2024-08-21 18:02

Aug 21 (Reuters) - U.S. employers added far fewer jobs than originally reported in the year through March, the Labor Department said on Wednesday, underscoring the growing concerns the Federal Reserve has about the health of the labor market as it gears up to start cutting interest rates in September. The department's estimate for total payroll employment for the period from April 2023 to March 2024 was lowered by 818,000. The revision represented a total downward change of about 0.5% and means that monthly job gains during the period averaged roughly 174,000, compared to the previously reported figure of 242,000. The sharply lower number is the first of two "benchmark" annual revisions undertaken by the department as it collects more accurate data only available in the months after it publishes the monthly payrolls report. If the tally holds through the final revision in February, it would be the largest downward revision since the 902,000 reduction to employment in March 2009. It also chimes with the view of some economists that data-gathering issues mean the strong job gains previously reported have been systematically overestimated. Private employment growth was revised down by 819,000, or 0.6% below what had been previously estimated by the department. Government employment was basically unchanged. The professional and business services category saw the biggest reduction of jobs, shedding 358,000, or 1.6%, from the prior estimate, followed by leisure and hospitality at 150,000 jobs, down 0.9%. The hard-pressed manufacturing sector saw a reduction of 115,000 jobs, also down 0.9%. The few sectors that saw upward revisions included private education and health services, up 87,000, or 0.3%; transportation and warehousing, up 56,400, or 0.9%; and utilities, up 1,700, or 0.3%. The revisions suggest government and private employers had about 157.3 million workers on their books in March on a seasonally adjusted basis, down from about 158.1 million as previously reported. Labor Department data will continue to reflect the original estimates until the final benchmark revision is published in February 2025. Final revisions are typically not far off the preliminary ones. "This is a noticeably larger than a normal revision ... it wouldn't be a stretch for the Fed to assume that recent job growth is also being overstated, strengthening its decision to shift attention from inflation toward the labor market," said Ryan Sweet, chief U.S. economist at Oxford Economics. FED CONCERNS Fed policymakers could factor in the indication that the job market was softer than previously thought as they weigh the pace of rate reductions after the initial lowering of borrowing costs widely expected at their Sept. 17-18 policy meeting. The central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for more than a year, having raised it by 525 basis points in 2022 and 2023 to quash high inflation. But with inflation now in touching distance of the Fed's 2% target rate, attention has turned to making sure that the lagged effects of a prolonged period of borrowing costs does not derail a labor market which had been seen as gradually cooling. Weaker-than-expected payrolls data for July heightened fears the Fed may have waited too long to begin cutting rates, as the unemployment rate rose to a post-pandemic high of 4.3%. However, other data since then, including weekly jobless claims, have suggested an orderly labor market slowdown remains in place. In last year's second benchmark revision, released this past February, the department revised down its estimate for total employment in March 2023 by 40,000. Sign up here. https://www.reuters.com/markets/us/us-job-growth-year-through-march-was-far-less-than-estimated-2024-08-21/

2024-08-21 13:38

HOUSTON, Aug 21 (Reuters) - Shares in U.S. oil producer Occidental Petroleum (OXY.N) , opens new tab fell to $56.17 on Tuesday, below a level that has routinely triggered purchases by its biggest holder, billionaire investor Warren Buffett's Berkshire Hathaway (BRKa.N) , opens new tab. Past multimillion-share purchases were so routinely timed to drops below $60 that Wall Street analysts called it "the Berkshire put," for setting a price floor on the oil firm's shares. But Occidental has traded below that price all month, the longest period since a swoon in January that ended after Berkshire acquired 4.3 million shares in early February. The lack of purchases may reflect the Omaha, Nebraska, investor's decision not to add to his nearly 30% stake, analysts said. Berkshire is the largest owner of Occidental shares with a stake worth $16.1 billion, and holds U.S. regulatory approval to buy up to 50% of the firm. Spokespeople for Berkshire and Occidental did not reply to requests for comment. Occidental shares are off 12.3% in the last 52 weeks compared with a flat performance by the XLE (XLE.P) , opens new tab fund that tracks the overall energy sector. The stock is under pressure after CrownRock LP investors this month filed to sell 29.6 million Occidental shares acquired in Occidental's $12 billion deal for the Midland, Texas, oil producer. Prior drops have routinely triggered big purchases. In June, Berkshire acquired 2.56 million shares at prices between $59.86 and $59.75 apiece. It bought nearly $590 million in Occidental shares after the price fell last December on the debt required in the CrownRock deal. The trend dates to fall 2022 with large Berkshire share acquisitions between $57.91 and $61.38. In addition to its common shares, Berkshire owns warrants to purchase 83.5 million shares of Occidental at $59.62 per share, and holds preferred stock in the Houston-based company. Sign up here. https://www.reuters.com/business/energy/will-buffetts-put-oil-firm-occidental-halt-share-drop-2024-08-21/

