Major International Business Headlines Brief::: 08 October 2018

Mon Oct 8 08:42:32 CAT 2018

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Major International Business Headlines Brief::: 08 October 2018

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*  Worried Zimbabweans fill up cars and stockpile goods, bank sees improvement soon

*  Nigeria central bank could alter demands in MTN dispute - governor

*  Zimbabwe puts troubled national airline under administration

*  Nigeria promotes growth plan to investors on New York roadshow

*  Congo Republic approves 2019 budget with GDP growth forecast of 3.7 pct

*  Zambia says open to dialogue with miners over tax increases

*  Britain's CNM plans to relaunch Zambia nickel mine next year

*  IMF expects 4 pct growth in Malawi in 2019, economy performing well

*  MTN receives counterclaim from Nigeria's central bank: MTN lawyer

*  Morocco sells first Islamic bonds

*  Gambling: 'A banking app helped me beat my addiction'

*  China moves to boost liquidity amid US trade war

*  Brexit: Japan 'would welcome' UK to TPP says Abe

*  What's behind Italy's economic turbulence?

*  US jobless rate hits 49-year low of 3.7%

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Worried Zimbabweans fill up cars and stockpile goods, bank sees improvement soon

HARARE (Reuters) - Zimbabwe’s central bank governor sought to reassure the public on Saturday as people again formed long queues to fill up their cars in the capital, with others panic-buying basic goods like cooking oil and sugar.

The panic has been caused by recent changes introduced by the government and a worsening U.S. dollar crunch, but the governor, John Mangudya, told Reuters that people should not be worried and that he expected an improvement in the next 48 hours

“The problem is that we did not explain things. This economy is a sentiment driven economy so we need to communicate more with the society,” he said.

The southern African nation dumped its hyperinflation-wrecked currency in favour of the U.S. dollar in 2009 but a shortage of cash dollars has worsened following a disputed election won by President Emmerson Mnangagwa in July.

Fuel queues started building up this week and on Saturday outlets in Harare had either run out or had long queues as drivers patiently waited for their turn to fill up their tanks.

“I have been here for an hour because the queue is moving slowly. I have no choice because I need the petrol,” said one motorist, who identified himself as Pascal, at a service station in the Avondale suburb in Harare.

At some outlets owned by Total, attendants only served motorists with pre-paid cards. Other outlets refused mobile payments, preferring bank cards and cash.

Zimbabwe spends $80 million on fuel imports every month.

Mangudya told Reuters the fuel shortages had been caused by an introduction of a 2 percent tax on electronic payments last Monday, which meant oil firms would incur weekly bank charges of $400,000 for fuel imports but were not allowed to pass the cost to consumers.

The companies had stopped supplying fuel as a result, Mangudya said, but he added the situation would improve in the next 48 hours because the government on Friday night scrapped the tax on foreign payments.

BASIC GOODS

Zimbabweans were also stocking up on basic goods like rice, cooking oil, sugar and juice.

At some branches owned by Zimbabwe’s biggest grocery chain OK Zimbabwe, management limited sales of sugar, cooking oil and a popular local juice.

“Management reserves the right to limit quantities,” read a notice to customers.

A shortage of U.S. dollars in banks has forced importers to purchase them on the black market, which has pushed up premiums and the price of imports.

On the black market, the premium for the U.S. dollar spiked to a new record on Saturday, reaching 165 percent from 120 percent on Monday, traders said.

That means buying $100 in cash via a bank transfer cost $265, up from $220 earlier this week.

The situation has not been helped by Mangudya’s decision early this week to order banks to open accounts for clients who earn foreign currency and separate their money from dollars in the local banking system, known as “Zollars”.

Analysts said the move effectively makes the dollar surrogates Zimbabwe’s de-facto local currency.

There are $9.3 billion of Zollars in banks compared to $200 million in reserves, official data showed, a mismatch that creates a premium for the U.S. dollar and fans the black market.

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Nigeria central bank could alter demands in MTN dispute - governor

LONDON (Reuters) - The Nigerian central bank may alter the amount it has ordered South African telecoms firm MTN to repatriate as part of a dispute, central bank governor Godwin Emefiele said on Sunday.

“I don’t think it will be staying at $8.1 billion,” Emefiele said during a visit to London. “This issue will be dealt with amicably and equitably.”

Emefiele said the central bank had received documents from MTN and four banks involved in the case. “The central bank will be examining these, then it will be escalated up to my level,” he said.

