AFP

US lawmakers backed the decriminalization of marijuana nationwide in a vote Friday that will eliminate punishments for providing or possessing the drug if is signed into law by President Joe Biden.

The Democrats’ Marijuana Opportunity Reinvestment and Expungement (MORE) Act would remove its categorization as a dangerous “schedule 1” controlled substance alongside much harder narcotics that attract severe sentences, like heroin and LSD.

The bill cleared the House by 220 votes to 204, with three Republicans crossing the aisle, but analysts are skeptical about its prospects in the Senate, where Democrats would need 10 opposition lawmakers to overcome a 60-vote hurdle.

The US government is out of line with three-quarters of states that have legalized marijuana for medical use and a third of states, like California and Washington, that have freed it for recreational use, too.

“If states are the laboratories of democracy, it is long past time for the federal government to recognize that this experiment in legalization has been a resounding success,” said House Judiciary Committee Chairman Jerry Nadler, one of the bill’s sponsors.

Cannabis is one of the fastest-growing industries in the United States, with sales hitting $25 billion in 2021, according to influential cannabis website Leafly, and projected to reach $40.5 billion by 2025.

A report released in February by the Seattle-based company said the legalized cannabis industry provides work for more than 400,000 Americans and created some 280 new jobs a day last year.

California, the first state to legalize medical marijuana in 1996, made $1 billion in tax revenue in the first two years after expanding to full recreational use in 2018.

But marijuana remains illegal under federal law, posing significant hurdles for businesses that find themselves barred from accessing financial services and unable to secure loans or open bank accounts.

– ‘Shattered neighborhoods’ –

The MORE Act would provide loans to help small businesses “owned and controlled by socially and economically disadvantaged individuals,” the bill reads.

Many people arrested for marijuana use would see their records expunged, and those jailed on federal cannabis charges would have their sentences reviewed.

A federal tax would begin at five percent, with proceeds funding substance abuse treatment and legal counseling for the overwhelmingly Black communities harmed by the war on drugs.

“For over 50 years, the failed war on drugs has deepened racial injustice, shattered neighborhoods, and decimated communities,” said Aamra Ahmad, senior policy counsel at the American Civil Liberties Union.

The reform is hugely popular among Americans. A Pew Research poll found last year that 91 percent of adults think marijuana should be legal, either medically, recreationally or both.

But Republicans argue that decriminalization will increase use and create another layer of bureaucracy in the Treasury Department.

A similar bill passed the House in 2020 in a vote divided largely along party lines — but went nowhere in the then-Republican majority Senate.

Campaigners for legal reform applauded the vote, noting that Black people are almost four times as likely to be arrested for marijuana possession as whites, even though usage statistics are similar.

“Now is the time for the Senate to act on sensible reform legislation so that we can finally end the failure of prohibition and foster a well regulated marketplace for cannabis,” added Aaron Smith, the CEO of the country’s largest marijuana trade association, the National Cannabis Industry Association.

The US labor market has almost recovered from the mass joblessness caused by the pandemic, adding hundreds of thousands of positions last month and sending the unemployment rate nearly to where it was before Covid-19 broke out nationwide.

The Labor Department reported Friday that the unemployment rate fell more than analysts had predicted in March to 3.6 percent, a hair above its February 2020 level of 3.5 percent, while the economy added 431,000 jobs in the month.

Though the hiring total was slightly below analysts’ forecasts, it was nonetheless a strong figure that underscored how far the economy has come since the pandemic started two years ago.

The economy has “gone from being on the mend to being on the move,” President Joe Biden said Friday at the White House, as his administration grapples with low approval ratings driven in part by inflation, which has hit record levels during his presidency.

The economy has also added millions of jobs since Biden took office last year, but analysts said they doubted that the robust pace of hiring could be maintained.

“Today’s job report is great news as it means the economy has almost fully recovered from the blow caused by the pandemic,” Mark Zandi of Moody’s Analytics wrote on Twitter. 

“But it is somewhat disquieting in that the job market must cool off quickly, or inflation, our number one economic problem, will soon be a much bigger one.”

The data was released as the Federal Reserve undergoes a delicate process of fighting price increases by raising interest rates from the zero level they held them at when the pandemic was at its worst, while simultaneously trying not to harm the recovery.

