US Business

The US jobs market grew much faster than expected in July, lifting employment back to pre-pandemic levels, in news welcomed by President Joe Biden as he faces tough midterm elections — but which also fuels concerns over sky-high inflation.

Even the White House had predicted job gains would slow last month, which Biden had said was part of the natural downshift after the rapid rebound of the world’s largest economy from the pandemic downturn.

Instead, US job growth jumped in July, as the economy added a surprising 528,000 positions, more than double what economists were expecting, according to official data released Friday. That took the jobless rate back to the pre-pandemic level of February 2020.

“Today, the unemployment rate matches the lowest it’s been in more than 50 years: 3.5%,” Biden said in a statement.

“More people are working than at any point in American history … there’s more work to do, but today’s jobs report shows we are making significant progress for working families.”

On top of the hiring surge last month, the Labor Department report said the outsized job gain in June was revised higher, as was May, adding a total 28,000 positions to the initial data.

Meanwhile, the closely-watched report showed wages jumped in July — with average hourly earnings up 15 cents from June — stoking concerns about a possible wage-price spiral. Over the past 12 months, average hourly earnings have increased by 5.2 percent.

That’s good for families struggling to make ends meet as they face soaring prices for groceries and gas, but could drive firms to raise prices further.

With inflation topping nine percent, the highest in more than 40 years, the Federal Reserve has been raising interest rates aggressively to cool the economy, and economists now say a third consecutive three-quarter-point hike is likely in September.

– ‘Wow’ –

After recent data showed GDP contracted for the second consecutive quarter — causing many to say the economy is in recession — US stocks had been gaining ground due to investor optimism that the Fed would be able to dial back its inflation-fighting efforts.

But Wall Street opened sharply lower following the jobs report, amid concerns about coming rate hikes.

With the latest increase, total non-farm employment recovered to its pre-pandemic level, the data showed, and hiring topped 430,000 in the past three months.

KPMG economist Diane Swonk’s initial reaction: “Wow.”

“This report pushes the Fed towards a 75 basis point move AGAIN in September,” she said on Twitter.

From zero at the start of the year, the Fed has raised the benchmark borrowing rate four times, and pledged to continue its war on inflation.

And central bankers this week have made it clear that investor optimism about a possible downshift was misplaced.

“Recession is now less of a worry. Inflation is more of a worry,” Harvard economist Jason Furman tweeted. “The Fed will likely need to do more.”

The central bank will get two more employment reports and multiple inflation reports before its next policy meeting in mid-September.

While employers for months have been struggling to find workers — with nearly two open positions for every unemployed person in the work force — job gains have continued.

Hiring was robust in leisure and hospitality and health care, which each adding 96,000 or more in july, while manufacturing and construction gained at least 32,000.

Builders in particular have been under pressure as the struggle to meet high demand for construction, especially homes, but employment in the sector is now back to its pre-pandemic level, the report said.

But there were signs of strains as well. The number of people working part time for economic reasons, which dropped sharply in June, rebounded in July. And a growing number of workers are taking on second jobs, including 403,000 with two full-time positions.

The share of people in the labor force has been stuck at around 62 percent, and some economists are pointing to the impact of long-Covid, which is keeping potential workers on the sidelines.

Kathryn Bach of the Brookings Institution said she believes there could be as many as four million people prevented from working due to the effects of Covid-19.

Albert Woodfox, a former member of the Black Panthers who spent a record 43 years in solitary confinement for a murder he claimed he did not commit, has died at the age of 75.

Woodfox, who was released from prison in February 2016, died in New Orleans, Louisiana, on Thursday of complications from Covid-19, his lawyer, George Kendall, said.

Woodfox and Herman Wallace, another African American inmate at the notorious Louisiana State Penitentiary known as Angola, were convicted of the 1972 murder of a white prison guard, Brent Miller. Both men maintained their innocence.

Woodfox, Wallace and another prisoner, Robert King, were dubbed the “Angola Three” and their cases drew international attention because of the long stretches they spent in solitary confinement.

The trio embraced the Black Panther militant movement while serving time for lesser crimes and said they were targeted by prison officials because they spoke out against inhumane treatment and racial segregation at the jail.

Woodfox, Wallace and King were confined to tiny cells for 23 hours a day at the prison built on the site of a former plantation worked by slaves from Africa.