He said he expected to get the results in a couple of weeks.

The central bank filed a counter-claim on Friday to a court request by MTN, which is seeking to stop the bank from forcing it to bring back the money, according to MTN’s lawyer.

Emefiele also said Nigeria’s central bank would continue to intervene in the foreign exchange markets, adding that he believed in a stable exchange rate regime. Nigeria’s current stance of monetary tightening would continue, he said.

Zimbabwe puts troubled national airline under administration

HARARE (Reuters) - Zimbabwe has appointed an independent administrator to run its loss-making national airline to try and revive its fortunes, according to an official notice.

Air Zimbabwe has been struggling with a $300 million debt, including to foreign creditors. Only three of its planes are operational, with another three grounded, which has forced it to abandon international routes.

Justice Minister Ziyambi Ziyambi appointed Harare-based chartered accountant Reggie Saruchera as administrator with powers to “raise money in any way without the authority of shareholders for the purposes of the reconstruction,” according to a government gazette published late on Friday.

Finance Minister Mthuli Ncube said on Friday the government was hoping to sell stakes in Air Zimbabwe and other state-owned companies under a package of reforms - though the airline has failed to attract private investors in the past.

The government said in April it had bought two Boeing 777 aircraft and an Embraer plane from Malaysia but added that the planes would be leased to a new local airline until Air Zimbabwe returned to profitability.

Nigeria promotes growth plan to investors on New York roadshow

ABUJA (Reuters) - Nigerian government officials met with fund managers in New York last week on a non-deal roadshow held to update bondholders on the country’s growth plan after getting out of recession, an investor presentation seen by Reuters on Saturday showed.

The economy recovered from its worst downturn in a quarter of a century last year, but growth is still fragile. The government is trying to diversify its revenue away from an over-reliance on global oil prices to greater tax collection.

The government sees growth of 4.6 percent by 2020 from the 1.5 percent achieved in the first half, by boosting local production, investing in infrastructure and creating jobs. Nigeria’s economy grew just 0.8 percent in 2017.

Zainab Ahmed, who took over as finance minister after Kemi Adeosun resigned last month, was joined by Central Bank Governor Godwin Emefiele, the head of the debt office and the budget and trade ministers for the meeting on the sidelines of the United Nations General Assembly on Sept. 27.

“We simply used the opportunity of the presence of senior members of the economic management team at United Nations General Assembly to meet with investors and analysts,” Patience Oniha, director general of the Debt Management Office, told Reuters.

Asked whether the meeting came ahead of a possible bond sale, Oniha said: “Not at all.”

Emefiele told investors Nigeria would continue to welcome foreign investment and that the bank was engaging with MTN after it said the South African telecoms firm had moved $8.1 billion out of Nigeria illegally, with a view to finding a solution.

The West African country wants to raise $2.8 billion of debt offshore as part of its 2018 budget of 9.12 trillion naira, but the government needs approval from parliament before going ahead with bond sales.

Parliament resumes on Tuesday after political parties on Oct. 7 pick their candidates for next February’s presidential election, when President Muhammadu Buhari plans to run for a second term.

Nigeria has said it would borrow more abroad even as interest rates rise in the United States, which could see it pay more than on its most recent debt sale, held in February.

It wants foreign debt as a percentage of its total borrowing to hit 40 percent by next year from 30.2 percent in the first half of this year, the presentation showed.

Congo Republic approves 2019 budget with GDP growth forecast of 3.7 pct

BRAZZAVILLE (Reuters) - Congo Republic’s government said on Saturday it plans to raise spending next year to 2.3 trillion CFA francs ($4.06 billion) compared with 1.6 trillion CFA francs in 2018.

In a statement announcing the budget proposal, government spokesman Thierry Moungalla forecast that the economy would grow 2 percent this year and 3.7 percent in 2019.

Congo’s economy is recovering after it was hit hard by low crude oil prices as it struggled under the weight of more than $9 billion in debt, which exceeds its gross domestic product (GDP). That forced the African nation to seek a bailout from the International Monetary Fund.

Its creditors, which include commodity trading houses Trafigura and Glencore PLC, are keenly watching for signs of an improvement to the country’s economic fortunes.

In July, the central African country reported a rebound in economic growth in the first quarter to 1.9 percent, following a 2.6 percent decline for all of 2017, due to improved oil prices and production.

($1 = 566.2000 CFA francs)

Zambia says open to dialogue with miners over tax increases

LUSAKA (Reuters) - Zambia’s Finance Ministry said on Sunday that it was open to dialogue with mining companies over the government’s plans to increase mining taxes.

