The presidential election
America at its best
The primaries have left the United States with a decent choice; now it needs a proper debate about policies
IT IS hard to believe after all the thrills and spills, but the real presidential race is only now beginning. In any other country, the incredible circus that has marked the past year could not have occurred. The business of choosing the main contenders for the top job would have been done behind closed doors, or with a limited franchise and a few weeks of campaigning. Hillary Clinton and Barack Obama, by contrast, have spent well over a year in the most testing and public circumstances imaginable—and that was just to get to the final five months.
The Republicans settled on their candidate more quickly, but theirs was still a marathon by anyone else's standards. And the end of it was surely the right result. In John McCain, the Republicans chose a man whose political courage has led him constantly to attempt to forge bipartisan deals and to speak out against the Bush administration when it went wrong. Conservatives may hate him, but even they can see that he offers the party its only realistic hope in November.
The Democratic race has been longer and nastier; but on June 3rd it too produced probably the right result (see article). Over the past 16 months, the organisational skills and the characters of the two contenders have been revealed. Mrs Clinton, surprisingly in the light of all her claimed experience, was shown up for running a less professional and nimble campaign than her untested rival. She has also displayed what some voters have perceived as a mean streak and others (not enough, though) saw as gritty determination. And she could never allay confusion about the future role of her husband.
Mr Obama has demonstrated charisma, coolness under fire and an impressive understanding of the transforming power of technology in modern politics. Beating the mighty Clinton machine is an astonishing achievement. Even greater though, is his achievement in becoming the first black presidential nominee of either political party. For a country whose past is disfigured by slavery, segregation and unequal voting rights, this is a moment to celebrate. America's history of reinventing and perfecting itself has acquired another page.
But will he play in Pennsylvania?
But that does not make Mr Obama the new messiah. The former law teacher has had obvious problems convincing America's middle-class voters that he understands their concerns. He has also displayed a worrying, somewhat Clintonian slipperiness on difficult issues, both trivial (whether he would wear a flag-pin) and significant (whether he would talk to rogue states). His victory, it must be noted, has been wafer-thin: in terms of delegates, a couple of hundred out of 4,500; in votes, only a few tens of thousands out of 35m. In the end, the Democrats have, very narrowly, opted for the candidate who has put together a novel coalition of blacks, young people and liberal professional sorts, rather than the candidate of their more traditional blue-collar base. How this coalition fares against the Bushless Republicans remains to be seen.
For what America's voters, and the world's fascinated spectators, have not had so far is much of a policy debate. Yes, there were bone-aching arguments between Mr Obama and Mrs Clinton as to whose plan for health care would work best. And yes, Mr Obama refused to endorse Mrs Clinton's bad plan for a gas-tax holiday. But on the whole, it has been a policy-light contest for the simple reason that there was very little to choose between the two Democrats either on domestic or on foreign policy. Small wonder, then, that the Democratic race focused on character more than content.
All that has now changed. With his victory speech in Minneapolis on June 3rd, Mr Obama took the fight to Mr McCain. Though there are a fair number of things on which Mr Obama and Mr McCain, admirably, agree (a cap-and-trade system for carbon emissions, the immediate closure of Guantánamo and a more multilateral approach to diplomacy, to name just three), there is a lot more that they disagree over.
Blood, treasure and votes
The choice will be starkest over Iraq. Mr McCain backed the war in the first place, and he proposes to stay the course there no matter how long it takes. Mr Obama opposed the “dumb” war from the start and has pledged to withdraw all combat troops within 16 months, though he has lately wriggled a little on this commitment. Although most Americans now think the war was a mistake, polls suggest that Mr McCain's determination to see it through may stand him in better stead with voters than Mr Obama's determination to pull out whatever the consequences, especially since the tide of war seems at last to have shifted firmly in America's favour. In general, Mr McCain will offer a much more robust approach to security issues than Mr Obama—and that may help him.
That said, the war is clearly receding as a political issue, just as concerns about recession are growing. America no longer has a Hummer economy (General Motors is considering selling off the gas guzzler). And there are clear choices about how to fix it. Mr McCain offers orthodox supply-side solutions, stressing deregulation, free trade, competitiveness and the use of market mechanisms to cure the problems in everything from health care to education to pensions. The trouble for him is that America is already a pretty deregulated place, and many voters feel that globalisation has brought them much less than was promised (and bankers a lot more). Mr Obama offers a very different vision: more spending on education and training, an expensive expansion of health care to (almost) all Americans and better benefits for the unemployed. His problem will be convincing sceptics that his sums add up, though it may well be that voters, battered by falling house prices and rising oil prices prefer not to worry too much about that.
