US Jobless Rate Rises To 7.6% as Economy Adds 175,000 Jobs

WASHINGTON -- U.S. employers stepped up hiringin May, a sign the economy was growing modestly but not strong enough to convince the Federal Reserve to scale back the amount of cash it is pumpinginto the banking system.
The United States added 175,000 jobs last month, just above the median forecast ina Reuters poll, Labor Department data showed on Friday.
The unemployment rate ticked a tenth of a percentage point higher to 7.6 percent, with the increase actually giving a relatively hopeful sign as it was driven by more workers entering the labor force.
Still, after a winter in which the economy seemed to be turning a corner, May was the third straight month that payrolls outside the farm sector increased by less than 200,000. That could heighten concerns government austerity this year is sapping vigor from the economy, andmight dampen speculation the Fed might soon trim bond purchases aimed at lowering interest rates and boosting employment.
"The labor market may not be as strong as we thought," Kevin Cummins, an economist at UBS in Stamford, Connecticut, said ahead of the data's release.
Officials at the U.S. central bank have intimated they could be close to reducing bond purchases despite modest economic growth, which is not expected to pickup until late in the year when the sting from government spending cuts begins to fade.
Budget cuts have led to hiring freezes at many government agencies, and attrition could be slowly reducing payrolls. Government payrolls declined by 3,000 in May.
Lasting Damage
About 4.4 million Americans have been unemployed for more than six months, roughly 3 million more than pre-recession levels. The longer workers are out of a job , the greater the risk theybecome essentially unemployable. That could deal lasting damage to the economy and has lent urgency to the Fed's efforts to stimulate growth.
Still, May's pace of job growth is right around the average for the prior 12 months. Over that period, the jobless rate fell about half a percentage point and the ranks of the long-term unemployed declined by about 1 million people.
"It's progress that's too slow,but it's progress nonetheless," Guy Berger, aneconomist at RBS, also in Stamford, said before the data was released.
More: Suicide Rate Jumps, Economy To Blame?
Even the increase in the unemployment rate had a bright side. The share of the population in the labor force -- which includes people who are either employed or looking for work -- rose to 63.4 percent. That was driven by 420,000 workers entering the work force. Thatis good news because some of the recent drop in the jobless rate has been due to workers leaving the labor force, either because they retired, went back to school or gave up looking for a job.
The report showed the length of the average workweek held steady at 34.5 hours, although total hours worked in the economy ticked 0.1 percent higher.
At the same time, U.S. factories are feeling the pinch from Europe's debt crisis, which has sent a chill over the global economy. Manufacturing employment declined by 8,000 jobs last month.
After barely growing in the last three months of 2012, the U.S. economy expanded at a moderate 2.4 percent annual rate in the first quarter but lost momentum as the quarter drew to a close. Most economists look for growth of around 1.5 percent in the current quarter.Fed officials next meet June 18-19 and are widely expected to keep purchasing $85 billion in bonds a month. Many economists don't expect the job market to be strong enough for the Fed to beginscaling back its bond purchases before December.

HOW MONEY TRANSFER IS DRIVING KENYA ECONOMY

HOW MONEY TRANSFER IS DRIVING KENYA ECONOMY
Usage of mobile money transfer is on increase in Kenya day bay day. Some of the operation than by mobile money service include the following
 Paying of electricity and water bills, this days you do not see people lining up in banks just pay the bills.
 Shopping online many companies today in Kenya give their customers to pay for goods or service by paying through mobile money cash transfer. This process operate just like visa.
 Booking of travel ticket today in Kenya major airline services operating in the country allows it customers to pay for their tickets by Mpesa.
Cheap mobile phone being launched in Nairobi my major mobile manufacturers, especially those from china is the key to the success of the project I the country. the four major mobile providers companies in Kenya are;
a) Safaricom through Mpesa service
b) Airtel through Airtel money
c) Orange by Orange money
d) YU by Yucash
Just four months after safaricom launched M-shauri in collaboration with Commercial Bank of Africa a program that allow its customers to save cash or borrow cash. Its recorded massive response from Kenyans. Today it has more than 4 million customer already.
Statistics from Central Bank of Kenya shows that there are 15million bank deposits accounts compared with 24million money transfer accounts.