Africa’s second-largest copper producer said late last month that it would introduce new mining duties and increase royalties to help bring down mounting debt.

Large miners such as First Quantum, Glencore and Vedanta Resources have often criticised the Zambian government over rising costs at their operations.

“We remain open to dialogue with mining companies that are willing to amicably discuss the transition to the new mining tax regime,” a Finance Ministry statement quoted minister Margaret Mwanakatwe as saying.

The statement said a tax policy review committee would be appointed to deal with technical issues related to the tax changes and that the ministry had taken note of criticism by Zambia’s Chamber of Mines.

The Chamber of Mines said this week that some companies had already scrapped expansion plans over the tax hikes and that the country’s copper output could fall.

The tax increases are part of government efforts to trim the fiscal deficit to 6.5 percent of gross domestic product in 2019 from 7.4 percent this year.

Mining accounts for more than 70 percent of Zambia’s foreign exchange earnings.

Concerns about Zambia’s rising debt, alongside accusations of additional hidden borrowing and government corruption, have spooked investors and Western donors in recent months.

The International Monetary Fund has put on hold talk about an aid package due to Zambia’s debts, which it describes as unsustainable.

Britain's CNM plans to relaunch Zambia nickel mine next year

LUSAKA (Reuters) - British firm Consolidated Nickel Mines (CNM) plans to restart production at Zambia’s Munali nickel mine in the first quarter of next year, its local subsidiary said on Saturday.

The decision to restart output at the mine comes despite plans by the government to hike mining taxes to bring down mounting public debt.

The tax increases in Africa’s second-largest copper producer have been strongly criticised by mining firms, which say they will hobble the industry.

The Munali mine was placed on care and maintenance at the end of 2011 due to low nickel prices and poor operational performance.

CNM’s local subsidiary, Mabiza Resources Ltd, said in a statement that it had developed a new geological model and mining method that would enable it to extract nickel from the ore body at Munali more efficiently.

“These changes have the potential to reduce operating costs to make the mine economical at low nickel prices,” the statement said, adding that finance of around $40 million had been secured to restart the mine.

The Munali mine, which is 75 km (45 miles) south of the Zambian capital Lusaka, was expected to produce around 56,000 tonnes of nickel concentrate in 2011.

IMF expects 4 pct growth in Malawi in 2019, economy performing well

BLANTYRE (Reuters) - The International Monetary Fund (IMF) said it expected Malawi’s economy to grow by around 4 percent in 2019, followed by a rise to 6-7 percent over the medium term.

In a statement on Friday, the IMF said Malawi was performing well under a three-year $112 million loan facility agreed earlier this year to help the southern African country reform its economy.

“Malawi’s economy continues to grow while inflation remains on a declining trend,” the statement read.

Malawi, which is heavily reliant on foreign funding, has restored economic stability after donors froze budgetary support over a corruption scandal.

Around a third of the country’s $3.5 billion public debt is external.

The IMF said key reform areas for Malawi were to improve debt management and public financial management. Fiscal policy should focus on ways to restore the budget balance after spending overruns last year, it added.

In a sign of lingering economic pressures, Malawi’s energy regulator said on Saturday that fuel prices would rise by an average of 5 percent. The regulator ran out of funds used to cushion consumers from fuel price rises earlier this year.

Malawi is a net importer of fuel and other essential goods, such as fertilizer and pharmaceuticals.

MTN receives counterclaim from Nigeria's central bank: MTN lawyer

ABUJA (Reuters) - MTN has received a counterclaim from Nigeria’s central bank to its request for an order to stop the bank forcing it to repatriate $8.1 billion it claims was illegally sent out of the country, the South African telecom’s lawyer said on Friday.

MTN has received the central bank’s response to its court filing, Wole Olanipekun said, adding that MTN will file a reply to the bank’s claim.

The central Bank of Nigeria (CBN) in August ordered MTN and its lenders to bring back the funds which it alleged the company had sent abroad in breach of foreign exchange regulations.

“MTN had gone to court, sued the central bank and the attorney general. The central bank has filed a response and a counter claim, meaning that nobody can resort to self-help in the matter any longer,” Olanipekun told Reuters.

“With this development everybody has now surrendered ... the greviances to the court. Everybody has to wait for the decision of the court.”