2024-08-21 12:40

MADRID, Aug 21 (Reuters) - Sunflower oil has dethroned olive oil as king of the kitchen in Spain, the world´s largest olive oil producer, as rising prices force consumers to switch to cheaper options. Spaniards bought 107 million litres (28.3 million gallons) of all types of olive oil in the first half of 2024 compared to 179 million litres of sunflower oil, according to Spain's biggest olive oil bottling association, Anierac. Until this year, olive oil has been the most popular cooking oil in Spanish households, accounting for 62% of sales by volume in 2023 while sunflower oil represented almost 34%, according to the Ministry of Agriculture. "It is clear that olive oil consumption is falling in Spain," said Primitivo Fernandez, spokesman for Anierac. "There are households that used to buy only olive oil and for the first time are now buying sunflower oil and olive oil," he said. Olive oil sales by volume fell 18% from the first half of 2023, Anierac said. Sunflower oil sales increased by 25% in volume last year, according to official data. A bottle of sunflower oil cost an average of 1.86 euros ($2.07) a litre last year, while pricier olive oil types cost upwards of 6 euros a litre, 50% more than in 2022, official data showed. Spain usually supplies around 40% of the world's olive oil, but heatwaves in the spring and a prolonged drought reduced olive harvests over the past two years, doubling olive oil prices to record levels. That has pushed the staple of the Mediterranean diet beyond the reach of poor households in Spain, which are switching to cheaper sunflower oil, according to a Ministry of Agriculture report on food consumption trends in 2023. At the end of last year, olive oil was mainly consumed in middle and upper-middle class households, the report said. One-litre bottles of extra-virgin olive oil were selling for as much as 14.5 euros ($15.77) in some supermarkets last year, putting them in the category of products retailers fit with security tags. In June, the Spanish government cut the value added tax on olive oil to make it more affordable even as prices have eased a little this year. Spain's largest supermarket chain Mercadona has cut the price of olive oil by 25% this year and this week is offering 1 litre bottles below 7 euros to woo back customers, a company source said. ($1 = 0.9001 euros) Sign up here. https://www.reuters.com/business/retail-consumer/sunflower-oil-dethrones-olive-oil-spains-kitchens-prices-soar-2024-08-21/

2024-08-21 11:53

DUBAI, Aug 21 (Reuters) - Cryptocurrency company Tether said on Wednesday it would launch a new stablecoin pegged to the United Arab Emirates (UAE) dirham as it taps demand for the Gulf currency and seeks to offer alternatives to the U.S. dollar. Stablecoins are digital tokens designed to keep a constant value backed by traditional currencies such as the U.S. dollar or euro. They have seen rapid growth, both as a form of payment and among traders wanting to buy and sell cryptocurrencies such as bitcoin outside of the regulated banking system. Tether runs the world's biggest stablecoin with its eponymous dollar-pegged token (USDT), designed to maintain a value of $1. The roughly $117 billion in circulation makes up the bulk of the $169 billion stablecoin market, according to CoinGecko data. "The main purpose is actually creating an optionality towards the U.S. dollar," Tether CEO Paolo Ardoino said of the proposed dirham-pegged unit during an event in Dubai, adding that he believed the dirham would become a preferred currency as global trade shifts. "We see a lot of interest in holding AED (dirham) outside of the UAE," he said, citing the stability and safety of both the country and its balance sheet. The dirham, like most Gulf currencies, is pegged to the U.S. dollar. The UAE is pushing to become a global hub for the crypto industry as economic competition heats up in the Gulf region. It has been quick to enable cryptocurrency payments in areas like real estate and school fees, boosting rates of adoption and transaction volumes while developing virtual asset regulation in both the capital Abu Dhabi and in Dubai. Tether also provides stablecoins pegged to the euro, China's yuan, the Mexican peso and to gold. Regulators have long warned about market risks from the adoption of crypto assets. They worry that growing stablecoin reserves expose the broader financial system to bigger risks, with the U.S. saying there could be a rapid outflow if holders rush to exchange tokens back into traditional currencies. FOCUS ON EMERGING MARKETS Ardoino told Reuters in April that Tether's recent growth was being driven by its use as an alternative to the dollar in emerging markets such as Argentina, Brazil, Turkey, Vietnam and parts of Africa, where the greenback can sometimes be in short supply. Tether said in a statement on Wednesday that the dirham stablecoin would be "fully backed" by liquid UAE-based reserves. It will be launched in collaboration with Abu Dhabi-listed cryptomining and blockchain conglomerate Phoenix Group (PHX.AD) , opens new tab and "with support" from investment firm Green Acorn Investment, Tether and Phoenix said. The new stablecoin aims to "streamline international trade and remittances, reduce transaction fees, and provide a hedge against currency fluctuations", according to the statement. The two firms did not give a launch date but Ardoino said licensing by the UAE Central Bank would take a few months. Phoenix Group Co-founder and CEO Seyed Mohammad Alizadehfard also said the blockchain platform that would support the stablecoin had not yet been selected. Sign up here. https://www.reuters.com/technology/tether-provide-stablecoin-pegged-uaes-dirham-2024-08-21/