Ian Shepherdson of Pantheon Macroeconomics said the report contains signs that wage growth — a driver of the price increases — is moderating while workforce participation is increasing, trends that could convince the Fed to be less aggressive in tightening policy.

“Rates still need to rise substantially, but the Fed won’t need to go overboard this year if the labor market is normalizing,” he said.

– Back to normal –

The latest report showed key markers of labor market health had made a full recovery after the catastrophe brought on by the pandemic, which cost more than 20 million people their jobs and sent the unemployment rate up to 14.7 percent in April 2020.

Last month, the number of unemployed people fell to six million, just above its 5.7 million level before the pandemic, while the number of people whose employment ended involuntarily or who completed a temporary job came in at 1.4 million, close to where it was in February 2020.

The Labor Department also revised upwards the healthy jobs gains reported in January and February, saying they were a combined 95,000 higher than first reported.

A wide range of industries hired last month, including leisure and hospitality, the sector encompassing the bars and restaurants hit hardest by the pandemic’s layoffs. 

That industry added 112,000 positions, while professional and business services firms gained 102,000 jobs in March, retailers added 49,000 positions and manufacturing employment rose by 38,000.

The labor force participation rate, indicating the share of people employed or looking for work, ticked up slightly to 62.4 percent, a post-pandemic high but still a percentage point below February 2020.

– Tightening to come –

Nonetheless, there was still ground to be recovered. The total number of employed people was still 1.6 million short of its pre-pandemic level, the data said, while employment in leisure and hospitality is 1.5 million jobs lower than before the pandemic.

The recovery was also not being felt equally, with unemployment for white workers hitting 3.2 percent in March, but coming in at 6.2 percent for Black Americans and 4.2 percent for Hispanic workers, though the rates for each group decreased from the month prior.

Economists viewed the data as reinforcing the Fed’s commitment to forcefully raising interest rates, perhaps by half a percentage point at its meeting next month, which would be double the increase it announced when it began hiking in March.

“The US economy has recovered the majority of the jobs lost during the pandemic and now the focus remains on how bad inflation will get, but… the Fed can go forward with aggressive tightening,” Edward Moya of OANDA said.

Amazon workers in New York voted Friday to launch the first US union at the e-commerce giant, a milestone for a company that has steadfastly opposed organized labor in its massive workforce.

Dozens of supporters cheered and clapped as the result was announced, with union organizer Christian Smalls popping a champagne cork in front of bank of TV cameras and photographers.

“We want to thank (Amazon founder) Jeff Bezos for going to space because while he was up there we were signing people up,” Smalls joked after workers at the Staten Island JFK8 warehouse backed the union 2,654 to 2,131 votes.

Amazon noted “disappointment” over the outcome, and said it was evaluating its options, including “filing objections based on the inappropriate and undue influence” of the National Labor Relations Board, which oversaw the vote.

At stake was Amazon’s ability to remain union-free in its home market, a status it has guarded fiercely since the company was set up in the 1990s by Bezos, who has since started a space tourism venture.

During the contentious campaign, the company discouraged workers from supporting unions at mandatory meetings, and through signs and other literature at the work site.

Amazon has argued that forming a union will mar the company’s direct relationship with workers and represent a jump into the unknown, with no guarantee employees will wind up with better wages or job security.

“It’s a truly historic day, it really is,” said Eric Milner, who represented the union organizers during the process. “I think it’s going to start a chain reaction — warehouse to warehouse.”

Official results were expected in the coming weeks in a union vote for an Amazon warehouse in the southern state of Alabama, but incomplete results showed organizers were not on pace to capture enough votes.

Staten Island organizers were already mobilizing for their next battle: the LDJ5 sorting center across the street from the JFK8 warehouse, with a vote will be held there at the end of the month.

– Union revival? –

The overall picture for organized labor in the United States is no better than mixed in an economy that has seen unions’ share of the American workforce steadily diminish in recent decades. 

The number of US workers who are members of a union has fallen from about 20 percent in 1983 to about 10 percent in 2021, according to the Bureau of Labor Statistics.

