Employment

Treasury yield surge is mostly about supply

5 Oct 2018

U.S. government debt issuance is rising while the Fed shrinks its balance sheet at a quickening pace. That’s bringing an end to an era of easy money that has lasted since the financial crisis. Along with trade tension, it’s a growing headwind for an economy at full employment.

Losing reliability is biggest threat to Ryanair

1 Oct 2018

Europe’s largest budget airline cut its full-year profit forecast by 12 pct due to strikes and higher fuel costs. Less profitable rivals are facing similar headwinds. But Ryanair customers are unsure it will fly at critical times like Christmas. That’s a harder issue to fix.

Orcel exit tests UBS’s Goldilocks investment bank

1 Oct 2018

Like the girl in the fairy tale, the Swiss lender wants a capital markets arm that is just the right size: not too big to weigh on its valuation, but not too small to compete. Departing chief Andrea Orcel managed the balancing act. His successors have to prove they can too.

UK shares-for-workers plan is appealing but flawed

24 Sep 2018

Forcing companies to transfer 10 pct of their equity to employees, as the Labour party proposes, seems a benign form of socialism. But capping dividends limits the benefits of spreading wealth. And handing the surplus to the government means it’s really a disguised tax hike.

Chancellor: “Haves” enriched most from Lehman bust

13 Sep 2018

Ultralow interest rates after the crisis may have lifted many boats, but the yachts of the wealthiest have been buoyed above all. Wall Street and the CEO class particularly benefited. This has come at the expense of the less fortunate, who are making their displeasure known.

U.S. wages rising – but not yet great again

7 Sep 2018

Job creation was strong in August and hourly earnings rose 2.9 pct year-on-year, the fastest since 2009. But that barely covers inflation. The White House says pay is understated. Polls suggest, though, that Americans don’t see improved finances, despite Republican tax-cut hype.

Hays gives dismal performance review for UK plc

30 Aug 2018

The British division of the 3 billion pound recruiter is cutting staff, and barely growing. Luckily, the sluggish UK economy was offset by hiring in Germany and Australia. Like Hays, UK companies will increasingly have to seek their fortune overseas.

Only casualties will dissuade Trump on trade war

3 Aug 2018

The White House may increase tariffs on $200 bln of Chinese imports to 25 pct. Big firms like Caterpillar can absorb the cost, but an escalating battle could force smaller businesses to close or fire workers. It may require a heavy toll, though, for the president to call a truce.

White House learns wrong lesson from labor market

6 Jul 2018

U.S. employers added 213,000 jobs in June, continuing a hot streak. President Trump reckons he has enough of an economic cushion to ratchet up trade wars with China and Europe. Yet firms are already delaying investment and facing higher costs. The buffer may dissipate.

Italy picks wrong medicine for job market malaise

3 Jul 2018

Rome wants to clamp down on short-term work contracts by diluting past labour reforms. That might help job security but would be counterproductive in cutting unemployment. Tackling a skills gap and trimming employers’ costs would do more to boost the quality and quantity of jobs.

Buffett and pals pick good medic for U.S. tapeworm

20 Jun 2018

Berkshire Hathaway, Amazon and JPMorgan chose Atul Gawande to lead their fight against rising medical bills. The surgeon has written extensively on how the system rewards excess, but not outcomes. Changing this focus would be a good start, even if neither easy nor sufficient.

Telstra’s slashing falls short of a full strategy

20 Jun 2018

The $26 bln Australian telco will cut one in four jobs, sell assets and put infrastructure in a standalone unit that could raise fresh capital. CEO Andy Penn’s austerity beats past scattergun attempts at reinvention. But there is no clear growth plan to get investors fired up.

Rolls-Royce investors wisely keep the seat belt on

15 Jun 2018

The plane engine-maker aims to generate 1 pound of cash per share over the mid-term, quadruple this year’s estimate. Despite the bullish new target, shareholders don’t look to be pricing it in fully. A distant horizon and history of one-off costs explain why.

Rolls-Royce has partial flight plan to destination

14 Jun 2018

The UK engine maker announced plans to cut 4,600 jobs ahead of its investor day in London. The resulting cost savings are welcome. The bigger question for investors is how CEO Warren East can more than double free cash flow in under two years to hit his 1 billion pound target.

China starts trading debt for growth

14 Jun 2018

Shadow bank lending slowed sharply in May, and investment growth slipped to just 6.1 pct. For now, Beijing’s target of increasing GDP by 6.5 pct annually is safe. But officials will be thinking about creative ways to keep credit flowing, even as they discourage riskier behaviour.

Plumber ruling leaves blockage in UK gig economy

13 Jun 2018

A decision by the country’s Supreme Court ruled that a self-employed contractor is entitled to workers’ rights is ominous for companies like Uber which depend on casual labour. But it offers little new guidance for dealing with technology’s impact on work practices.

Tesla job cull is more signal than maneuver

12 Jun 2018

Cutting 9 pct of workers won’t tip the $60 bln electric-car maker into profit. Even if it halved its sales and admin budget it would probably still lose money this year. There’s a message in the economizing, though: boss Elon Musk is eyeing small things, not just the big picture.

Investors retain edge over in-demand U.S. workers

1 Jun 2018

U.S. job creation strengthened in May with the unemployment rate hitting an 18-year low of 3.8 pct. Even so, wages rose only 2.7 pct year-on-year. The White House said corporate tax cuts would translate into higher pay. But buybacks have so far made shareholders the real winners.

Deutsche Bank de-flabbing cuts to the bone

24 May 2018

The German lender plans to cut more than 7,000 jobs by 2019, including a one-quarter reduction in equities trading headcount. It’s a bold move by boss Christian Sewing to get costs to 22 billion euros. It could also end up damaging Deutsche’s more profitable investment banking businesses.

The Exchange: The failure and future of globalism

18 May 2018

Not everyone has been a winner from globalization. Eurasia Group founder Ian Bremmer talked to Amanda Gomez about his book “Us vs. Them: The Failure of Globalism” and discussed what political and business leaders can do to make the world economic system work for all.