Раздел: Економика

экономические новости

Rethinking the Future of Beauty Salons

Soon there will be no classic beauty salons in the United States. At least that’s what two Alexandria businessmen claim. Don and Jeff DeBolt, father and son, offer stylists an opportunity to become owners of “one man salons” by renting equipped salon studios. The prices start at three hundred dollars per week. Their experiment turned out to be a successful business. Today there are 300 Sola Salon Studios with over seven thousand professionals. Anush Avetisyan visited one of them.

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Gas Prices High, Going Higher in North Korea

While world attention has focused on Kim Jong Un’s recent missile tests, a monthlong surge in gasoline prices in Pyongyang is showing no signs of letting up, a puzzling problem that if allowed to drag on could be bad news for the North Korean economy.

 

Prices have shot up to about $2.30 per kilogram, or about $6.44 a gallon, since mid-April, when prices were in the $1.25-30 range. That means North Korea now has some of the highest prices in the world for gasoline. For comparison, the price in April last year was about 80 cents per kilogram.

 

The cause and extent of the surge remains a mystery. 

Traffic unaffected

 

Officially, there has been no comment. There’s no obvious sign of less traffic on the streets, at least in Pyongyang, which is more affluent and developed than other North Korean cities. Taxis appear to be operating normally and have not raised their fares. 

 

The North’s by now pervasive market economy, which is tolerated by the ruling regime in exchange for its cut of the profits, has made fuel and the ability to transport goods and people so essential that demand for gasoline is not so sensitive to price. 

 

But many gas stations around the capital, if they are selling fuel at all, have been limiting who they sell it to and how much each customer can buy. The long queues and mad dashes to fill gas tanks and large plastic storage cans that marked the beginning days of the surge appear to have subsided, though stations’ operations remain irregular and unpredictable.

 

North Korean gas stations generally belong to chains associated with large government enterprises or sometimes the military. Gas is also sold through more informal channels, including street-side stalls and the black market. It is sold by weight in North Korea, thus the “per kilogram” rates. 

What’s behind this?

 

Without official confirmation or data, it’s hard to conclusively say what is happening. Prices also tend to fluctuate from station to station. 

 

Several possible scenarios could be in play. 

 

It was rumored last month that China had or was about to limit exports. That possibility, hinted at in a tabloid newspaper associated with China’s ruling party, could have set off the surge either because of an actual drop in supply or speculative buying in anticipation of a shortfall. 

 

The incentive to hoard remains because of rumors Beijing will implement sanctions if Pyongyang conducts a nuclear test. It is unclear how informed North Koreans are about the possibility of another test soon, but satellite imagery widely reported abroad suggests one could come at any time.

 

The North Korean government itself might have pulled some of supply out of the market.

 

Pyongyang has been known to divert fuel to higher-priority uses, such as major construction projects or high-profile political events. Gas prices can also rise in tandem with the farming cycle, when more fuel is needed for tractors and pumps. All three could apply right now. North Korea completed construction of a major high-rise residential area in the capital and held a lavish celebration and military parade last month. This is also spring planting season.

 

The most ominous possibility is that the regime is preparing for some sort of emergency.

 

But there does not seem to be any strong evidence of that or of Chinese action to cut off supplies. 

William Brown, an adjunct professor at Georgetown University and non-resident fellow at the Korea Economic Institute of America, said rumor-inspired hoarding is the likely culprit. 

Sensitivity to sanctions

 

It’s unclear if prices are also rising for diesel and kerosene, used to heat and keep the lights on in city apartments and machinery working in the fields. 

 

An acute sensitivity to even the hint of Chinese sanctions, if that is behind the surge, would be telling. 

 

The Soviet Union supplied crude oil to North Korea in the 1950s through the 1980s. China joined in early 1970s and now provides virtually all of the North’s supply. Brown said that includes a 50,000-ton delivery monthly via an 18-kilometer (11-mile) cross-border pipeline that is worth about $20 million at current Chinese export prices. 

 

Beijing doesn’t require the North to pay and hasn’t included those shipments in official trade figures since 2014. 

 

If Pyongyang had to start paying for that 50,000-ton freebie, the profit from sales of what it refines domestically would drop and it would have less money to spend on other things. The resulting scarcity of dollars would hurt the value of North Korea’s currency, leading to inflation. 