At Amazon, workers at a Bessemer, Alabama warehouse last year overwhelmingly voted against a unionization push supported by the Retail, Wholesale and Department Store Union.

But US worker rights agency National Labor Relations Board later called for a redo of the vote, citing what it called interference by Amazon.

In the Alabama re-vote 993 workers cast ballots against the labor group, compared with 875 employees in favor. 

But there were 416 “challenged” ballots, a “determinative” amount, according to the National Labor Relations Board, meaning the number of ballots still to be settled is big enough to potentially decide the final result.

For the Staten Island vote, a total of 8,325 workers at the JFK8 warehouse were eligible — although some no longer work at Amazon — for the vote held March 25-30. Ballots were cast by 4,852 employees.

At a news conference Thursday, union officials noted that their initial campaign last year — which received lots of media coverage and even an official endorsement by President Joe Biden — helped spur similar moves around the country.

At Starbucks, a movement to shift labor dynamics began with two cafes in upstate New York voting in December to unionize. Since then, more than 150 restaurants are at various stages of union campaigns.

The Starbucks campaign was led mostly by younger and college-educated workers who are broadly reflective of the current wave of newer labor supporters.

Union campaigns have also had recent success at museums, NGOs, media companies and universities.

But beyond those sectors, labor unions have struggled to gain a foothold, particularly in southern and some western states, whose percentage of unionized workers are less than one-third or one-fourth of those in California and New York.

Citing the need to counteract the “Putin price hike” following Russia’s invasion of Ukraine, President Biden has announced a sweeping plan to make unprecedented use of US emergency oil stockpiles.

Under Biden’s plan, the United States will release up to a million barrels a day every day for six months from its Strategic Petroleum Reserve (SPR). 

On Friday, the International Energy Agency announced that a group of 30 other countries will also release crude onto the market from strategic holdings following an emergency meeting in Paris.

Biden’s announcement Thursday prompted an immediate slump in oil prices, but the crude market was choppy on Friday, suggesting investor skepticism that the emergency releases will change the picture.

Below are some of the main questions about the SPR and the likely impact of the policy.

– What is the Strategic Petroleum Reserve ? –

Set up in 1975 following the 1973 Arab oil embargo, the SPR is maintained in immense salt caverns along the Gulf of Mexico. The IEA requires members to hold 90 days of import protection, a requirement the United States has traditionally met with SPR and industry stocks.

At its peak, the SPR contained 727 million barrels in December 2009. The level stood at 568 million barrels as of last week, according to government data.

If the United States goes forward with Biden’s plan, it would reduce the SPR to levels not seen since the mid-1980s.

– How does Biden’s plan compare with past uses?

The White House’s plan dwarfs previous SPR releases, which included President George H.W. Bush ordering about 17 million barrels released during the first Gulf War in 1991 and a 2011 release by President Barack Obama of 30.6 million barrels due to the disruption of Libyan production.

The announcement marks Biden’s third move to tap the SPR. 

In November, the United States announced it was putting out 50 million barrels of oil in response to soaring inflation amid pandemic-exacerbated supply chain snarls. Early last month, Washington also joined a 60 million emergency release announced by the IEA to address disruption from the Russian invasion.

Given the scale of the release, some analysts have said Energy Department officials may have trouble finding buyers for crude, or face infrastructure bottlenecks. A note from JPMorgan Chase predicted the release would add 850,000 barrels per day, rather than one million,

Bill O’Grady, chief market strategist at Confluence Investment Management, said that the move comes as the long-term need for so much stockpiling looks less acute because of decarbonization efforts to address climate change and as the US shale boom has lessened the need for imports.

“I don’t think that oil will ever be replaced,” O’Grady said.

– Will it bring down prices? –

Oil prices ended about three percent lower on Thursday following the official announcement after falling even more on the initial reports about the plan.

“The market reacted immediately after the announcement was made,” said Andy Lipow of Lipow Oil Associates in Houston, who thinks gasoline prices will fall 10 to 15 cents a gallon due to the SPR release.

The move comes as the US president faces long odds in the November midterm elections, as runaway consumer prices weigh threaten to overshadow a strong labor market.

Biden described the policy as meant to “ease the pain” of lofty gas prices, which now stand above $4.20 a gallon, up almost 50 percent from last year.