CBN spokesman Isaac Okorafor said: “Although there’s a case in court, the CBN is aggressively engaging MTN and the banks and I’m hopeful that an amicable resolution will soon be achieved.”

Morocco sells first Islamic bonds

RABAT (Reuters) - Morocco started selling its first Islamic sovereign bonds worth 1.1 billion dirhams ($116 million) with a five-year maturity on Friday, the finance ministry said.

The sukuk sale was an Ijara issue in local currency with an annual yield of 2.66 percent, the ministry said in a statement later On Friday evening after the end of the subscription period.

Demand was 3.6 times higher than the Sukuk value with subscription orders standing at 3.6 billion dirhams, the ministry said, adding that 28 percent of the orders were processed.

Under this Ijara issue the state will cede for a five-year period the property of real estate assets whose annual rents will go to bondholders, it said.

This issue will help Islamic banks manage liquidity and resources, the ministry said.

Morocco has allowed five Islamic banks and three windows to offer Sharia-compliant banking services in the country since early last year.

Morocco is the most advanced among its North African neighbours in developing Islamic finance, which avoids interest and pure monetary speculation.

Gambling: 'A banking app helped me beat my addiction'

Tens of thousands of people have signed up to a new service from two mobile-only banks designed to help problem gamblers. One former addict says this "gambling block", available on the banks' apps, helped him beat his addiction.

"I'd be setting my alarm to wake up at 4am to do a first bet," says Danny Cheetham, who began placing bets in his early 20s.

"I'd plan my route to work so I could call in to a bookies which opened early for commuters."

Danny, who is now 29, found himself betting in bookies, on slot machines and online. He gambled a lot on football, which he doesn't even like.

He began relying on overtime from work and on payday loans. In the course of eight years, Danny, who's from Stockport, estimates he lost more than £50,000.

He sunk into depression and moved in with his dad as he could not afford to pay rent.

It was the death of his mum Christine in 2015 that he says was the turning point for him - but he was not able to kick his habit until he signed up to a gambling block with his bank, Monzo. The so-called challenger bank is a mobile-only version of a traditional bank.

Once the block is activated by the customer, it can spot any transaction that person might try to make with bookmakers - either online or in a shop - by using merchant category codes. It instantly stops the transaction from happening, before any money has left that customer's account.

If a customer is tempted to place a bet in the heat of the moment, there is a 48-hour cooling-off period before the block is switched off. There is also a daily limit on cash withdrawals.

Gambling addiction: The facts

430,000 problem gamblers in Britain

Two million people "at risk"

Harm can include higher levels of physical and mental illness, debt problems, relationship breakdown and, in some cases, criminality

Source: Gambling Commission

Monzo CEO Tom Blomfield says the block was introduced because customers asked for it.

"We have a team of people who work with vulnerable customers and they were getting this feedback quite often" he says.

More than 25,000 customers have signed up to the bank's block since it went live in June.

"Not all of those were problem gamblers [but] about 8,000 people did have a history of gambling," says Mr Blomfield.

"We've... seen a 70% decline in their gambling transactions so [it's made] a really big impact."

Another challenger bank, Starling, is offering a similar type of block. It's gained 20,000 users since its launch in June.

The Royal College of Psychiatrists is calling on the big five high street banks - Lloyds, Santander, HSBC, RBS Group and Barclays - to offer the same type of service.

Doctor Henrietta Bowden-Jones told BBC Radio 4's Money Box: "If you are unable to access funds, this type of gambling block can save people's homes and their families."

The banks say protecting vulnerable customers is a priority and they are always looking at new ways to do that.

The Gambling Commission is talking to financial institutions about how to improve protection for problem gamblers.

Three years on from taking his first steps to beat his gambling addiction, Danny says he is happy.

"And I've actually got money in the bank which I never thought I'd have," he says.

"I'm well on target to being debt-free by my 30th birthday, which is my next one, and I just don't feel depressed or helpless like I used to."

He says he can now think about his future and - although he will have a bad credit file for up to six years - he says this will give him time to save for a deposit for his own place.

"I just don't feel like it's an endless battle any more."--BBC

China moves to boost liquidity amid US trade war

China will cut the amount of cash banks must hold in reserve as part of efforts to support its economy, amid an escalating trade war with the US.

The move will see 750bn yuan ($109bn; £83bn) in cash injected into the financial system.

The US is fighting a trade war with China which threatens the outlook for Chinese manufacturing and exports.

It is the fourth time the country's central bank has cut its reserve requirement this year.