Both candidates have their flaws and their admirable points; the doughty but sometimes cranky old warrior makes a fine contrast with the inspirational but sometimes vaporous young visionary. Voters now have those five months to study them before making up their minds (and The Economist will be doing the same). But, on the face of it, this is the most impressive choice America has had for a very long time.
June 6 (Bloomberg) -- The Group of Eight industrialized countries may try to convince China and India to agree to monitoring of cuts in energy use that Japan says will fail without support from the world's fastest-growing economies.
U.S. Energy Secretary Samuel Bodman, Japanese Trade Minister Akira Amari and officials from other G-8 countries will meet Zhang Guobao, head of China's State Energy Bureau, South Korean Knowledge Economy Minister Lee Youn-Ho and Indian officials in the northern Japanese city of Aomori to discuss energy conservation. India and China have refused to commit to long-term pollution goals, saying economic growth is a priority.
``China and India are key,'' Amari told reporters in Tokyo this week. ``Without commitments from those two nations, any strategies will be meaningless.''
The 95 percent gain in crude oil prices in a year forced India to raise fuel prices this week, while China volunteered last year to cut emissions of gases blamed for global warming. G- 8 environment ministers pledged on May 26 to reduce emissions by 50 percent by 2050. This weekend's meeting may help officials struggling to prepare the groundwork for a new climate treaty to succeed the Kyoto Protocol, which expires in 2012.
``Setting targets that somehow limit emission volumes will be hard to achieve at this moment,'' said Kenichiro Yamaguchi, chief consultant with the Global Warming Research Group at Mitsubishi Research Institute Inc. ``A key for setting numerical targets would be how much developed nations can accommodate demands of developing countries in transferring conservation technology.''
Alternative Energy
The G-8 -- the U.S., Japan, Canada, Germany, France, U.K., Italy, and Russia -- and China, India and South Korea, account for about 65 percent of global energy demand. Ministers will discuss exchanging technology for alternatives to oil, such as wind and nuclear power.
The International Energy Agency today said the world will need to spend $45 trillion on developing clean technologies in order to meet the G-8's target of halving global emissions by 2050. Nabuo Tanaka, the Paris-based agency's executive director, called for ``a global energy technology revolution,'' according to a statement released in Tokyo.
India `Reluctant'
The 11 countries will also seek agreements on national and industry targets for cutting consumption under a body to be called the International Partnership for Energy Efficiency Cooperation, which the G-8 plans to create by the end of this year, according to Japan's trade ministry.
``China has already set its energy-conservation target, so it's unlikely to resist establishing new targets,'' said Koichi Sasaki, a senior researcher at the Institution of Energy Economics in Tokyo. ``India is more reluctant to introduce numerical aims for conservation. It regards it as too early because its economy is still taking off.''
India and China's failure to agree on long-term targets for reducing greenhouse-gas emissions has been a stumbling block in negotiations for a new climate treaty, set to be completed in Copenhagen next year.
India's economy expanded 9 percent in the year ended March 31, the least since 2005. Growth may slow further to about 8.5 percent in the current financial year, Finance Minister Palaniappan Chidambaram said in New Delhi on May 30. China's economy is expected to expand 10 percent, according to 17 analysts surveyed by Bloomberg.
Biggest Polluters
The 1997 Kyoto treaty requires its 37 signatory nations to cut emissions by a combined 5.2 percent from 1990 levels by 2012. The U.S., the world's biggest polluter, followed by China, rejected the accord as unfair because it set no emission reductions for developing nations.
``Energy conservation and cutting emissions are closely connected,'' Sasaki said. ``If the 11 nations can agree on establishing energy conservation targets, in my opinion, that's sufficient. Whether they can agree on emissions targets at next month's summit is something different.''
The G-8 ministers will also call on oil exporters to raise production, with oil trading above $120 a barrel. Increasing output is the key to controlling spiraling prices, Korea's Ministry of Knowledge Economy said yesterday in a statement.
The Organization of Petroleum Exporting Countries, which produces more than 40 percent of the world's oil, has no plans to change output before its scheduled meeting in September, Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said on May 22 in a phone interview from Doha.
``Oil producers said the spikes aren't their problem, but that's not true,'' Japan's Amari said. ``It's a problem for both suppliers and consumers. We need to share a sense of urgency.''
