US adds 275,000 jobs in February, tops expectations
The US added a more-than-expected 275,000 nonfarm jobs in February but those larger gains were offset by sharp revisions for the prior two months.
Job gains in February, which topped analysts' estimates of about 200,000 for the month, followed downward revisions of 167,000 jobs for the prior two months, leaving January gains at 229,000 and December's at 290,000, the Bureau of Labor Statistics reported. Gains over the 12 months through January averaged 230,000.
The unemployment rate rose to 3.9pc in February, a two-year high, from 3.7pc in January. The jobless rate was 3.6pc in February 2023, near a five-decade low.
"The current trend in payrolls is steady, but a clear downturn is coming," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "It would be no surprise if the Fed waits until June" to begin easing rates.
Futures markets showed about an 82pc probability of rate cuts beginning in June after the report was released, compared with about 75pc prior to the report. Fed policy makers are expected to keep the target range unchanged at a more than two-decade high of 5.25-5.5pc at the 20 March meeting while they seek "greater confidence" that inflation is "sustainably" slowing to their target of 2pc.
Job gains occurred in health care (67,000 jobs), government (52,000), food services and drinking places (42,000), transportation and warehousing (20,000), and construction (23,000). Manufacturing and mining and oil and gas extraction showed little change.
Average hourly earnings were up by an annual 4.3pc in February, down from 4.5pc for the year through January and reflecting easing wage pressures as inflation slows.
By Bob Willis
Related news posts
Australia’s Ichthys LNG to restart liquefaction train
Australia’s Ichthys LNG to restart liquefaction train
Singapore, 26 July (Argus) — The second liquefaction train at Australia's 9.3mn t/yr Ichthys LNG export terminal plans to resume partial operations today, after going off line unexpectedly during 18-19 July, according to traders. The export facility is operated by Japanese upstream firm Inpex. Repairs at the affected train could take up to a month before it returns to full production, although the train is expected to restart by this weekend, according to market participants. Attempts to restart train two could take place by 26 July. Some delays to deliveries from the facility are expected, although there are also unconfirmed reports that up to two cargoes may have already been cancelled at the time of writing. The overall impact on the market is likely to be limited for now, with continuing weak spot demand from northeast Asian importers. Some term buyers previously requested for their deliveries to be deferred, traders said, although it is unclear just how many requests for deferment were received. But other participants have pointed out that the winter restocking season could soon start and any further impediments to train two's restart could lift prices. Recent temperatures in Japan have been higher than expected, with at least a 70pc probability of above-normal temperatures over the vast majority of the country until 23 August, according to the latest forecast issued by the Japan Meteorological Agency on 25 July. At least one Japanese utility may be considering spot purchases for August, owing to higher-than-expected power consumption because of warmer temperatures. But at least two other Japanese firms could be looking to sell a September and an October cargo each, traders said, which could indicate that the spot market is still sufficiently well-supplied to cope with additional demand from Japanese utilities. The 174,000m³ Grace Freesia departed from Ichthys on 25 July after loading an LNG cargo, according to ship tracking data from Kpler. The export terminal sold a spot cargo for loading over 2-6 June at around high-$9s/mn Btu through a tender that closed on 10 May, but further details are unclear. The US' 17.3mn t/yr Freeport export terminal also faced issues restarting since it was first taken off line on 7 July as a precautionary measure against Hurricane Beryl. The terminal loaded its first cargo on 21 July . All three trains are likely to be back on line as of 26 July, although production at the facility should still be closely monitored, traders said. By Naomi Ong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Blast furnace works cut S Korea's Posco 2Q steel output
Blast furnace works cut S Korea's Posco 2Q steel output
Singapore, 26 July (Argus) — South Korean steelmaker Posco reported lower crude steel output and sales in the second quarter because of refurbishments at its Pohang blast burnace, but a higher operating profit. Posco's crude steel production dropped to 8mn t over April-June, from 8.66mn t in the first quarter and 8.85mn t a year earlier, the company said in an earnings call on 25 July. Sales volume also dipped to 7.86mn t, from 8.23mn t in the previous quarter and 8.48mn t a year earlier. The firm's utilisation rates fell to 79.1pc in the second quarter, from 85.6pc in the first quarter and 87.3pc a year earlier. Posco began maintenance and modernisation of its No.4 blast furnace at Pohang in late April, which has a capacity of around 5.3mn t/yr. But production resumed at the end of June, raising its scrap consumption as reflected in its resumption of regular weekly purchases of Japanese scrap after a three-month halt. The group's combined steel revenue, including Posco and overseas steel facilities, stood at 15.4 trillion won ($11.1bn) in the second quarter. This was largely steady from the previous quarter but down from W16.5 trillion a year earlier. Combined steel operating profit stood at W497bn in the second quarter, up from W339bn in the first quarter, but less than half of W1 trillion a year earlier. Posco reported higher mill margins as the cost of raw materials dropped and sales price increased. But overseas upstream operations reported losses given an influx of cheap imports into the southeast Asian market and lower sales prices. Battery, other expansion plans Revenue from secondary battery unit Posco Future M fell by 20pc on the quarter and 23pc on the year to W915bn. Operating profit stood at W3bn, down from W38bn a quarter earlier and W52bn a year earlier. Posco, while citing a difficult battery materials industry over April-June, said during the earnings call that it is "closely monitoring demand fluctuations." The firm will pace its investment, but it will "not lose out" on any opportunity to invest in essential resources such as lithium whose prices have "hit rock bottom." Posco flagged the approaching US presidential election and shifting strategies of major automakers as factors that will continue