Peru to prepay up to $1.5 billion in debt to stem the Peruvian sol's

LIMA, Dec 22 (Reuters) - Peru will launch an aggressive plan to prepay up to $1.5 billion in debt in 2013 to try to stem the Peruvian sol's appreciationby soaking up foreign currency in the local market, Finance Minister Luis Miguel Castilla said on Saturday.
"We are going to use and make prepayments of between $1 billion and$1.5 billion in 2013, and this will serve to absorb some of the appreciating pressure that exists in the economy," the minister told a news conference.
Peru's sol closed on Friday at its strongest level in more than 16 years, with a bid price of 2.558 per dollar.
Yield-hungry investors have poured money into emerging markets such as Peru, which has expanded on average by 6 percent a year in the last decade. It currently ranks as South America's fastest-growing economy.
Castilla also raised his forecast for 2013 economicgrowth to 6.3 percent from 6.0 percent previously. The new number matches the government's growth forecast for 2012.
The minister mentioned the possibility of debt prepayment during an interview with Reuters nearly two months ago. He said the debt prepayment was part of a"liability management policy" that seeks to improve and extend the Andean country's debt profile.
Paying foreign bonds early would complement other measures the government has applied to curb the sol's rally, such as raising deposit requirements on bank accounts denominated in dollars or allowing local pension funds to invest more money abroad.
Peru has local and foreigndebt in dollars and soles that are equivalent to about $36.6 billion, or nearly 20 percent of grossdomestic product. About$20 billion is foreign debt,according to the central bank.

World Bank gives Gaza a grant to Improve Water, Services

The $6.4 million World Bank grant in one of the most crowded areas where there’s a “critical deterioration of the Gaza water system” will be augmented by $11.1 million in financing from the Islamic Development Bank , the Washington, D.C.-based organization said in a statement.
“We are concerned aboutthe lack of clean water supply and the deterioration in the quality of water resourcesin the Gaza Strip, one of the most densely populated areas on Earth,” World Bank West Bank and Gaza director Mariam Sherman said. The population of Gaza is 1.6 million.
Gaza’s groundwater is over-utilized, badly contaminated and ‘‘the over-drafting of the sole aquifer is causing a decline of the groundwater table and a deterioration of water quality,’’ the World Bank said. ‘‘Most sewage is returned to lagoons, wadis and the sea. The area is now choked with untreated sewage, threatening Palestinian health and life as well as remaining water resources and the environment.’’
The funds will help construct water tanks to collect and blend water from different sources to improve the quality and efficiency of Gaza water and wastewater and to connect major well fields supplying Gaza’s middle and southern areas, it said. Water distribution networks will also be upgraded.