 

In any case, Brown said, the volatility of gasoline prices underscores the North’s dependence on markets that have expanded dramatically since Kim Jong Un took power more than five years ago. The rise of markets has led to better productivity and use of scarce goods, like gasoline, helping economic growth.

 

But, he added, it is at the same time “the bane of a socialist government.”

 

“Real money in private pockets, after all, is power,” he said. 

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Reports: US Job Market Remains Strong; Merchandise Trade Deficit Gets Worse

New data Thursday paint a mixed picture of the U.S. economy.

A report on the job market shows a slight increase in the number of people signing up for unemployment assistance last week. But the data also show that the number of people laid off remains at a low level consistent with a strong job market, where it has been for well over two years.

Economists say strong employment data will encourage the U.S. central bank to raise interest rates at its next meeting in June. The U.S. unemployment rate will be updated late next week.

A separate report shows the United States buys more merchandise abroad than it sells to foreigners. April’s trade gap was the second-worst in two years.

The trade data could mean slower economic growth. Friday, experts will publish an update to the U.S. GDP for the first few months of this year. A survey of economists shows they expect it to decline slightly from the disappointing seven-tenths of a percent annual rate reported earlier.

 

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Trump Seeks to End Program for Older Jobless Americans

Nathan Singletary is beyond the traditional retirement age, but he’s only just beginning a new career — helping other low-income, unemployed Americans over age 55 find jobs.

Singletary got his job through the half-century-old Senior Community Service Employment Program, a training and placement program underwritten by taxpayers aimed at putting older Americans back into the workforce.

 

President Donald Trump says there are too few participants who find work that’s not paid for by the federal government. This week, he proposed deleting the $434 million program from the federal budget — a strike at a piece of President Lyndon Johnson’s War on Poverty.

 

“That would mean a great deal of hardship, for me and the people who come to us for help,” Singletary, 67, said last week from his desk at the AARP Foundation’s offices in Harrisburg, Pennsylvania. “It’s hard enough to find a job at this age.”

 

He says a friend told him about Trump’s plan around the time the president celebrated his 100th day in office three miles down the Susquehanna River at the Ames Companies’ thriving wheelbarrow factory. There, Trump signed executive orders to “defend American workers and companies.” It’s part of Trump’s agenda to boost American workers through apprenticeships, fairer trade deals and other incentives for employers to create jobs here in the U.S.

 

The seniors’ employment program that Trump proposes to eliminate provides part-time work at minimum wage. Participants have to live locally, have income close to or below the poverty level and be over 55.

 

In Harrisburg, participants accepted into the program are coached by Singletary at the AARP offices on how to explore online job listings. He, in turn, is being trained by another program participant, employment specialist Luz Rivera, to help participants find a job and get the required training.

 

Singletary watches as Rivera, 68, asks a newer participant, Luis Quinones, if he has computer skills. “I’m computer illiterate,” Quinones, 66, says with a grin. Rivera signs him up for computer training and a second year in the program.

 

About two-thirds of the participants in Harrisburg are able to find jobs not subsidized by the federal government, according to the program’s literature. The figure for the whole Senior Community Service Employment Program nationally is lower — at or slightly less than half, according to a 2015 government study Trump cites as evidence for nixing the program.

 

Across town, Jimmie Cobb, a 63-year-old sous chef by trade, recently scored a full-time position — with benefits — as a custodian at the State Museum of Pennsylvania, where the program had placed him temporarily last fall.

 

“This job is a comfort to me,” the Harrisburg resident says during a break. He says he “just walked in” to the AARP offices nine months ago, filled out paperwork and a day later was undergoing training. “I could not find more than temporary work before.”

 

It may seem like a good time to be an older worker seeking a job in an economy recovering from recession. Unemployment among Americans over 55 is at 3.3 percent, lower than the nation’s already healthy 4.4 percent, according to the Bureau of Labor Statistics. But older Americans face unique challenges finding work, including health problems, living in rural areas and the plain fact that they have a limited working future, various studies have shown. A 2012 analysis by a private contractor for the Labor Department found that job placement among those participating in the seniors’ employment program declined with age.

 

The government estimates that by 2020, workers age 55 and over will make up a quarter of the workforce. The Labor Department says the seniors’ employment program has helped more than 1 million workers in this age group enter the workforce.