June 6 (Bloomberg) -- Barack Obama and Hillary Clinton met last night for their first formal face-to-face discussion since the Democratic primaries ended and Obama clinched the party's presidential nomination.
The two met in Washington before Obama returned to his home in Chicago, Obama's communications director, Robert Gibbs, said. The meeting took place as Clinton was preparing to end her campaign and give her endorsement to Obama. She'll make her official announcement tomorrow at noon at the National Building Museum in Washington.
Obama and Clinton met at the home of Senator Dianne Feinstein of California, who told reporters today that the meeting was private without any aides present. Feinstein said Obama and Clinton were laughing when the meeting ended.
The candidates ``had a productive discussion about the important work that needs to be done to succeed in November,'' the two campaigns said in joint statement e-mailed to reporters.
Neither side would provide details about the substance of the talks.
Feinstein said Clinton contacted her yesterday afternoon to ask if they could use her home near American University. Feinstein set up two chairs facing one another in the living room, gave them water and left for the duration of the hour-long meeting.
Uniting Party
``At about 9 o'clock the meeting began. They talked. I went upstairs and did my work,'' Feinstein said. ``They called me when it was over, I came down and said, `good night everybody, I hope you had a good meeting.' They were laughing and that was it.''
Yesterday, both campaigns took steps to demonstrate they are ready to unite the party for the general election. Clinton distanced herself from efforts by some of her supporters to pressure Obama to pick her as his running mate.
Clinton ``is not seeking the vice presidency, and no one speaks for her but her,'' spokesman Howard Wolfson said in a written statement. ``The choice here is Senator Obama's and his alone.''
Obama also sought to cool down speculation about who he would choose for a running mate.
No Talking
``I've said before that Senator Clinton would be on anybody's short list,'' he told reporters on his plane from Bristol to Dulles, Virginia. ``But I am not going to discuss who is being considered, how they're being considered. We're just not going to talk about this anymore.''
Obama, 46, clinched the nomination two days ago when he amassed the required number of delegates to the Democratic National Convention in August. Clinton said she will help ``rally the party'' behind Obama in his campaign against presumptive Republican nominee John McCain, an Arizona senator.
In his first action as the Democratic Party standard-bearer, Obama said the party would no longer accept campaign donations from federal lobbyists and political action committees.
He also reached out to Clinton supporters, praising her campaign yesterday and inviting assistance from her husband, Bill Clinton. The former president repeatedly attacked his wife's rival during the primaries, generating criticism from Obama's supporters.
``Bill Clinton is an enormous talent, and I would welcome him campaigning for me,'' Obama said.
Joint Ticket
Hillary Clinton's strengths in parts of the Democratic electorate have led many of her supporters to push for a joint ticket. Robert Johnson, founder of Black Entertainment Television and a Clinton backer, this week sent a letter to House Majority Whip James Clyburn asking him to urge the Congressional Black Caucus to push Obama to pick Clinton as a running mate.
``Why take a risk?'' Johnson said in an interview with Bloomberg Television yesterday. ``Senator Clinton delivered voters that Senator Obama did not.''
While Johnson said Clinton ``definitely would like to be vice president if invited,'' Wolfson's statement sought to end talk that she is campaigning for the job. It didn't rule out her accepting the job if offered.
Another Clinton supporter, Lanny Davis, special counsel under President Bill Clinton, has begun an online petition to push for a joint ticket.
Clinton plans to end her campaign, which brought her closer than any woman in history to the U.S. presidency, with an endorsement of Obama tomorrow.
``I have said throughout the campaign that I would strongly support Senator Obama if he were the Democratic Party's nominee, and I intend to deliver on that promise,'' Clinton, 60, said in an e-mail to supporters early yesterday.
June 6 (Bloomberg) -- Billionaire Carl Icahn said Yahoo! Inc.'s board should ``stop dancing around'' and offer to sell the Internet company to Microsoft Corp. for $49.5 billion, or 11 percent more than the software maker's original bid.
Icahn, who threatened to oust directors if they didn't reach a deal with Microsoft, escalated a spat with Yahoo Chairman Roy Bostock over a severance plan that Icahn says drove its suitor away. He suggested a price of $34.375 a share, compared with the $31 Microsoft offered in January.
``I again call upon you to honor your fiduciary duty to your shareholders,'' he said in a letter to Bostock released today.