Woodfox, who was serving time for armed robbery at the time of the murder of the prison guard, spent a total of 43 years and 10 months in solitary, believed to be more than any other US inmate ever.

King spent 29 years in solitary until his conviction for a separate prison murder was overturned in 2001 and he was released.

Wallace, who was suffering from liver cancer, was freed in 2013 and died just three days after his release.

Woodfox became a champion for prison reform following his release and published a book, “Solitary,” in 2019 that was nominated for a Pulitzer Prize and a National Book Award.

A man and woman in their late seventies were pronounced dead, and two others remained in critical condition Friday, after being struck by lightning in a park near the White House as a severe storm swept through the US capital.

The lightning hit Lafayette Square, a small park across the street from the White House, shortly before 7:00 pm (2300 GMT) Thursday, leaving two men and two women with “critical life-threatening injuries,” according to a statement from Washington’s fire and emergencies department.

All the victims were taken to local hospitals, but on Friday morning the Metropolitan Police confirmed that two of them — 75-year-old Donna Mueller and 76-year-old James Mueller, both from Janesville in Wisconsin — had been pronounced dead. 

The other two adults remain in critical condition, police said.

A White House spokeswoman said the Biden administration was “saddened by the tragic loss of life.”

“We are praying for those still fighting for their lives,” added Press Secretary Karine Jean-Pierre in a statement.

US Secret Service and park police rushed to help the four after witnessing the strike, fire and emergency services department spokesman Vito Maggiolo said in a statement posted on social media.

The victims had apparently sought shelter from the storm under one of the park’s trees.

“Trees are not safe places,” Maggiolo told the Washington Post. “Anybody that goes to seek shelter under a tree, that’s a very dangerous place to be.”

Photos posted by the department on social media showed multiple ambulances and at least one fire truck with flashing lights working at the scene.

Witness David Root told NBC he heard a “horrific boom.”

“I just couldn’t believe it,” he was quoted as saying. “Was surreal. I have never seen anything like this in my entire life.”

He said he had also been sheltering beneath a tree when he saw the lightning strike across the park. 

The people “weren’t moving,” he said, so he and others ran over to give help.

The Washington Post said the four were found some 100 feet from the statue of former US president Andrew Jackson which marks the center of the square.

The strike was part of a severe thunderstorm that hit the American capital on Thursday evening.

According to the US weather service, lightning killed an average of 27 people per year in the United States over the past decade.

Only about 10 percent of people struck by lightning are killed — typically from cardiac arrest — but many are left with lasting disability including neurological damage.

China said Friday it was ending cooperation with the United States on a litany of key issues including climate change, anti-drug efforts and military talks, as relations between the two superpowers nosedive over Taiwan.

Beijing has reacted furiously to a visit by US House Speaker Nancy Pelosi to Taiwan, which it claims as its territory and has vowed to retake — by force if necessary.

It has since Thursday encircled the self-ruled, democratic island with a series of huge military drills that have been roundly condemned by the United States and other Western allies.

And Friday saw its foreign ministry hit back further against the United States, suspending talks and cooperation on multiple agreements between the two — including on climate change.

The world’s two largest polluters last year pledged to work together to accelerate climate action this decade, and vowed to meet regularly to “address the climate crisis”.

But that deal looks shaky as relations sink to some of their lowest levels in years, as do agreements on everything from talks on military matters to anti-drug cooperation.

Pelosi — who Beijing also hit with sanctions for the visit — has defended her trip to Taiwan, saying Friday that Washington would “not allow” China to isolate the island.

In Washington, the White House summoned China’s ambassador to Washington to condemn Beijing’s “irresponsible” behaviour over Taiwan, a senior US official said Friday.

Taiwan has also condemned Beijing’s response to the visit, with premier Su Tseng-chang calling for allies to push for de-escalation.

“(We) didn’t expect that the evil neighbour next door would show off its power at our door and arbitrarily jeopardise the busiest waterways in the world with its military exercises,” he told reporters.

– ‘Our motherland is powerful’ –

Beijing has said its military exercises will continue until midday Sunday, and Taipei reported that 68 Chinese planes and 13 warships crossed the “median line” that runs down the Taiwan Strait on Friday.

AFP journalists on the Chinese island of Pingtan saw a fighter jet flying overhead, prompting tourists to snap photos as it flew along the coast.

A Chinese military vessel sailing through the Taiwan Strait was also visible, they added.