 

But Trump says that’s not enough. His budget plan says 68,000 people a year get some support from the program. But at a cost of nearly $6,500 per participant, the program “fails to meet its other major statutory goals of fostering economic self-sufficiency,” it says. The document says the seniors could get help instead under the 2014 Workforce Innovation and Opportunity Act programs, which apply to would-be workers of all ages.

 

Singletary estimates that locally about 40 percent of people who qualify for the seniors’ training and placement positions “simply are going through the motions, show up one time to fulfill a requirement and you don’t see them again.”

 

Singletary says, “They spoil the whole outlook for the agency and the participants that want to do things for themselves.”

 

It’s not clear whether the Republican-controlled Congress will go along with Trump’s proposal to kill the program. Even some of his allies have declared the president’s budget dead on arrival, like most presidents’ budget proposals.

 

Here in Dauphin County — a blotch of Democratic blue surrounded by red Trump Country — the unemployment rate is 4.5 percent, slightly higher than the national average.

 

About 53 percent of program participants in Harrisburg are white and 42 percent are black, according to Elizabeth Stachiw, SCSEP’s project director for the AARP Foundation, a recipient of the federal grant money. About 16 percent consider themselves Hispanic, Latino and Spanish. The rest are Asian and American Indian, she said.

 

Nationally, about half of the current participants are white.

 

“We are not thinking about it,” she says of Trump’s proposed cuts. “We are focused on helping individuals 55 and over re-entering the workplace regain their confidence in order to find jobs in today’s market.”

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OPEC, Non-OPEC Nations Poised to Extend Output Cuts

OPEC and other oil nations meeting Thursday appeared set to extend their production cuts in an effort to shore up prices. But the intended impact could be short-lived.

That’s due to U.S. shale producers. With crude prices above $50 a barrel from lows of last year, they are increasingly moving back into the market. Their output already is partially offsetting the cuts, and even more U.S. companies are poised to return if prices rise further.

 

The upshot is that the price of oil — and derived products like fuel — is unlikely to increase much in coming months, analysts say. That will be welcome news to consumers and energy-hungry businesses worldwide but could continue to strain the budgets of some of the more economically-troubled oil-producing nations, like Venezuela and Brazil.

 

The latest reductions have been in effect since November, when the Organization of the Petroleum Exporting Countries agreed to cut production by 1.2 million barrels a day. Non-OPEC countries led by Russia chipped in with a further 600,000-barrel reduction.

 

Ahead of the meeting, the organization announced that Equatorial Guinea had joined, expanding OPEC membership to 14.

 

With the deal due to expire at the end of June, OPEC oil ministers appeared ready to prolong it up to nine months even before they sat down to make a formal decision.

 

Saudi Oil Minister Khalid A. al-Falih spoke of a “9-month straight” extension going into Thursday’s meeting. Iran’s Bijan Namdar Zanganeh floated possible extensions of three months, six months or even a year and said his country had “no difficulty” with any of the options, while Jabbar Ali Hussein al-Luiebi, his Iraqi counterpart, mentioned “the scenario of a nine-month freeze.”

 

Al-Falih said that the cuts had achieved a key aim. “Inventories are drawing down,” he told reporters.

 

But even with the reductions, oil prices have risen less than OPEC hoped for from last year’s levels. At over $50 a barrel, benchmark crude sits substantially below the highs reached in 2014, but is priced high enough to bring back into the market U.S. producers who eased back as prices tumbled last year. U.S. shale production requires a higher price to be profitable.

 

U.S. output since last year has increased by nearly a million barrels a day to a daily 9 million barrels. That already puts American producers in the league with oil giants Saudi Arabia and Russia and cuts further into OPEC’s past ability to play a role in setting prices and supplies.

More than 400 oil rigs are now working U.S. shale fields — an increase of more than 120 percent compared with a year ago. And U.S. producers are poised to expand more, even if prices tick upward only moderately as a result of an oil-cut extension by OPEC and its partners.

 

Commerzbank cited data from the U.S. Department of Energy saying U.S. production was roughly 540,000 barrels per day higher in mid-May than at the start of the year.

 

“This offsets nearly half of OPEC’s production cuts,” it noted.

 

Even a decision to maintain oil cuts thus is likely to only kick the can down the road from Thursday’s meeting until OPEC ministers convene again late this year. Crude prices are unlikely to rise substantially — and that means the era of windfall profits appears to be over for member nations, at least for now.

