappointment with Biden’s handling of the economy, and high consumer prices, particularly for food and petrol, will still carry the day and give them a strong chance of recapturing control of the House of Representatives and possibly even the Senate.
Original Post: ft.com
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