Manchester United revenue not impressive, but manage to minimixe debt

LONDON (Reuters) - A strong start to the season andnew sponsorship deals have reinforced English Premier League soccer club Manchester United's confidence it will hit this year's financial targets despite lower first-quarter earnings.
United, English champions a record 19 times, said they had cut debt to 360 million pounds ($572 million), down 17 percent from a yearearlier, after a listing on the New York Stock Exchange in August that left the American Glazer family firmlyin control of the club.
A vocal section of United supporters have argued that the cost of servicing debts following the Glazers' 790 million pounds leveraged buyout of the club in 2005 have hampered its ability to compete with rival clubs at home and abroad.
"We have been very pleasedat how the year has started both on and off the pitch," executive vice chairman Ed Woodward told analysts on aconference call.
"Based on our first-quarter results and current visibility we remain confident that we can achieve our previously stated targets for fiscal 2013 -- revenue between 350 and360 million pounds and adjusted EBITDA of 107-110million pounds," he added.
United, reinforced by the summer hiring of Japan's Shinji Kagawa and DutchmanRobin Van Persie , lead the English Premier League afterfinishing second behind local rivals Manchester City last season.
United have also already qualified for the knockout stages of the Champions League after a costly early exit last season from Europe'smost lucrative club competition.
NEW SPONSORS SIGNED UP
United shares traded 12 cents lower at $12.86 in NewYork shortly after the opening on Wednesday. They floated at $14 in a listing that valued the club at $2.3 billion.
Investors have generally been wary of sporting franchises, concerned that their financial fortunes are too tightly linked to sportingsuccess.
United argue that their global fan base and a buoyant TV rights market for the English Premier League give them sound financial underpinnings.
For the three months to end-September, a reduction in broadcast revenue pushed underlying core earnings (EBITDA) 15 percent lower.
However, United said most of the decline was down to the scheduling of matches --the club played only one Champions League game in the period -- and would be recouped.
United, who claim to have 659 million followers worldwide, signed 10 new sponsorship deals in the first quarter, the most eye-catching being a $559 million agreement with General Motors to have the Chevrolet brand on the club's famous red shirts from2014.
The presence of Kagawa in their ranks has also led to a number of deals with Japanese firms. A 24 percentrise in revenues from all its commercial deals helped to push total revenues up 3 percent to 76 million pounds.
Profit from continuing operations was up to 20.5 million pounds against a loss of 5 million pounds a year earlier, a figure that was boosted by a tax credit which the club said related to it moving to certain U.S. tax bases.
Chelsea, who won the Champions League in May, said last week they had made a profit in 2011-12, returning to the black for thefirst time since Russian oligarch Roman Abramovich bought the club in 2003.
($1 = 0.6293 British pounds)
(Editing by Mike Nesbit)

Fuel and Tuition Costs push Inflation in UK

Annual consumer price inflation jumped to 2.7 percent in October from 2.2percent the previous month,according to official figures released Tuesday - dampening prospects that the Bank of England will move to stimulate the economy in the short term, at least.
The data from the Office for National Statistics reflected increases in university tuition fees and in food prices but did not take into account some of the latest increases in energy bills, which look set to push the headline inflation figure up yet higher in coming months.
Inflation remains an Achillesheel of the British economy.
Unlike its neighbors inside the euro, Britain saw its currency fall significantly onworld markets after the financial crisis, only to import inflation as the exchange rate pushed up the prices of non-British goods.
Rising commodity prices and increases in the value-added tax, a sales tax, have also played their part in pushing up British inflation, which hit a peak of 5.2 percent in September.
The inflation data complicatethe picture for the Bank of England, which has cut interest rates to a record lowof 0.5 percent and spent £375 billion, or $593 billion,on purchases of financial assets to try to stimulate anemic growth. Last week the bank decided to keep rates and the asset-buying program, known as quantitative easing, on hold.
The rise in inflation is likely to strengthen the hand of members of the Bank of England's monetary policy committee who are resisting more stimulus, according to a note from Steven Bryce, European economics analyst at Credit Suisse.

Canada's economic outlook getting brighter, OECD says

The outlook for the economyhas brightened somewhat for Canada and two countries critical to Canadian exporters, according to the Organization for Economic Co-operation and Development.
The Paris-based global economic organization said Monday that its composite leading indicator points to stabilizing growth in Canada,as well as in the United States and China — two economies that impact Canadian exports.
Index ticks higher
The OECD did not issue growth projections, but the new leading indicator reading for Canada shows a small rise of 0.02 percentagepoints in September, after going unchanged in August and dropping slightly in theprevious three months.
For the U.S., Canada's biggest export market by far,the index rose one-tenth of a point, while China's steep decline appears to have been arrested.
Canadian policy-makers have noted they were becoming more optimistic that the U.S. finally appears poised for a more sustained recovery and have been encouraged by the recent pickup in home prices and home construction south of the border.
The organization also said data from United Kingdom and Brazil point to a pickup in growth and that there were tentative signs of economic stabilization emerging in Italy.
Despite the bright spots, the overall finding of the OECD's index, which is designed to anticipate turning points in economic activity, is that economies in many major industrialized countries remains soft.
European slowdown
"The (leading indicators) for Japan, Germany, France and the euro area as a whole continue to point to weak growth," the report states, adding that is also true for India and Russia,