China's central bank said it would cut reserve requirement ratios by 100 basis points from 15 October. These are currently 15.5% for large commercial lenders and 13.5% for smaller banks.

Cutting reserve requirements frees up money for banks to lend to each other and consumers.

US-China trade row: What has happened so far?

The early victims of Trump's trade war

China moves to support economy

The People's Bank of China's move will release 1.2 trillion yuan in liquidity, with 450bn yuan of that due to offset maturing loans - meaning 750bn yuan will be injected into the financial system.

It comes as the US and China have imposed tariffs on one another's goods in a row that is hitting companies and risks hurting the global economy.

The US has imposed tariffs on virtually half of all Chinese imports into the US and has threatened to target all of its imports.

China has retaliated with its own set of tariffs, and has accused the US of launching the largest trade war in economic history.

Neither are showing signs of backing down, with the Trump administration escalating matters with accusations of election meddling and currency manipulation.

The row has hit China's stock market and currency, and there are tentative signs it is affecting China's economy.

"The ongoing China-US trade war is imposing headwind to China's growth, and monetary easing is being used to counter that," DBS said in a research note.--BBC

Brexit: Japan 'would welcome' UK to TPP says Abe

Britain would be welcomed into the Trans-Pacific Partnership trade deal with "open arms" after it leaves the EU, Japan's prime minister has said.

While the UK would lose its role as a gateway to Europe after Brexit, it would retain its "global strength", Shinzo Abe told the Financial Times.

He also urged the UK and EU to use "wisdom" to avoid a no-deal scenario.

The TPP is a trade agreement between 11 countries, including Japan, Canada, Australia and Malaysia.

US President Donald Trump withdrew his country from the agreement last year, soon after entering the White House.

What is the Trans-Pacific Partnership?

Could the UK really join TPP?

Brexit: All you need to know

Mr Abe's comments are likely to be welcomed by Brexit supporters, who argue Britain would be able to strike trade deals more easily outside the EU.

The UK is due to leave the EU on 29 March 2019.

The UK would only be able to join the bloc if it left the EU customs union and was able to set its own tariffs.

In the interview Mr Abe also expressed concern about a no-deal scenario.

"I hope that both sides can contribute their wisdom and at least avoid a so-called disorderly Brexit," he said.

He argued a transition period was essential for Japanese firms, saying, "I truly hope that the negative impact of Brexit to the global economy, including Japanese businesses, will be minimised."--BBC

What's behind Italy's economic turbulence?

The controversy surrounding the Italian government's spending plans has led to continued nervousness on the financial markets.

The budget set out by the country's coalition government last month - which involves greater spending than previously planned - had already sent Italian share prices lower and knocked the value of the euro.

The cost of government borrowing for Italy, represented by the yield (or interest rate) on its bonds (the debt issued by the Italian government), has been rising, demonstrating that investors are getting twitchy.

Markets are concerned that the government's plans mean the country is heading for a stand-off with the European Commission.

Why is the Italian government's financial situation back in the news?

The government that took office after an election in March this year wants to be able to deliver on campaign spending promises. To do that it needs to borrow more than its predecessor was planning.

The government's ambitions to spend more are set against the sober backdrop of Italy's persistently weak economic growth record.

The determination to deliver on their election promises and that weak growth has once again raised questions about the sustainability of the country's debts.

There could also be legal action taken by the European Commission.

What exactly do they want to do?

The coalition government wants to reduce the retirement age, as well as increase spending on welfare and infrastructure. They want to finance it with more borrowing.

How much more?

The plan sent to the European Commission by the last government envisaged borrowing this year equivalent to 1.6% of annual national income (GDP), declining to 0.9% and 0.2% over the next two years.

That would be a budget that is very nearly in balance by the end of the decade.

The coalition is still wrangling over the figures for later years, but for 2019 they are aiming for 2.4%.

Budget makes Italians 'worse off', says EU

But isn't the upper limit for deficits under EU rules 3% of GDP? So what is the problem?

Yes, but there is another rule that total accumulated debt should be no more than 60% of GDP.

Italy has more than twice that amount. One way to get that total debt figure down is a lower deficit.

Couldn't Italy get the debt burden down with stronger economic growth?

In principle, yes. Stronger growth means GDP rises more rapidly so debt as a percentage of GDP declines. But Italy's problem has been one of persistently weak growth. The economy this year is slightly smaller than it was in 2005.

It is this growth problem that lies at the root of the strains on the government finances. Deficits were quite large in some years in the 2000s, but the figure has been 3% or less since 2012.