China’s drills involved a “conventional missile firepower assault” in waters to the east of Taiwan, the Chinese military said. 

And state broadcaster CCTV reported that Chinese missiles had flown directly over Taiwan — a major escalation if officially confirmed.

On the Chinese island of Pingtan, local tourists proudly extolled their country’s military might against its much smaller neighbour.

“Our motherland is powerful. We are not afraid of having war with Taiwan, the US or any country in the world,” Liu, a 40-year-old tourist from Zhejiang province, told AFP.

“We hope to unify Taiwan soon. We are not scared of anyone,” he added. 

“We don’t want to start a war, but we are not afraid of others.”

Wang, a businesswoman, was more sanguine about prospects for cross-strait ties.

“I hope China can unify Taiwan, but I don’t want war,” she said. “I hope this issue can be solved in a peaceful way.”

– ‘Significant escalation’ –

The scale and intensity of China’s drills have triggered outrage in the United States and other democracies.

“These provocative actions are a significant escalation,” US Secretary of State Antony Blinken said after talks with Southeast Asian foreign ministers at an ASEAN summit in Phnom Penh.

“The fact is, the speaker’s visit was peaceful. There is no justification for this extreme, disproportionate and escalatory military response,” he added.

China’s foreign minister countered with a warning for the United States, urging Washington not to escalate tensions.

“America’s habit is to create a problem and then use this problem to achieve its goals. But this approach will not work with China,” Wang Yi said at a press conference on the sidelines of the same summit.

“We want to issue a warning to the US not to act rashly and not to create a bigger crisis.”

Japan has lodged a formal diplomatic complaint against Beijing, with five of China’s missiles believed to have landed in its exclusive economic zone. 

On Friday, Japan’s foreign ministry said China “cancelled” a planned bilateral meeting on the sidelines of the ASEAN summit. 

And Australia — which has a troubled relationship with China, its largest trading partner — condemned the drills as “disproportionate and destabilising”.

The manoeuvres are taking place along some of the world’s busiest shipping routes, used to disseminate the global supply of vital semiconductors and electronic equipment produced in East Asia.

Three bulk carriers loaded with grain set sail from Ukraine on Friday under a landmark deal to free up shipments brokered by Turkey, as its leader met his Russian counterpart for talks on Moscow’s invasion of its neighbour.

Months of efforts by President Recep Tayyip Erdogan saw Moscow and Kyiv agree in Istanbul last month to resume the shipments from Ukrainian ports in a bid to relieve a global food crisis caused by the assault launched in February.

The government in Kyiv said on social media that two ships carrying Ukrainian maize — the Maltese-flagged Rojen and the Turkish Polarnet — had set off from Chornomorsk while the Panama-flagged Navistar departed from Odessa. 

As the vessels left, Erdogan was preparing with most of his top ministers for his second talks with President Vladimir Putin in 17 days and a working lunch in the Russian resort city of Sochi.

“I believe that (today’s meeting) will open a whole different page in Turkish-Russian relations,” the Turkish president said at the start of the talks, while Putin voiced hopes for a deal to boost “the development of our trade and economic ties.”

Putin also thanked Erdogan for helping orchestrate the resumption of Ukrainian grain shipments.

“Deliveries have already begun. I want to thank you, both for this and for the fact that at the same time an accompanying decision was made on uninterrupted supplies of Russian food and fertilisers to world markets,” Putin said.

The first ship from Ukraine crossed Istanbul on Wednesday, while the three latest deliveries were destined for Turkey and markets in Ireland and Britain.

European Council on Foreign Relations fellow Asli Aydintasbas wrote in a report last week that the war had “restored Turkey’s self-image as a key geopolitical player” give Erdogan a higher profile than at any time in recent years.

The Turkish leader wants to translate the success into truce talks in Istanbul between Putin and Ukrainian President Volodymyr Zelensky.

“We discussed if the grain agreement could be an occasion for a sustainable ceasefire,” Turkish Foreign Minister Mevlut Cavusoglu said after talks with Russian counterpart Sergei Lavrov in Asia this week.

– Extensive investigations –

The rare diplomatic breakthrough has been overshadowed in Ukraine, however, by a mushrooming controversy over accusations that the war-torn country is violating international law and endangering civilians in its defence against Russia’s invasion.

Amnesty International released a report Thursday listing incidents in 19 cities and towns where Ukrainian forces appeared to have put civilians in harm’s way by establishing bases in residential areas.

