Global News September 01, 2017

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  2. Global News September 01, 2017

Reuters
“U.S. job growth slows in August; wage growth retreats.”

U.S. job growth slowed more than expected in August after two straight months of hefty gains, but the pace of increase should be more than sufficient for the Federal Reserve to announce a plan to start trimming the massive bond portfolio it built to support the economy.
Persistently sluggish wage growth could, however, make the U.S. central bank cautious about raising interest rates gain this year. The Labor Department said on Friday nonfarm payrolls increased by 156,000 last month. The economy created 399,000 jobs in June and July.
Average hourly earnings rose three cents or 0.1 percent after advancing 0.3 percent in July, keeping the year-on-year gain in wages at 2.5 percent for a fifth consecutive month. August’s moderation in employment growth, which pushed payroll gains below the 176,000 monthly average for this year likely reflects a seasonal quirk as well as a dearth of qualified workers. Over the past several years, the initial August job count has tended to exhibit a weak bias, with revisions subsequently showing strength.
While last month’s job gains likely keeps the Fed on course to outline a plan to start shrinking its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities at its Sept. 19-20 policy meeting, tepid wage growth casts doubts on a December interest rate increase

 

Bloomberg
“ECB May Not Have Final QE Plan Ready Until December.”

European Central Bank policy makers may not be ready to finalize their decision on next year’s bond-purchase plan until just a couple of weeks before the current program expires, according to euro-area officials familiar with the matter.
While the Governing Council is set to hold its first formal talks next week on its stimulus path for 2018, there is no appetite to rush into a decision then and the complexity of the topic means the full details of the plan might not be settled at the Oct. 26 policy meeting, the people said. They asked not to be named because such informal discussions are confidential
The risk that the decision goes to the wire on QE, currently set at 60 billion euros ($71 billion) a month of debt-buying until the end of December, reflects the major communication challenge facing the 25-member Governing Council. Robust economic growth is bolstering calls for buying to be wound down as soon as possible, yet still-weak inflation in the currency bloc and continuing fragility in some peripheral economies are making some officials nervous of sending definite signals on how and when stimulus will be pared back.
A December announcement would allow the ECB to tie its decision to updated forecasts for growth and inflation, which will be published at that meeting. The central bank has frequently used revisions to the outlook to justify policy changes.

 

New York Times
“Trump Administration Sharply Cuts Spending on Health Law Enrollment.”

The Trump administration is slashing spending on advertising and promotion for enrollment under the Affordable Care Act, a move some critics charged was a blatant attempt to sabotage the law.
Officials with the Department of Health and Human Services, who insisted on not being identified during a conference call with reporters, said on Thursday that the advertising budget for the open enrollment period that starts in November would be cut to $10 million, compared with $100 million spent by the Obama administration last year, a drop of 90 percent. Additionally, grants to about 100 nonprofit groups, known as navigators, that help people enroll in health plans offered by the insurance marketplaces will be cut to a total of $36 million, from about $63 million.
The officials said the administration believed that the cuts were necessary because of “diminishing returns” from advertising. They said the number of first-time enrollees in Affordable Care Act coverage fell by 42 percent this year, compared with 2016. In addition, they said that many navigator groups failed to meet their enrollment targets last year, despite sometimes receiving hundreds of thousands of dollars in federal funds.
Overall, 12.2 million people selected or automatically re-enrolled in marketplace plans for 2017, although the Trump administration said in June that the number of customers who paid their premiums had dropped to 10.1 million. Similar drops have occurred in previous years after people lost coverage after they failed pay their premiums.

 

Reuters
“Putin warns North Korea situation on verge of ‘large-scale conflict’.”

Russian President Vladimir Putin warned on Friday that the tense standoff between North Korea and the United States was on the verge of large-scale conflict and said it was a mistake to try to pressure Pyongyang over its nuclear missile program.
Putin, who is due to attend a summit of the BRICS nations in China next week, wrote in an article published on the Kremlin’s web site ahead of his trip that he favored negotiations with North Korea instead.
“It is essential to resolve the region’s problems through direct dialogue involving all sides without advancing any preconditions (for such talks),” Putin wrote.
The situation on the Korean Peninsula had deteriorated so much that it was now “balanced on the verge of a large-scale conflict,” said the Russian leader. A road map formulated by Moscow and Beijing, which would involve North Korea stopping work on its missile program in exchange for the United States and South Korea halting large-scale war games, was a way to gradually reduce tensions, said the article.