affecting the EV supply chain. This was echoed by South Korean battery maker LG Energy Solution , which expects global EV market growth to come in at slightly over 20pc this year, down from 36pc a year earlier. Posco's first domestic lithium hydroxide plant, located at the Yulchon Industrial Complex in Gwangyang, with a capacity of 21,500 t/yr aims to start full operations in February 2025. It will be operated by Posco-Pilbara Lithium Solution, a joint venture between Posco and Australia's lithium miner Pilbara Minerals. The company also expects to finish building a second plant at the same location with similar capacity in September whose full operations will begin in September 2025. Its Argentinian lithium operations will have a total capacity of 50,000 t/yr in the near term, split between phase 1 and phase 2, which will start full operations in April 2025 and June 2026, respectively. Trading firm Posco International also reported that the final stage 4 expansion of its Myanmar offshore gas field will start in July, with about 4mn t/yr of By Tng Yong Li and Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Empire Energy signs deal to sell gas to NT
Australia’s Empire Energy signs deal to sell gas to NT
Adelaide, 26 July (Argus) — Australian independent Empire Energy has signed an agreement to supply the Northern Territory (NT) with gas from its Carpentaria project in the onshore Beetaloo subbasin. Empire will supply NT with up to 25 TJ/d (668,000 m³/d) of gas over 10 years, starting from mid-2025. This equates to an estimated total supply of 75PJ (2bn m3) of gas. The deal includes scope for an additional 10 TJ/d for up to 10 years if production level at the Carpentaria plant exceeds 100 TJ/d. The firm bought domestic utility AGL Energy's dormant 42 TJ/d Rosalind Park gas plant late last yearwith plans to reassemble the facility on site at Carpentaria, subject to a final investment decision on the project. Gas will be delivered to the NT government-owned Power and Water (PWC) via the McArthur River gas pipeline on an ex-field take-or-pay basis, Empire said on 26 July. PWC in April signed an agreement to buy 8.6PJ of gas from Australian independent Central Petroleum , to supply gas-fired power generation and private-sector customers. Low production at Italian energy firm Eni's Blacktip field, offshore the NT, has led PWC to court new supply while providing a new outlet for prospective producers operating within Beetaloo. The largest Beetaloo acreage holder, Tamboran Resources, has revealed ambitious plans for a 6.6mn t/yr LNG plant to be located near Darwin Harbour's two existing LNG projects, using the basin's shale gas resources as feedstock. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South Africa adopts climate change law
South Africa adopts climate change law
Cape Town, 25 July (Argus) — South Africa's president Cyril Ramaphosa has signed into law the country's climate change bill, which sets out a national response to climate change for the first time. The new climate change act will enable the orderly reduction of greenhouse gas (GHG) emissions through the implementation of sectoral emission targets towards South Africa's commitment to reach net zero by 2050. Currently, the country is the 15th largest GHG emitter in the world, according to the World Resources Institute. The law provides policy guidelines to ensure South Africa reaches its nationally determined contribution (NDC) under the Paris climate agreement by assigning individual enterprises carbon budgets and facilitating public disclosure of their progress. In its updated 2021 NDC, the country has undertaken to cut its GHG emissions to 350mn-420mn t of CO2 equivalent (CO2e), equivalent to 19-32pc below 2010 levels, by 2030. The lower end of this range is in line with the Paris Agreement's 1.5°C global warming threshold. To meet this, South Africa will have to achieve a steep decline in coal-fired electricity generation. A carbon tax is seen as a vital component of the country's mitigation strategy, according to the president. "By internalising the cost of carbon emissions, carbon tax incentivises companies to reduce their carbon footprint and invest in cleaner technologies, and also generates revenue for climate initiatives," Ramaphosa said. South Africa's carbon tax was introduced in a phased approach in June 2019 at a rate of 120 rands/t ($7/t) of CO2 equivalent (CO2e) and increased to R134/t of CO2e by the end of 2022. But tax-free allowances for energy-intensive sectors such as mining, and iron and steel, along with state-owned utility Eskom's exemption, implied an initial effective carbon tax rate as low as R6-48/t of CO2e. South Africa's National Treasury is targeting an increase to $30/t of CO2e by 2030. But the extension of phase one from the end of 2022 to the end of 2025, together with an uncertain future price trajectory and lack of clarity on future exemptions, means the effective carbon tax rate is likely to remain well below the IMF's recommended $50/t of CO2e by 2030 for emerging markets. The new climate change act seeks to align South Africa's climate change policies and strengthen co-ordination between different departments to ensure the country's transition to a low-carbon and climate-resilient economy is not constrained by any policy contradictions. It outlines South Africa's planned mitigation and adaptation actions aimed at cutting GHG emissions over time, while reducing the risk of job losses and promoting new employment opportunities in the emerging green economy. The law also places a legal obligation on provinces and municipalities to ensure climate change risks and associated vulnerabilities are acted upon, while providing mechanisms for national government to offer additional financial support for these efforts. The new act formally establishes the Presidential Climate Commission (PCC) as a statutory body tasked with providing advice on the country's climate change response. Among other things, the PCC is developing proposals for a just transition financing mechanism, for which a platform will be launched in the next few months. Over the last three years, South Africa has seen an increase in extreme weather events often with disastrous consequences for poor communities and vulnerable groups. To address the substantial gap between available disaster funds and the cost of disaster response, the government announced in February that it would establish a climate change response fund. At the time of the announcement, Ramaphosa reiterated that South Africa would undertake its just energy transition "at a pace, scale and cost that our country can afford and in a manner that ensures energy security". Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more