Icahn, backed by shareholders such as hedge-fund manager John Paulson and BP Capital LLC Chairman T. Boone Pickens, contends a combination is the only way the two companies can compete with Google Inc., the leader in Internet search traffic. Icahn criticized Chief Executive Officer Jerry Yang's efforts to complete an alternative transaction with Microsoft, saying he will refuse to negotiate a deal worth less than $33 a share.
``Icahn is saying to Microsoft, `You want to be in the advertising business, you need to buy the entire Yahoo company,''' ICAP analyst Sachin Shah said in an interview. ``A full acquisition is in the best interest of both companies.'' Jersey City, New Jersey-based Shah advises investors to buy Yahoo stock and doesn't own any.
Yahoo fell 5 cents to $26.31 at 12:11 p.m. New York time in Nasdaq Stock Market trading. The stock had risen 13 percent this year before today. Redmond, Washington-based Microsoft dropped 28 cents to $28.02.
Yahoo's Response
Yahoo responded today by saying that Icahn's suggestion to publicly offer itself up is ``ill-advised,'' and that the company is open to any deal, including a takeover by Microsoft, if it's in the best interest of investors.
Microsoft spokesman Frank Shaw declined to comment.
Icahn, who owned 10 million shares of Yahoo and options to buy an additional 49 million as of May 15, has claimed that the board sabotaged Microsoft's attempts to take over the company. His nominees for Yahoo's board, up for re-election Aug. 1, include himself and former Viacom Inc. chief Frank Biondi Jr.
In today's letter, Icahn accused Yang of using an employee severance plan to deter Microsoft, saying the move would have cost the software maker a ``staggering $2.4 billion'' if it had pursued a bid at $35 a share.
``You neglected to mention that the true cost to an acquirer may be even higher as the perverse change in control severance incentives may diminish the work effort of Yahoo employees,'' Icahn said.
Microsoft's initial cash-and-stock bid was 62 percent more than Yahoo's stock price at the time. CEO Steve Ballmer later offered as much as $33 a share, which Yang deemed to low, prompting Microsoft to scrap the bid May 3.
Bad Economics
Buying Yahoo would have helped Microsoft triple its share of U.S. Web searches, fueling revenue from Internet advertising. That still wouldn't be enough to wrest the lead from Mountain View, California-based Google, which controls almost two-thirds of Internet queries in that country.
``After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us,'' Ballmer, 52, said in a letter to the company.
Microsoft said later that it would pursue an alternative transaction with Yahoo and reserved the right to eventually attempt another takeover. Icahn, 72, said that if he gains control of the board, he will cut off talks on alternative transactions unless they guarantee investors will get at least $33.
Google Partnership?
If Microsoft fails to renew its advances, he plans to seek a partnership with Google on Web searches, as long as the agreement wouldn't prevent Yahoo from a merger with the software maker later.
Icahn has a mixed record in proxy fights. His effort to break up Time Warner Inc. failed in 2006, while earlier this year he successfully pushed software maker BEA Systems Inc. to accept an $8.5 billion takeover offer from Oracle Corp.
The investor said he will replace Yang if he gets control, moving him back to the Chief Yahoo role he held while former CEO Terry Semel was in place. Yang co-founded Yahoo more than a decade ago when he and David Filo created ``Jerry and David's Guide to the World Wide Web'' as graduate students at Stanford University.
June 6 (Bloomberg) -- Crude oil more than $7 rose to a record as the dollar weakened after the U.S. unemployment rate grew the most in two decades and Morgan Stanley said prices may reach $150 within a month.
Oil may ``spike'' because ``Asia is taking an unprecedented share'' of Middle East exports, Morgan Stanley analyst Ole Slorer wrote. The dollar weakened against the euro after the unemployment rose to 5.5 percent, signaling the Federal Reserve may be reluctant to increase interest rates. Oil also rose after an Israeli minister said an attack on Iran may be necessary.
Oil is ``being used as a hedge by speculative buyers for the weakened dollar,'' said Gary Adams, vice chairman of oil and gas consulting at Deloitte & Touche LLP in Houston. `We are seeing that the price will continue to go up as investors look for alternatives.''
Crude oil for July delivery rose $7.58, or 5.9 percent, to $135.37 a barrel at 1:07 p.m. on the New York Mercantile Exchange after touching a record $135.60. Oil yesterday advanced $5.49, or 4.5 percent, to $127.79 a barrel.
If oil settles at the current price it would be the biggest two-day gain in percentage terms since December 2001, and the biggest dollar gain since trading began in 1983.
Shaul Mofaz, Israel's transportation minister and a contender for the post of prime minister, told the Yediot Ahronot daily newspaper that Israel will have to attack Iran if it doesn't abandon its nuclear-development program.