The debt burden has risen in the last few years because growth has been so weak.

How big is the debt?

In cash terms it's the biggest government debt in the EU at €2.3 trillion ($2.6tn; £2tn). The debt burden as a percentage of annual economic activity is second only to Greece in the EU at 132%.

What about the Italian banks?

Still a problem. Capital Economics, the London consultancy says the banks "remain the country's weakest link".

They own more than a quarter of Italian government debt, so they would be hit hard by a default. Even the rise in bond yields, which means the value of the bonds falls, is bad news for them. They also have high levels of problem loans.

The banks would also be vulnerable o renewed speculation that Italy might leave the eurozone. Deposits would almost certainly be pulled out of Italy in that situation as account holders wanted to avoid having their money converted into a new (or restored) national Italian currency.

That said, the Italian banks have a lot more capital than they did a few years ago which means they have more capacity to absorb losses. And the prospect of Italy quitting the euro has receded.

Have the financial markets been hit?

The starkest impact has been in the bond market, where the government's debt is traded.

The yields on those bonds give some idea of the government's likely future borrowing costs. They rose sharply in the past week.

The figures for Greece are higher, but Italian yields are markedly above the rest of the eurozone, including those countries such as Ireland and Spain that have had bailouts. There have also been impacts on the euro and the share prices of the country's banks.

What is the Armageddon scenario?

There are two. One is a default by the Italian government - a failure to repay debts as they come due. The other is leaving the euro.

Both possibilities were clearly in view at various stages with Greece. But the eurozone came through it. The size of the Italian economy and the government's debt burden mean that it would be much harder to deal with.

But neither is on the horizon with Italy. Although government borrowing is getting more expensive it is much cheaper than the levels seen as triggering the need for a bailout. Italy did get into that territory in the worst phase of the eurozone crisis, but is not close to that now.

There are people in Italy that want to leave the euro, and there is significant sympathy for the idea in the coalition parties. But it is not government policy.--BBC

US jobless rate hits 49-year low of 3.7%

The US unemployment rate fell to 3.7% in September, the lowest rate since December 1969.

Figures from the Department of Labor also showed the US economy created 134,000 jobs during the month, fewer than were expected.

Significant jobs growth was seen in professional and business services, healthcare and construction.

Average hourly earnings rose at an annual rate of 2.8% in September, down from 2.9% in August.

Employment data for July and August were also revised to show an additional 87,000 jobs were created than first reported.

Hurricane Florence, which battered the US East Coast in mid-September, was cited by the Labor Department as a factor for some employment changes, specifically leisure and hospitality, which lost 18,000 jobs in the period.

The Labor Department said it was "impossible to quantify" the hurricane's net effect on employment.

America's missing workforce

An unemployment rate of 3.7% is certainly quite an achievement.

>From the low point in the aftermath of the financial crisis, the number with jobs has increased by almost twenty million.

But the very low unemployment rate also reflects an increase in the number not looking for work - if they are not looking they are not classified as unemployed.

A recent report from the Organisation for Economic Cooperation and Development said that compared to other countries "a large share of the population remains at the fringes of the labour market".

The OECD suggested a number of reasons, including what president Trump and many others have called the opioid crisis - the widespread misuse of and addiction to certain prescription drugs.

Jake Robbins, from Premier Asset Management, said low unemployment is driving wages higher.

"Employers are finding it harder to recruit and having to pay more when they do," Mr Robbins said.

Ian Shepherdson, the chief economist at Pantheon Macroeconomics, predicted that the jobless rate will fall as low as 3.25% by this time next year, strengthening the case for the US Federal Reserve to keep raising interest rates.

"No one at the Fed thinks unemployment near 3% is sustainable," Mr Shepherdson said.

Both economists predict the US Federal Reserve will continue to raise interest rates well into 2019, as better-paid US workers spend more and increase inflationary pressures.

Trade war ignored

The escalating trade war between the US and China does not appear to have affected hiring in factories.

The data showed manufacturing jobs continuing to multiply in September, with 18,000 added, reflecting a gain in durable goods industries. In 2018 so far, manufacturing has added 278,000 jobs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other's goods.

Jobs in professional and business services rose by 54,000 in September and has increased by 560,000 over the year.

Healthcare employment rose by 26,000 in September. For 2018 so far, healthcare jobs have increased by 302,000.--BBC

INVESTORS DIARY 2018

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Skype:         Bulls.Bears 

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