2024-08-21 11:53

Aug 21 (Reuters) - Arch Resources (ARCH.N) , opens new tab agreed to merge with Consol Energy (CEIX.N) , opens new tab in an all-stock deal on Wednesday to create a North American coal mining giant that will be valued at more than $5 billion. Consol will issue 1.326 of its common stock for each share of Arch Resources, or about $125.61 on a per-share basis, according to Reuters' calculations, as per the last close. The new company would be called Core Natural Resources, which will trade under a new ticker symbol that the companies are yet to disclose. Consol Energy's shares gained 2% in premarket trade, while those of Arch Resources rose 3.4%. There has been a lack of investment in new coal mines amid tight emission regulations, but the fossil fuel is expected to remain part of the energy mix for years to come. The two companies had sold an aggregate of about 101 million tons of coal in 2023. The combined entity would own 11 mines across six states that produce thermal and metallurgical coal, used for heat generation at power plants and in steel-making. The deal is expected to generate $110 million to $140 million of annual cost and operational savings in a period of six to 18 months following the close of the transaction, which is expected in the first quarter of 2025. Arch stockholders will own about 45% of the combined company, with Consol shareholders owning the rest. Deal-making in the sector has gained momentum over the last one year as demand, especially for coking coal, remains strong. Commodities trader Glencore (GLEN.L) , opens new tab concluded its deal to buy coal assets of Canada's Teck Resources (TECKb.TO) , opens new tab earlier this year, while Anglo American (AAL.L) , opens new tab is seeking buyers for its Australian metallurgical coal mines after rebuffing BHP's (BHP.AX) , opens new tab $49 billion takeover offer earlier in the year. Sign up here. https://www.reuters.com/markets/commodities/consol-energy-arch-resources-merge-create-5-bln-coal-mining-entity-2024-08-21/

2024-08-21 11:49

TEULADA-MORAIRA, Spain, Aug 21 (Reuters) - A severe drought has rendered tap water undrinkable in several towns along Spain's Costa Blanca, forcing holidaymakers and locals to queue at distribution points for bottled water to cover their basic needs. As water levels have dropped, salinity has increased, prompting authorities in some areas to deem tap water unsafe for drinking or cooking. Bottled water is being distributed free of charge. Overdevelopment, climate change and mass tourism during the summer months when the population of the popular Mediterranean destination swells, have exacerbated the problem, activists say. In the Marina Alta area, north of the provincial capital Alicante, water consumption soars to 19.67 billion litres in July from 2.3 billion litres in January. There are nearly 38,000 swimming pools in the area, or one for every five inhabitants, according to the National Statistics Institute. The average for all of Spain is one pool per 35 people. The lack of water has forced town councils to ban activities such as filling swimming pools, or watering gardens and washing cars during the daytime. "We're already entering a climate emergency," Joan Sala of the environmental group Accio Ecologista-Agro told Reuters, citing poor rainfall in the northern part of Alicante province, which received half the usual amount of rain last year and just 10% of average levels so far this year. "There needs to be a bit more foresight, because now in the summer there are a lot more people here than in the winter," said Fernando Sapena, who owns the El Raco De L'arros restaurant in the town of Teulada-Moraira, specialising in paella, a rice-based dish from Valencia. Traditionally, Valencians attribute the local paella's distinct flavour to the mineral-rich hard water on tap there. The drought had also caused over 65 million euros ($72.27 million) in losses to the region's agriculture sector, farmers' association ASAJA said in July. ($1 = 0.8994 euros) Sign up here. https://www.reuters.com/world/europe/spains-drought-hit-costa-blanca-people-queue-bottled-water-2024-08-21/