FirstFT: Transatlantic jobs market ‘coming off the boil’

The hiring frenzy that has gripped developed economies since the start of the pandemic is easing as employers worry about rising costs, falling demand and a darkening economic outlook.

On both sides of the Atlantic, unemployment rates remain low but data published in the past week suggested vacancies were falling from historically high levels and companies were growing cautious about taking on staff.

This combination, if it persists, would be good news for central bankers, who are keen to cool wage growth in their battle against high inflation without triggering a surge in unemployment.

“In all advanced economies, we are at peak labour market tightness” — Simon Macadam at consultancy Capital Economics

Central banks in the US and Europe are engaged in the most aggressive rate-raising cycle since the early 1980s to combat soaring prices. Officials are concerned that a rush to attract workers could trigger a 1970s-style wage-price spiral in which inflation lingers for years.

In the US, data released last week showed openings fell at their sharpest rate since the start of the pandemic.

Thanks for reading FirstFT Americas. Now, here is the rest of today’s news — Abby

Five more stories in the news

1. US and Germany call for climate action from World Bank The US and Germany are leading calls from shareholders in the World Bank for an overhaul of its business model to boost action on climate change. US Treasury secretary Janet Yellen last week called on the bank to develop an “evolution road map by December”. Yellen and the US administration have stepped up their pressure on the bank this year.

2. China chip stocks fall as tougher US export controls bite Shares in top Chinese chipmakers shed $7.7bn in market value on Monday, after Washington unveiled new export controls on Friday that restrict the sale of semiconductors made with US technology unless vendors obtain an export licence.

3. Russia strikes Kyiv and other cities after Crimea bridge explosion Kyiv and other major Ukrainian cities came under sustained missile and rocket attacks on Monday, a day after President Vladimir Putin accused Ukraine of terrorism over an attack on a bridge linking the occupied Crimean Peninsula with Russia’s Taman region. At least five people were killed in Kyiv, an adviser to the interior minister said on Telegram.

4. US Republicans pull $1bn from BlackRock The company has lost more than $1bn in asset management business in US Republican states upset with the company’s green investing policies. One analyst said the Republicans’ ESG backlash was “political posturing” ahead of elections in November, adding that BlackRock’s underlying business had not been affected.

5. US banks to set aside $4bn for potential loan losses The biggest US banks will signal their worries about the US economy in third-quarter earnings reports starting next week, with analysts expecting they will collectively provision about $4.5bn to cover potential losses from bad loans.

The day ahead

IMF and World Bank meetings The IMF and the World Bank kick off a week of joint meetings in Washington today. The IMF is expected to downgrade its global economic forecasts this week for the fourth consecutive quarter.

Lael Brainard to make keynote address Lael Brainard, vice-chair of the Federal Reserve board of governors, is set to provide the keynote address, discussing how to restore price stability in an uncertain economic environment, at the 64th annual meeting of the National Association for Business Economics. Chicago Fed president Charles Evans will speak about monetary policy and the US economic outlook during opening remarks at the same NABE meeting, which is taking place in Chicago.

Jobs data After a week of data from the US labour department indicating that domestic job growth is cooling, the Conference Board will release its employment trend index reading for September. Any turning point in the index, which aggregates eight labour market indicators and has hovered around a two-decade high in 2022, is a sign of directional change in job numbers in the months ahead.

What else we’re reading

Elon Musk has Lunch with the FT At Musk’s favourite Mexican restaurant, Fonda San Miguel in Austin, Texas, the Tesla chief talks to FT editor Roula Khalaf about moving to Mars, saving free speech via Twitter — and why ageing is one “problem” that should not be solved.

BoE governor’s week of tough questions in Washington Andrew Bailey will face intense scrutiny as the central bank prepares to end its emergency backstop support for government bonds on Friday. The central bank governor will need to reassure investors that both the market dysfunction is over and that the bank has a grip on inflation.

US economist Jason Furman argues Fed cannot ease up on inflation “Everyone should wake up every morning figuring out how to get paid more, or if they’re running a business how to make more of a profit. And it’s up to the central bank to ensure that, when they’re doing that, their incentives are consistent with inflation being lower.” US economist and former chair of the US’s Council of Economic Advisers spoke with the FT’s chief features writer, Henry Mance — keep reading.

Janet Yellen criticises Opec oil production cuts The US Treasury secretary said the move by Opec+ to cut oil production was “unhelpful and unwise” for the global economy. The Opec cartel agreed on Wednesday to collectively reduce output by 2mn barrels a day, sending shockwaves across energy markets.

How global crises are reshaping agriculture Climate change and surging costs for supplies such as fertiliser are driving a return of the so-called regenerative agriculture movement. Its aim is to make agriculture a solution to the environmental crisis, rather than a leading contributor, by restoring natural ecosystems.

Film

Hollywood was wary of backing a film about African women warriors — but now The Woman King is a big box office hit. Film critic Danny Leigh sits down with director Gina Prince-Bythewood to discuss what it takes to make a successful action movie and promote diversity.