But now that the announcement has been priced in, “the market will look to the next headline for direction,” Lipow said.

“It’s like a quick fix,” said Jim Krane, a fellow at Rice University’s Baker Institute for Public Policy.

The quantity of oil is more than twice the increased output just offered by the OPEC+ group of exporters, and will “give us some relief,” said Krane.

But the extended nature of the SPR plan could blunt some of the longer-term impact if US shale producers defer investments in new drilling, or OPEC opts against shifting from its current austerity posture.

Biden has almost no other levers for lowering oil prices, said Krane, who notes “the US does not have a national oil company that takes orders from the government.”

Oil prices were already elevated prior to the Ukraine invasion, but Russia’s attack prompted crude prices to spike to almost $140 a barrel in early March after the United States banned Russian energy imports — not far from their all-time high.

While other oil importing countries have not followed the US lead, some analysts have estimated that as much as three million barrels a day may be sidelined by crude buyers “self sanctioning,” adding to uncertainty in a period when inventories lag historic levels.

Stock markets wavered on Friday as a solid US jobs report raised expectations of an aggressive US interest rate hike to tame runaway inflation.

Oil prices, meanwhile, fell slightly, with the US benchmark WTI contract dipping under $100 as US allies agreed to tap their emergency stockpiles again in a bid to calm the market.

While Russia’s war in Ukraine remains at the forefront of investor concerns, they were also tracking the latest US jobs picture as it serves as a barometer of the health of the world’s biggest economy.

The United States added 431,000 jobs in March and the unemployment rate fell to 3.6 percent, bringing the labour market closer to where it was before the Covid-19 pandemic began, according to official data.

The figures also fed into expectations of the next move by the US Federal Reserve, which has begun to raise interest rates in a bid to rein in a surge in inflation that has threatened to derail the economic recovery from the pandemic.

Higher rates, however, can also put the brakes on economic growth.

Analysts said they now expect the Fed to enact a half-point rate hike in May, higher than the quarter-point increase decided at its last meeting.

“The employment report showed strong jobs growth, a lower unemployment rate, and sustained wage inflation — a recipe for the Fed to issue a 50-basis-point hike next month,” market analysis firm Briefing.com said in a note.

Wall Street fell in midday trading after opening on a high note, but European equities finished the day in positive territory while Asian markets were mixed to end the week.

“This continues to be a very headline-driven market and they’re coming thick and fast,” said Craig Erlam, senior market analyst at OANDA foreign exchange platform.

“Talks between Ukraine and Russia are progressing well, it seems, but things can change rapidly, for better or worse. Until we see a deal, the situation will continue to feel precariously balanced and investors will remain on edge as a result,” he said.

Fallout from the war sent consumer prices in the eurozone surging by a record 7.5 percent, EU statistics agency Eurostat said heading into the weekend.

– IEA emergency meeting –

In a bid to ease oil prices, the 31-nation International Energy Agency agreed to tap emergency oil reserves again at an emergency ministerial meeting following a pledge to release over 60 million barrels.

The IEA, whose members include the United States, European countries, Japan and other nations allied to Washington, said it would make the new amount public early next week.

US President Joe Biden said that the countries had agreed to release “tens of millions of additional barrels of oil onto the market”.

“The IEA Ministers reiterated their concerns about the energy security impacts of the egregious actions by Russia and voiced support for sanctions imposed by the international community in response,” the group said in a statement.

The announcement came a day after Biden announced a record release of oil onto the market — one million barrels of US government oil every day for six months in a bid to ease prices.

Biden described the move as a “wartime” measure that will defuse Russia’s leverage as an energy power.

Washington has pressed the OPEC+ group of oil producing countries, led by Saudi Arabia and Russia, to boost its output but the group on Thursday agreed on another modest increase instead.

The war has driven oil prices to near record heights over concerns about supplies as Russia is the world’s second biggest exporter of crude after Saudi Arabia.