Japan may already be in recession - economics minister

TOKYO (Reuters) - Japan may already have fallen into recession, the country's economics minister, Seiji Maehara, said on Monday.
"I cannot deny the possibility that Japan has fallen into a recession phase," Maehara told reporters, adding that a final assessment on the state of the economy would be made when more data became available.
He also said he expected theBank of Japan to pursue powerful easing, and that the government and central bank would work together to beat deflation and encourage economic recovery.
Japan's economy shrank 0.9 percent in the three months to September, marking the first contraction in three quarters, adding to signs thatslowing global growth and tensions with China are nudging the world's third-largest economy into recession.
The fall in GDP, which matched a median market forecast, translated into an annualised 3.5 percent fall, government data showed onMonday

Chinese slow down would hurt African growth

A slowing Chinese economymay weaken demand for Africa’s raw materials, damaging a key driver of growth for the world’s poorest continent, said Mthuli Ncube, chief economist of the African Development Bank.
“What could be a big surprise factor in Africa’s economic growth is China,” Ncube said by phone from Tunis yesterday. “If the slowdown in China reducesits demand for oil, copper and base metals, the question is how much will that impact on commodity prices. That could really hurt Africa.”
China’s commodity demandhas helped propel economic growth in sub-Saharan African nationsincluding Zambia, the region’s biggest copper exporter, Nigeria, the continent’s largest oil producer, and Congo and Gabon, which both producetimber. Economic growth in the region is forecast to accelerate to 5.5 per cent in 2013 from about 5 per cent this year, Ncube said.
China in 2010 consumed one-fifth of global non-renewable energy resources, 23 per cent of major crops and 40 per centof metals, after increasing itsmarket share “sharply” over the past decade, according to the International Monetary Fund.
While China’s expansion cooled to a three-year low of 7.4 per cent in the third quarter, gages of manufacturing and retail sales have pointed to a recovery. Growth will probably pick up to 7.7 percent this quarter and 7.9 per cent in the three months through March 2013, according to a Bloomberg survey.
European crisis
Africa is also withstanding Europe’s debt crisis, thoughgovernments are failing to ensure the growing wealth reduces poverty, Ncube said. North Africa is seeing rising oil production and strong economic policies in East and West Africa are helping buoy growth there,while South Africa, the continent’s largest economy,is facing challenges from mining- labor unrest, Ncube said.
The financial upheaval in Europe is creating an opportunity for African nations to sway Chinese investors to redirect their exports and investment, said Ncube.
“If China is looking for new markets for its exports then Africa could benefit, the same for investment,” he said.
Trade between Africa and China is currently worth$166 billion after growing 30 per cent in 2011 and 25 per cent in the first half of this year, according to Jeremy Stevens, a Beijing- based economist at Standard Bank Group, Africa’s biggest lender.
Bloomberg

