With the US debt ceiling issue now in the rear-view mirror, market focus has shifted squarely to the upcoming Federal Open Market Committee meeting on June 14, and whether the Federal Reserve will pause or raise interest rates by another 25 basis points.
At the May meeting, Fed chairman Jerome Powell indicated that the central bank had likely done enough to warrant a pause in June to allow more time to assess incoming data, after an unprecedented 500bp in rate hikes in a little over a year and amid uncertainty over the impact of tighter lending standards at midsized banks.
Despite a consensus at the start of the year that the US would enter a recession in 2023, the economic data has proved remarkably resilient as we approach the halfway point, complicating the Fed’s decision making.
Watch: US averts first default as Congress passes debt deal
On Friday, the May employment data once again confounded expectations with a blowout 339,000 new jobs added, and upwards revisions to the March and April figures as well.
The US labour market appears to be showing little sign of softening, barring the increase in the unemployment rate from 3.4 per cent to 3.7 per cent last month. Job openings increased again in April and initial jobless claims also tracked lower in May.
At first glance, these strong labour market indicators are at odds with widespread reports of redundancies at technology companies that have hit the headlines in the past few months.
However the detailed non-farm payrolls data show that the number of jobs in the information sector, which would cover most of the tech jobs, fell by 9,000 in May.
Another 2,000 jobs were lost in manufacturing, which is also consistent with recent survey data showing weakness in the manufacturing sector.
This has been more than offset by strength in the services sector, which is also reflected with the May payrolls data – the bulk of new jobs last month was in services, particularly health care and social assistance, professional and business services, and transportation and warehousing.
The tight labour market has undoubtedly been a key factor in supporting overall household consumption spending in the US, even in the face of higher borrowing costs and elevated inflation.
Inflation-adjusted personal spending growth is still above 2 per cent year-on-year and, notwithstanding the rise in credit card debt, consumer balance sheets are still healthy.
San Francisco Fed researchers estimate there is still about $500 billion of excess savings held by US households, which could continue to support consumer spending through to the end of this year.
Against this backdrop, it is perhaps unsurprising that inflation has proved stickier than expected.
While the headline Consumer Price Index has indeed slowed to 4.9 per cent in April from 6.4 per cent at the start of the year – and the peak of more than 9 per cent in June 2022 – this has largely been due to slower food (and other goods) inflation and lower energy prices compared with a year ago.
However, core inflation, which excludes volatile food and energy prices, remains relatively high at 5.5 per cent, almost unchanged since January.
Housing costs, in particular, have continued to rise at a sustained pace so far this year, and transport services inflation remains in the double digits.
While the Fed’s preferred inflation benchmark (the core Personal Consumption Expenditure deflator) is slightly lower at 4.7 per cent, this has also barely budged since January and remains well above the 2 per cent target.
There is then a case to be made for the Fed to raise rates again at the June meeting, and the market is now pricing a 30 per cent probability of a 25-basis-point hike this month.
However, the weakness in the household survey, which indicated 310,000 jobs lost last month and a rise in the unemployment rate to 3.7 per cent, will likely give the Fed enough reason to pause, particularly if the May inflation data shows a further moderation in both headline and core inflation, as is expected.
Khatija Haque is chief economist and head of research at Emirates NBD
UAE currency: the story behind the money in your pockets
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
UAE currency: the story behind the money in your pockets
Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Mohammed bin Zayed Majlis
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20electric%20motors%20with%20102kW%20battery%20pack%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E570hp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20890Nm%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERange%3A%3C%2Fstrong%3E%20Up%20to%20428km%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C700%2C000%3C%2Fp%3E%0A
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
INFO
Everton 0
Arsenal 0
Man of the Match: Djibril Sidibe (Everton)
FA Cup fifth round draw
Sheffield Wednesday v Manchester City
Reading/Cardiff City v Sheffield United
Chelsea v Shrewsbury Town/Liverpool
West Bromwich Albion v Newcastle United/Oxford United
Leicester City v Coventry City/Birmingham City
Northampton Town/Derby County v Manchester United
Southampton/Tottenham Hotspur v Norwich City
Portsmouth v Arsenal
Poacher
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ERichie%20Mehta%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Nimisha%20Sajayan%2C%20Roshan%20Mathew%2C%20Dibyendu%20Bhattacharya%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Killing of Qassem Suleimani
more from Janine di Giovanni
Company profile
Date started: December 24, 2018
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020
Crops that could be introduced to the UAE
1: Quinoa
2. Bathua
3. Amaranth
4. Pearl and finger millet
5. Sorghum
Married Malala
Malala Yousafzai is enjoying married life, her father said.
The 24-year-old married Pakistan cricket executive Asser Malik last year in a small ceremony in the UK.
Ziauddin Yousafzai told The National his daughter was ‘very happy’ with her husband.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Gulf Under 19s
Pools
A – Dubai College, Deira International School, Al Ain Amblers, Warriors
B – Dubai English Speaking College, Repton Royals, Jumeirah College, Gems World Academy
C – British School Al Khubairat, Abu Dhabi Harlequins, Dubai Hurricanes, Al Yasmina Academy
D – Dubai Exiles, Jumeirah English Speaking School, English College, Bahrain Colts
Recent winners
2018 – Dubai College
2017 – British School Al Khubairat
2016 – Dubai English Speaking School
2015 – Al Ain Amblers
2014 – Dubai College