– Key figures around 1630 GMT –

New York – Dow: DOWN 0.2 percent at 34,609.91 points

London – FTSE 100: UP 0.3 percent at 7,537.90 (close)

Frankfurt – DAX: UP 0.2 percent at 14,446.48 (close)

Paris – CAC 40: UP 0.4 percent at 6,684.31 (close)

EURO STOXX 50: UP 0.6 percent at 3,927.44

Tokyo – Nikkei 225: DOWN 0.6 percent at 27,665.98 (close)

Hong Kong – Hang Seng Index: UP 0.2 percent at 22,039.55 (close)

Shanghai – Composite: UP 0.9 percent at 3,282.72 (close)

Brent North Sea crude: DOWN 0.5 percent at $104.20 per barrel

West Texas Intermediate: DOWN 1.0 percent at $99.26 per barrel

Euro/dollar: DOWN at $1.1046 from $1.1067 late Thursday

Pound/dollar: DOWN at $1.3111 from $1.3143

Euro/pound: UP at 84.25 pence from 84.20 pence

Dollar/yen: UP at 122.60 yen from 121.69 yen

Faced with a Russian blockade of its own ports, Ukraine is seeking to export the farm goods that many countries depend on via the Romanian Black Sea port of Constanta.

The solution is crucial both to Ukraine’s economy and to entire populations that rely heavily on its wheat and sunflower oil.

Bucharest has confirmed that discussions are underway with Kyiv, pointing out that Constanta already handles some imports to Ukraine and exports from it.

Before the war, Ukraine accounted for 12 percent of global wheat exports, 15 percent of maize and 50 percent of world sunflower oil.

“We and our partners are looking for alternative logistical routes to export our goods via European ports, including Constanta,” Ukrainian Agricultre Minister Mykola Solsky said recently.

– Ukraine ports blockaded –

The presence of Russian battleships and mines in Ukrainian waters renders commercial shipping there nearly impossible.

Since the start of the war, Russian forces have been blocking access to the southeastern Ukrainian ports of Berdiansk and Mariupol on the Sea of Azov, which opens into the Black Sea.

In the southwest, the crucial Black Sea port of Odessa lies perilously close to the frontline at Mykolaiv.

Odessa handles 90 million tonnes of shipments a year — 60 percent of the country’s total port traffic — and is in the Krelmin’s sights.

The Marine Traffic website, which tracks the position of all seagoing vessels, clearly shows the de facto blockade of these waters. 

Commercial ships have been absent from the zone since missile attacks on vessels sent their insurance premiums rocketing.

According to the agriculture ministry, Ukraine is currently losing $1.5 billion (1.4 billion euros) a month because of the stranglehold on port exports.

Meanwhile countries that depend on Ukrainian farm exports, particularly on the southern coasts of the Mediterranean, are seeing a food crisis start to develop.

Kyiv says it has sufficient stocks to meet Ukraine’s own food needs for the next two years. But it is equally keen to ensure exports continue as normal.

“Ukraine wants to show it is defending its export markets as well as its territory and is conscious of its importance as a supplier of both foodstuffs and industrial goods,” said Paul Tourret, head of France’s Isemar Institute, which specialises in the maritime economy.

– Alternative options – 

Kyiv is seeking to increase grain exports to Poland, Romanian and Slovakia by rail and, to a lesser extent, by lorry.

The Romanian and Ukrainian rail companies are discussing ways of cooperating, the Bucharest government said.

The goal is to export 600,000 tonnes per month, which nonetheless remains “marginal” compared to the export capacity of Ukraine’s sea ports, said Agritel analyst Gautier Le Molgat.

Tourret said Constanta represents the best option. Romania is a member of NATO, meaning its waters are protected. And as the EU’s second largest wheat exporter after France, it has the necessary infrastructure.

Constanta is the largest port on the Black Sea. It handled more than 67 million tonnes of exports in 2021, including more than 25 million tonnes of grains. It has a total capacity of 100 million tonnes.

The port is in a position to accept Ukrainian stocks because by this time of year, Romanian grain shipments have already left for their destinations.

However, if the blockade of Ukraine’s own ports were to last until the forthcoming harvests, Constanta’s storage capacity could be stretched to the limit.

“Romania also has something to gain from this … a moral benefit,” Romanian Defence Minister Vasile Dincu said recently.

The speaker of the Romanian parliament and the transport ministry announced earlier this week that new investments were planned for Constanta port.