Zelensky equated the accusations to victim-blaming in an evening address in which he said the rights group had sought to offer “amnesty (to) the terrorist state and shift the responsibility from the aggressor to the victim”.  

“There is no condition, even hypothetically, under which any Russian strike on Ukraine becomes justified. Aggression against our state is unprovoked, invasive and terrorist,” he added.  

“If someone makes a report in which the victim and the aggressor are supposedly equal in some way… then this cannot be tolerated.”  

After a four-month investigation, Amnesty said it had found that the Ukrainian military had established bases in schools and hospitals, and launched attacks from populated areas, asserting that the tactics violated international humanitarian law. 

It pushed back against criticism of its report Friday, saying the group “fully stands by our research.” 

“The findings… were based on evidence gathered during extensive investigations which were subject to the same rigorous standards and due diligence processes as all of Amnesty International’s work,” Secretary General Agnes Callamard told AFP in emailed comments.

– Counter-offensive –

On Friday, the Ukrainian presidency and local authorities reported Russian bombardments overnight targeting the southern city of Mykolaiv with widely-banned cluster bombs and heavy artillery — wounding 20 people, including a 14-year-old boy.

Mykolaiv — which has been attacked frequently — is on the main route to Odessa, Ukraine’s biggest port on the Black Sea, and is the closest city to the southern front. 

The regional regional governor Vitaliy Kim ordered a curfew from 11:00 pm (2000 GMT) on Friday until 5:00 am (0200 GMT) on Monday, appealing to locals to “plan the weekend and make purchases for these two days.”

“Honest people have nothing to worry about — just keep your documents with you,” the governor said on social media platform Telegram.

Several towns and villages in the east, including Nikopol and Kryvyi Rig, were also hit by shelling that damaged houses and a gas station.

Several missiles struck the central city of Zaporizhzhia overnight, where Moscow has been accused of storing heavy weapons at Europe’s largest nuclear power plant in occupied Ukrainian territory.

There was also heavy bombardment of Ukraine’s second city Kharkiv, in the northeast, where housing, shops, a market and an educational institution were damaged.

Ukrainian forces are conducting a counter-offensive in the country’s south, where they claim to have retaken more than 50 villages previously controlled by Moscow.

They also claimed to have liberated two villages in the eastern Donetsk region on Thursday and one near Kharkiv on Friday. 

US Secretary of State Antony Blinken met a Cambodian opposition leader facing treason charges during a visit to Phnom Penh Friday, expressing concern about the kingdom’s eroding democracy ahead of elections next year.

One of the world’s longest-serving leaders, Prime Minister Hun Sen has ruled Cambodia for more than 37 years. In 2018 his party won every seat in a national election.

And in June, a Phnom Penh court convicted about 60 opposition figures — including dual US-Cambodian citizen Theary Seng — in a mass treason trial that rights groups have condemned as politically motivated.

Blinken said he directly expressed concerns about the kingdom’s ailing democracy during talks with Hun Sen, while visiting the Cambodian capital for the Association of South East Nations (ASEAN) foreign ministers’ meeting.

Allowing broader participation in the political system would strengthen the country, the secretary of state told reporters Friday.

“One of the things that stands in the way of strengthening the relationship between our countries are our concerns about eroding respect for human rights and democratic institutions here in Cambodia,” he said.

Washington’s top diplomat said that earlier Friday he met Cambodian opposition leader Kem Sokha, who is on trial for treason in a case that has dragged on since January 2020 — and which could effectively rule him out of next year’s national election.

During talks with Hun Sen, Blinken also raised the case of Theary Seng. The outspoken lawyer and campaigner was hit with a six-year jail term in June’s treason case.

Hun Sen and his ruling party have publicly backed the prime minister’s eldest son — currently commander of the army — to eventually take the reins.

Ahead of local elections two months ago, the United Nations Human Rights Office said it was disturbed by reports of opposition obstruction in a “paralysing political environment”.

Hun Sen’s political party later announced a landslide win.

Japan’s foreign minister Yoshimasa Hayashi also raised concerns about Cambodia’s democracy with Hun Sen during his bilateral talks on the sidelines of the ASEAN meeting.

Japan hopes Cambodia’s election next year is a “reflection of the diverse voices of the Cambodian people”, Japanese foreign ministry official Yasuhiro Tsukamoto told reporters in an online briefing.