``The Iranian risk premium which had left the market for some time is likely to return and hover over the market in the next few weeks,'' said Antoine Halff, head of energy research at Newedge USA LLC in New York. ``The knee jerk reaction to the comments by Mofaz will wear off quickly because Israel would not broadcast its intention in this fashion.''
Brent Oil
Brent crude oil for July settlement rose $6.31, or 5 percent, to $133.85 a barrel on London's ICE Futures Europe exchange. Prices reached a record $135.14 on May 22.
The dollar weakened against the Euro today after the Labor Department said U.S. payrolls fell by 49,000 after a 28,000 drop in April. The jobless rate increased by half a point to 5.5 percent, the biggest increase since 1986 and higher than every forecast in a Bloomberg News survey.
The dollar decreased 0.9 percent to $1.5728 per euro at 12:08 p.m. in New York, from $1.5593 yesterday.
Unemployment Increase
Rising unemployment ``is going to lead to a drop in the dollar and higher commodity prices,'' said Phil Flynn, a commodities trader for Chicago-based Alaron Trading. The Fed will be ``less aggressive in raising interest rates.''
The dollar fell against the euro yesterday after European Central Bank President Jean-Claude Trichet said the bank may raise rates next month.
Oil has risen to records this year partly because investors have turned to commodities as a hedge against the weakening dollar.
Current shipping patterns suggested that U.S. benchmark West Texas Intermediate crude oil may reach $150 a barrel by July 4, Morgan Stanley's Slorer said in his report.
BNP Paribas SA, France's biggest bank, boosted its 2008 oil outlook by 19 percent to $124 on climbing Asian demand for diesel fuel and kerosene to generate electricity and run buses and trucks.
The market ``is underpinned by demand, which is totally different than 1973 and 1979'' when supply cuts caused prices to surge, said Ray Carbone, president of Paramount Options Inc. in New York. Oil's rise is linked to ``supply and demand. Nobody wants to admit it, too bad.''
Chevron in Nigeria
Workers at Chevron Corp. in Nigeria may strike, a union official said. Chevron has yet to respond to worker demands that the head of the Nigerian unit be replaced, said Ethelbert Uka, treasurer of the Petroleum and Natural Gas Senior Staff Association of Nigeria. Daily production of about 450,000 barrels of crude oil may be threatened, the Lagos-based newspaper Vanguard reported earlier.
Rising oil prices prompted Congress to hold hearings this week on possible energy price manipulation. Congressional leaders are pushing the Commodity Futures Trading Commission, the futures-market regulator, and other agencies to step up efforts to oversee the markets as gasoline as pump prices touch records.
Billionaire investor George Soros told Congress an oil price ``bubble'' is working with fundamentals in the market that may lead to a recession in the world's largest economy.
June 6 (Bloomberg) -- The U.S. lost jobs for a fifth month and the unemployment rate rose by the most in more than two decades, as an influx of students into the workforce drove the biggest jump in teenage joblessness since at least 1948.
Payrolls fell by 49,000 in May, the Labor Department said today in Washington. The jobless rate increased by half a point to 5.5 percent, higher than every forecast in a Bloomberg News survey. The surge in youth unemployment exacerbated losses in every category except Hispanics.
Factories, builders and retailers axed workers last month; UAL Corp.'s United Airlines, truck-engine maker Cummins Inc. and bookseller Borders Group Inc. are among those announcing cuts this week as businesses try to survive the slowdown. Treasuries rose while stocks and the dollar slid after the report.
``This is an ugly report on the labor market,'' said Allen Sinai, chief economist at Decision Economics Inc. in New York. ``Most of the economy looks in recession.''
Ten-year Treasury yields dropped to 3.94 percent at 12:20 p.m. in New York, from 4.04 percent late yesterday. The Standard & Poor's 500 stock index fell 1.7 percent to 1,379.36.
Revisions subtracted 15,000 from payroll figures previously reported for March and April.
Economists had projected payrolls would drop by 60,000 after a previously reported 20,000 decline the prior month, according to the median of 79 forecasts in a Bloomberg News survey. The jobless rate was forecast to rise to 5.1 percent.
Fed Outlook
The Federal Reserve has already incorporated forecasts for rising unemployment into its projections. Chairman Ben S. Bernanke this week signaled that officials are done for now with lowering interest rates, warning about the danger of a jump in public expectations for inflation.