– Getting to Constanta –

The crucial element is getting merchandise out of Ukraine and into Constanta.

There are several potential routes, Tourret said.

The most dangerous option is to transport goods by lorry from Odessa, along the Black Sea coast as far as the Danube river port of Galati and then by boat to the canal which links the river to Constanta. That takes one or two days.

A second possibility is to transport goods via Moldova, avoiding the border region of Transdniestr, which seceded in 1990 and hosts a Russian military base. 

Avoiding this region under de facto Russian control can involve a detour of several hundred kilometres, depending on the starting point.

The third choice is the longest but currently the least hazardous. It entails crossing Ukraine’s western border, the area least affected by the war, straight into northern Romania.

This route is currently used, in the other direction, to supply Ukraine with essential goods.

The US labor market has almost recovered from the mass joblessness caused by the pandemic, adding hundreds of thousands of positions last month and sending the unemployment rate nearly to where it was before Covid-19 broke out nationwide.

The Labor Department reported Friday that the unemployment rate fell more than analysts had predicted in March to 3.6 percent, a hair above its February 2020 level of 3.5 percent, while the economy added 431,000 jobs in the month.

Though the hiring total was slightly below analysts’ forecasts, it was nonetheless a strong figure that underscored how far the economy has come since the pandemic started two years ago.

The economy has “gone from being on the mend to being on the move,” President Joe Biden said at the White House, as his administration grapples with low approval ratings driven in part by inflation that has hit record levels under his presidency.

The economy has also added millions of jobs since Biden took office last year, but analysts said they doubted that the robust pace of hiring could be maintained.

“Today’s job report is great news as it means the economy has almost fully recovered from the blow caused by the pandemic,” Mark Zandi of Moody’s Analytics wrote on Twitter. 

“But it is somewhat disquieting in that the job market must cool off quickly, or inflation, our number one economic problem, will soon be a much bigger one.”

The data was released as the Federal Reserve undergoes the delicate process of fighting the price increases by raising interest rates from the zero level they held them at when the pandemic was at its worst, while simultaneously trying not to harm the recovery.

Ian Shepherdson of Pantheon Macroeconomics said the report contains signs that wage growth — a driver of the price increases — is moderating, while workforce participation is increasing, trends that could convince the Fed to be less aggressive in tightening policy.

“Rates still need to rise substantially, but the Fed won’t need to go overboard this year if the labor market is normalizing,” he said.

– Back to normal –

The latest report showed key markers of labor market health had made a full recovery after the catastrophe brought on by the pandemic, which cost more than 20 million people their jobs and sent the unemployment rate up to 14.7 percent in April 2020.

Last month, the number of unemployed people fell to six million, just above its 5.7 million level before the pandemic, while the number of people whose employment ended involuntarily or who completed a temporary job came in at 1.4 million, close to where it was in February 2020.

The Labor Department also revised upwards the healthy jobs gains reported in January and February, saying they were a combined 95,000 higher than first reported.

A wide range of industries hired last month, including leisure and hospitality, the sector encompassing the bars and restaurants hit hardest by the pandemic’s layoffs. 

That industry added 112,000 positions, while professional and business services firms gained 102,000 jobs in March, retailers added 49,000 positions and manufacturing employment rose by 38,000.

The labor force participation rate, indicating the share of people employed or looking for work, ticked up slightly to 62.4 percent, a post-pandemic high but still a percentage point below February 2020.

– Tightening to come –

Nonetheless, there was still ground to be recovered. The number of employed people was still 1.6 million short of its pre-pandemic level, the data said, while employment in leisure and hospitality is 1.5 million jobs lower than before the pandemic.

The recovery was also not being felt equally, with unemployment for white workers hitting 3.2 percent in March, but coming in at 6.2 percent for Black Americans and 4.2 percent for Hispanic workers, though the rates for each group decreased from the month prior.

Economists viewed the data as reinforcing the Fed’s committment to raise interest rates by half a percentage point at its meeting next month, double the increase it announced when it began hiking in March.

“Looking ahead, we expect job creation will settle into a slower but still healthy pace later this year as the economy feels the pinch from soaring inflation and tighter financial conditions,” Kathy Bostjancic of Oxford Economics said.