 

While analysts at research firm IHS Markit expect OPEC revenues to rise modestly this year after dropping from their peak of $1.2 trillion in 2012, “the total will be less than half the level of 2012, when prices were more than double current levels.”

 

 

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China Expands Globally Amid Concerns Over its Mercantilist Policies 

Just as President Xi Jinping was launching the One Belt, One Road initiative to expand China’s geo-economic footprint, a former high-level U.S. trade official raised concerns that Beijing has been reversing its policies of reform and keeping the market to itself.

Charlene Barshefsky, who worked as the U.S. Trade Representative under President Bill Clinton and witnessed China’s accession to the World Trade Organization, told a group of corporate executives gathered in Tokyo that “China has stopped the process of economic reform and opening, and instead has put in place a spate of measures that are zero-sum, highly mercantilist, and discriminate against U.S. and foreign companies.”

Sinicizing the Chinese economy

Barshefsky accuses Beijing of “Sinicizing” the Chinese economy, all the while taking advantage of other countries’ open markets.

The former U.S. trade representative’s remarks echo sentiments revealed in the latest Business Climate Survey put out by the American Chamber of Commerce in China, which represents nearly 1,000 companies doing business there.

Respondents to the survey said it seems “China has gone backwards … more regulations, taxes and local company market share protectionism.” Others noted that “despite a long track record of employing and training locals and investing in the local community, when the economy gets tough, the foreign firm is always seen as somehow not friendly to China.”

Golden days over?

William Zarit, head of AmCham China, tells VOA that “25 percent of our companies are either reducing investment or not increasing investment — that’s one out of four companies. Some companies are looking elsewhere in Asia, and some companies are looking back to North America.”

In another sign of how China is losing its luster in the eyes of foreign investors, the latest Business Climate Survey shows the percentage of companies that consider China a high priority investment destination has dropped below 60 percent. Zarit points out that nearly 60 percent “would seem to be good except that three or four years earlier, it was over 80 percent.”

 

Watch: William Zarit, president of the American Chamber of Commerce in China

Dangers despite continued presence

“Every company has to be in China, to a certain extent,” says Georgetown University’s Ted Moran, professor of business and economics.

While a majority of companies may choose to maintain a presence, their decisions to expand less rapidly “are also a danger,” Moran says. 

“They may be there, but they’re not going to have as strong value-added, they’re not going to expand as rapidly, they’re not going to introduce their best technology,” which in turn will confine China to a work bench economy, instead of one where companies feel comfortable bringing in operations with higher technology components.

Watch: Ted Moran, Georgetown professor of business and economics

‘A lot of things we have to consider’

Barshefsky, the former trade official, calls on President Donald Trump to either renegotiate the trade relationship with China or to revive the Trans-Pacific Partnership led by the United States. 

A Chinese trade official, speaking at the same forum, defended Beijing’s policies, saying the reform, although having slowed down, is still going on, and “there are a lot of things we have to consider.” The official, Long Yongtu, who now presides over the Boao Forum for Asia, also warned foreign companies to buckle up for stiff competition coming from Chinese domestic companies.

Resurgence of the state in the Chinese economy

Ever since China started accumulating more and more capital and demonstrating less and less hesitancy to use that capital to advance its interests abroad, many have voiced the concern that as Beijing’s investment spreads, so will its politics. Lately, concern over expansion of the state sector in the Chinese economy as well as the government-guided overseas investment strategy and potential consequences have grown louder.

In a report issued earlier this year by the Washington-based Peterson Institute for International Economics, Nicholas Lardy, a senior fellow, pointed to official figures released by the People’s Bank of China that corporate loans issued to government-backed firms rose from 35 percent in 2013 to 60 percent in 2014, the latest year official figures were available.

While one negative of pumping money into state-owned enterprises is that less capital and less market share would be available to smaller, private firms, other concerns have to do with both the financial viability of this approach and how it could impact not only China but the United States and other countries.

In a sign of both the ballooning footprint of Chinese state-owned companies in the world economy as well as the uncertainties of their fates, three Chinese state-owned companies made Fortune Magazine’s Global 500 list in 2016, but two of the three, China National Petroleum Corporation and Sinopec (a producer of chemical products) saw significant reductions in revenue in 2016 (more than 30 percent from the previous year), and a loss of profit of 56.7 percent and 30.6 percent, respectively.