Fidelity: 401(k) accounts grew 4% in3rd quarter

Fidelity Investments, the nation's largest 401(k) administrator, said Thursday that the average balance of$75,900 at the end of the quarter was the highest sinceit began tracking the data in 2000.
Three months earlier, the average account balance among the 12 million accounts that Fidelity administers was $72,800.
The Standard & Poor's 500 stock index rose nearly 6% in the July-to-September period, boosting investment returns in 401(k)s. The gain helped investors recover from a nearly 3% market decline in the previous quarter.
Workers' 401(k)s are typicallyinvested in bonds as well as stocks to help reduce volatility. A broad U.S. bond market index rose about 1% in the second quarter, substantially less than the stock market. So workers with large portions of their accounts invested in stocks enjoyed better performance than those with more in bonds.
Account contributions from employees' paycheck deductions also rose in the latest quarter, as did 401(k) contributions from employers, known as company matches.
Annual contributions from workers now average about$7,900, up more than 7% from the level five years ago.Company matches average$3,420, up 19% from the third quarter of 2007.
Many companies reduced or suspended their 401(k) matches to conserve cash during the recession that began in late 2007. But as the economy has gradually improved, many employers have restored those matches,and then some.
"When employers were cutting contributions, many told us that they felt badly about it, and that restoring them would be one of the first things they wanted to do once they saw signs of improvement," said Beth McHugh, vice president of market insights at Boston-based Fidelity.

Moody's Investors Service has assigned stable outlook on Kenya government for in issuing debt in local and foreign currency.

Rating agency Moody's Investors Service has assigned stable outlook on Kenya government for in issuing debt in local and foreign currency.
The rating comes against Kenya’s intention to issue a sovereign bond in 2013 andcontinued domestic borrowing.
Rating Kenya B1, the agencysaid it reflected the resilience of the Kenyan economy, structural and institutional reforms that would reduce political risks.
But the high debt levels and vulnerability to a varietyof political, external and security risks moderated theoutlook.
“The first key factor underpinning Moody's assignment of a B1 rating to Kenya is the country's demonstrated economic resilience in the face of multiple shocks in recent years,” said Moody’s in its report released yesterday.
It added that the “resilienceis driven by ongoing structural changes involvingeconomic diversification, the rapid adoption of communications technology and improvements in infrastructure.”
But it noted that “Kenya's economic resilience is challenged by factors such as the country's low GDP per capita on a purchasing power parity basis of $1,718,and the moderate size of its economy, with a nominal GDP of $34 billion in 2011.”
Moody's would upgrade Kenya's ratings in the event of a significant improvement in the country's institutional strength as a result of successful implementation ofthe new constitution.
Further progress on economic diversification, with particular emphasis on export growth through the development of its newly discovered oil fields, would also positively impact Kenya's ratings

The Central Bank of Kenya has cut the base lending rate by 200 basis points to 11 per cent from 13 per cent

The monetary policy committee said the drop in inflation from 6.09 per cent in August, to 5.32 per cent in September and further to4.14 per cent in October, together with stability in exchange rates and high level of foreign exchange reserves provided space for gradual easing of monetary policy stance.
Exchange rates ranged between 84.91 to the US dollar in September to 85.28 in October while reserves rose to Sh448 billion ($5247.9m) or 4.14 months of import cover.
“Given the considerations above the committee decided to reduce the central bank rate by 200 basis points to 11 per cent,” central bank said.
However volatile fuel prices,a large current account deficit and spillover effects of the global economic slowdown portends risks, the central bank said.

The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today.

The European Commission said the euro-zone economy will virtually grind to a halt next year as the debt crisis ravages southern Europe and gnaws at theeconomic performance ofexport-driven Germany .
The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today. It cut the forecast for Germany, Europe’s largest economy,to 0.8 percent from 1.7 percent.
“Europe is going through a difficult process of macroeconomic rebalancing and adjustment which will last for some time still,” European Union Economicand Monetary Commissioner Olli Rehn told reporters in Brussels. The economy is “sailing forward through rough waters.”
The economic falloff may make it harder for European governments to pull Greece back from the brink and deal with a possible aid program for Spain, leaving the debt crisis to fester for a fourth year.
Technically, the euro area will avert a recession, defined as two consecutive quarters of contraction, though the overall economy will still shrink 0.4 percent in 2012, ending a two-year expansion, the commissionsaid