``I'd be surprised if the Fed lowered interest rates yet another notch in response to the 5.5 percent unemployment rate,'' Edmund Phelps, winner of the 2006 Nobel Prize for economics and a professor at Columbia University, said in an interview today.
Former St. Louis Fed President William Poole said today that the increase in joblessness ``makes the Federal Reserve's job much more difficult.'' Given increases in consumer prices, ``what concerns me is the Fed has not been speaking of the possibility of a necessity of rate tightening policy despite'' the weakening economy, Poole said in an interview with Bloomberg Radio.
Political Reaction
The Democratic and Republican candidates for president expressed concern about the surge in unemployment and touted their economic proposals to help spur the economy.
``Today's jobs report is deeply troubling,'' Democratic Senator Barack Obama of Illinois said in a statement. He said the figures underscored the need for his proposed reduction in taxes for middle-income earners. Republican Senator John McCain of Arizona urged lawmakers to pass legislation helping to stem home foreclosures.
The unemployment rate, the highest since October 2004, reflected an expansion of the workforce, led by teenagers. The increase in the rate was the biggest since February 1986.
Some of the increase in youth unemployment may reflect an earlier end to the school year than incorporated in the Labor Department's seasonal-adjustment calculations, economists said.
Young people are ``swelling the labor pool, but they're also leading to a higher unemployment rate,'' said Roger Kubarych, chief U.S. economist at Unicredit Global Research in New York, in an interview with Bloomberg Television. ``It used to be you stayed in school until the middle of June, late June.''
Seasonal Impact
Lehman Brothers Holdings Inc. economists estimated the unemployment rate may drop back by 0.1 or 0.2 percentage point in June because of the seasonal-adjustment effect. David Resler, chief economist at Nomura Securities International in New York, said the May rate was as much as 0.3 percentage point higher because of the school-year impact.
A loss of jobs is one of the criteria used by the National Bureau of Economic Research to determine when recessions begin and end. The group, the official arbiter in the U.S., defines contractions as a ``significant'' decrease in activity over a sustained period of time. Changes in sales, incomes, production and gross domestic product are also considered.
Payrolls shrank by 324,000 workers in the first five months of the year. In 2007, the economy generated 91,000 new jobs a month on average.
Factory payrolls fell 26,000 after declining 49,000 in April. Economists had forecast a drop of 40,000. The decrease included a loss of 7,500 computer and electronics manufacturing jobs. Auto factories added 4,400 workers.
GM Cuts
General Motors Corp. has said 19,000 workers, or about 26 percent of its union workforce, accepted the latest offer to leave, and most of those will stop working by July 1. Ford Motor Co. will trim salaried-employee costs by 15 percent by eliminating contract workers and not filling open jobs.
The protracted housing slump and resulting collapse in subprime lending were also reflected in today's report. Payrolls at builders fell 34,000 after decreasing 52,000. Financial firms pared payrolls by 1,000, after a gain of 1,000 the prior month.
Service industries, which include banks, insurance companies, restaurants and retailers, added 8,000 workers after increasing by 72,000 in April. Retail payrolls decreased by 27,100 after a drop of 38,700.
Government payrolls increased by 17,000 after a gain of 12,000, indicating the total decline in private payrolls was 66,000.
Confidence Falls
Consumer confidence last month sank to the lowest level in more than 15 years as the employment outlook deteriorated, according to a report from the Conference Board, a New York research group.
The average work week was unchanged at 33.7 hours and the factory work week also remained unchanged at 41 hours. Overtime decreased to 3.8 hours from 4 hours. That brought the average weekly earnings up by 0.3 percent to $604.58 last month.
Workers' average hourly wages rose by 5 cents, or 0.3 percent, to $17.94. Economists surveyed by Bloomberg had forecast a 0.2 percent increase from the prior month.
Declines in employment signal consumer spending, which grew in the first quarter at the slowest pace since the 2001 recession, will keep slowing.
``The customer is clearly under pressure when it comes to higher gas and food prices,'' Thomas Schoewe, chief financial officer at Wal-Mart Stores Inc., told reporters yesterday.
Wal-Mart, the world's largest retailer, and Costco Wholesale Corp. yesterday said sales climbed more than analysts estimated as shoppers sought discounts to offset soaring food and fuel bills.
Airlines are getting throttled by higher fuel costs.
``The airline industry is in a crisis,'' Continental Airlines Inc. Chief Executive Officer Larry Kellner and President Jeff Smisek said in a memo to the Houston-based carrier's employees. The reductions ``are necessary to secure our future.''
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