Rory MacFarquhar, a former White House economics and finance official, warns that if the Chinese government continues to prop up state firms that he says are “more indebted, less profitable and less productive than private firms,” and use them to channel China’s plans and objectives abroad, it could have serious spillovers for other countries, including the United States, because the presence of these companies could potentially “distort the competitive playing field, and their outward investment may raise national security concerns.”

One Belt, One Road

President Xi promised that China would add billions of dollars’ worth of investment to the One Belt, One Road initiative. Asked if it is true that American companies are giving the initiative the “cold shoulder,” as some media reports have suggested, Zarit, the president of AmCham China, replied: “A number of AmCham China members are closely following OBOR developments to gauge progress and substantive opportunities for their respective companies, although some members still view the project with a bit of skepticism.

“Despite OBOR still being a fledgling initiative, the Chinese have rolled out this Xi Jinping presidential priority through an oversized summit with undersized substance. Having said that, American companies are interested in OBOR if it makes business sense.”

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Treasury Chief Says US Reviewing Iran’s Aircraft Licenses

U.S. Treasury Secretary Steven Mnuchin said on Wednesday that his department is reviewing licenses for Boeing Co and Airbus to sell aircraft to Iran, telling lawmakers he will increase sanctions pressure on Iran, Syria and North Korea.

“We will use everything within our power to put additional sanctions on Iran, Syria and North Korea to protect American lives,” Mnuchin said in testimony to the House Ways and Means Committee. “I can assure you that’s a big focus of mine and I discuss it with the president.”

He did not elaborate on the review of the aircraft licenses, which are tied to Iran’s compliance with a 2015 agreement with world powers to freeze its nuclear weapons development.

IranAir has agreed to buy a total of 200 U.S. and European passenger aircraft worth a total of $35 billion — $37 billion at list prices, though such deals typically include big discounts.

They include 80 passenger jets from Boeing, 100 from its European rival Airbus and 20 turboprop planes from Franco-Italian supplier ATR. All of the aircraft need U.S. export licenses.

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Treasury Chief to Congress: Raise Debt Limit Before August

Treasury Secretary Steven Mnuchin told lawmakers on Wednesday that they should vote to increase the government’s borrowing authority — and avert a disastrous economic default — before their August recess.

Within hours, the conservative House Freedom Caucus said it would oppose such a vote unless certain conditions are met.

The timeline is earlier than previous estimates. It had been expected that Congress wouldn’t have to act on the politically painful measure until sometime this fall, but tax revenues are coming in lower than previously estimated.

Mnuchin also urged the House Ways and Means Committee to pass the debt limit legislation as a bill without controversial additions, such as spending cuts sought by conservatives, that could complicate its approval.

“We can all discuss how we cut spending in the future and how we deal with the budget going forward but it is absolutely critical … that we keep the credit of the United States as the most critical issue,” Mnuchin said.

Pelosi favors debt limit increase

Democrats, including House Minority Leader Nancy Pelosi of California, have promised to support a debt limit increase provided it’s not weighed down by GOP policy changes. But such a vote is sure to be painful for conservative Republicans who opposed hiking the debt limit, presently set at almost $20 trillion.

In a statement, the Freedom Caucus said it would oppose a “clean raising of the debt ceiling,” and “we demand that any increase of the debt ceiling be paired with policy that addresses Washington’s unsustainable spending by cutting where necessary, capping where able, and working to balance in the near future.”

 

The Freedom Caucus counts several dozen conservatives who wield considerable clout in the House.

 

‘Extraordinary measures’ 

White House budget director Mick Mulvaney told a separate House panel that the reason for the new deadline is that “receipts currently are coming a little bit slower than expected.”

 

Mnuchin said in a letter to lawmakers in March that that he has started employing bookkeeping measures to avoid breaching the debt limit.

Those maneuvers, set out in law, are deemed “extraordinary measures,” but in reality they have been employed numerous times by Mnuchin’s predecessors to buy time until Congress could pass the legislation needed to raise the borrowing limit.

The Congressional Budget Office has estimated that the bookkeeping maneuvers Mnuchin can use will be exhausted by sometime in the fall.

Mnuchin has urged lawmakers to move quickly to remove investor doubt about any potential default. Lawmakers had been expected to wait until September or later to act.

 

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