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With Visas Tight, US Resorts Struggle to Find Seasonal Help

Innkeepers, restaurateurs and landscapers around the U.S. say they’re struggling to find seasonal help and turning down business in some cases because the government tightened up on visas for temporary foreign workers.

At issue are H-2B visas, which are issued for seasonal, nonagricultural jobs.

The U.S. caps the number at 66,000 per fiscal year. Some workers return year after year, and Congress has allowed them to do so in the past without being counted toward the limit. No such exception was passed for 2017 after the presidential election.

Cape Cod restaurant owner Mac Hay has organized seasonal businesses to lobby Congress. He says many can’t function full time without these workers.

A government spending bill unveiled Monday would allow for more H-2B visas, but processing them would take weeks.

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Fed Likely to Leave Rates Alone but Signals More Hikes Coming

With the U.S. economy on solid footing and unemployment at a near-decade low, the Federal Reserve remains in the midst of a campaign to gradually raise interest rates from ultra-lows. But this week, it’s all but sure to take a pause.

The Fed is widely expected to keep its key short-term rate unchanged after having raised it in March for the second time in three months. Most analysts foresee the Fed raising its key rate again at least twice more before year’s end, a testament to the durability of the U.S. economic recovery and a more stable global picture.

 

One reason for the Fed to stand pat this week is that even though the job market has shown steady strength, the economy itself is still growing in fits and starts. On Friday, the government estimated that the economy, as gauged by the gross domestic product, grew at a tepid 0.7 percent annual rate in the January-March quarter. It was the poorest quarterly performance in three years.

 

Though some temporary factors probably held back growth last quarter and may have overstated the weakness, the poor showing underscored that key pockets of the economy — consumer spending and manufacturing, for example — remain sluggish. On Monday, the government said U.S. consumer spending stalled in March for a second straight month. And the Institute for Supply Management reported a drop in factory activity.

 

“Given all the uncertainties they still face and especially with growth coming in so weak, the less the Fed says at this meeting, the better,” said Diane Swonk, chief economist at DS Economics.

 

Most economists have expressed optimism that the economy is strengthening in the current April-June quarter, fueled by job growth, higher consumer confidence and stock-market records. Many think that annualized growth could accelerate to around 3 percent and that the Fed will feel more confident to resume raising rates at its June meeting.

 

“The Fed will probably say in their statement that they expect the economy to rebound in the second quarter,” said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University.

 

It isn’t just the Fed’s short-term rate — a benchmark for other borrowing costs throughout the economy — that will likely occupy attention at this week’s meeting. Officials will also likely discuss how and when to start paring their extraordinary large $4.5 trillion portfolio of Treasurys and mortgage bonds. The Fed amassed its portfolio — commonly called its balance sheet — in the years after the financial crisis erupted in 2008, when it bought long-term bonds to help keep mortgage and other borrowing rates low and support a frail economy. At the time, the Fed had already cut its short-term rate to a record low.

 

The balance sheet is now about five times its size before the financial crisis hit. The Fed stopped buying new bonds in 2014 but has kept its balance sheet high by reinvesting the proceeds of maturing bonds. The Fed’s thinking has been that reducing the balance sheet could send long-term rates up and work against its goals of fortifying the economy.

 

Now, as the Fed becomes more watchful about inflation pressures, the time is nearing when it will need to shrink its balance sheet, a process that could have the effect of raising some borrowing rates, at least modestly. The Fed jolted investors when it released the minutes of its March meeting, which showed that most officials thought that process “would likely be appropriate later this year.” This was sooner than many investors expected.

 

Could the Fed clarify its timetable for paring its balance sheet in the statement it will issue when its policy meeting ends Wednesday? It may decide against doing so, given that this meeting won’t be accompanied by a news conference with Chair Janet Yellen to explain any shifts in the Fed’s policy or thinking.

 

Mark Zandi, chief economist at Moody’s Analytics, said the more likely signal the Fed could send is to reinforce the markets’ view that it intends to raise its short-term rate again next month.

 

“I expect two more rate hikes — one in June and then one in September,” Zandi said. “Then I expect the Fed to begin allowing its balance sheet to run off.”

 

Some Fed officials have suggested that they would prefer not to be raising the short-term rate at the same time that they are beginning to reduce their balance sheet. Giving investors too much to digest at once risks unsettling financial markets. In 2013, the Fed triggered a brief storm in bond markets when then-Chairman Ben Bernanke raised the possibility that the Fed would start tapering its bond purchases later that year, catching investors by surprise.

 

“They learned their lesson with the taper tantrum of 2013 that they need to give the markets plenty of warning of changes in their bond policies,” Sohn said.

 

Some analysts say they think the Fed will reveal nothing this week about its timetable for reducing its balance sheet, in part because the policy committee has yet to reach a consensus on when or how to do so.

 

“I have a feeling we are going to get much less information than we want,” Swonk said. “The Fed wants to move slowly, but they don’t have a consensus yet on how to proceed.”

 

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UN Economic Commission Sees Trade Protectionism as Threat to Growth

A United Nations economic and social report released Monday warns Asia’s positive economic outlook “faces significant risk” from rising trade protectionism, especially concerns over U.S. trade policy with key partners such as China.

The U.N.’s Economic and Social Commission for Asia and the Pacific (UNESCAP) survey is largely positive for the region, which now accounts for some 30 percent of total global output. If sustained, the survey said this could reach 50 percent by 2050.

For more than 70 years, Asia’s export-led growth has helped lift millions out of poverty with such target markets as the U.S. and Europe.

But in more recent years the economies have come to rely more on domestic demand given the “prolonged weakness in external demand and global trade,” the survey said.

Regional growth is forecast by the U.N. economists at close to 5 percent, with China — a cornerstone of the region’s economies — expanding at 6.5 percent in 2017, and India growing by 7.1 percent.

China’s economic conditions are seen as ‘stable’ with rebalancing, restructuring and deleveraging [debt] leading to “new normal growth trends.” Russia, buoyed by higher oil prices, is also forecast to show positive growth in 2017.

But the general positive outlook is being overshadowed by concerns of trade protectionism impacting employment and economic growth.

“The most significant risk to the broadly positive economic outlook is rising trade protectionism,” the survey said.

It noted recent shifts in U.S. policies concerning trade, currency and immigration along with negotiations over Britain’s exit from the European Union, “have increased global policy uncertainty and could have negative impacts on the region, including for China’s goods exports and India’s services exports.”

US new stance

U.S. President Donald Trump adopted an aggressive stance over China’s trade and currency policies ahead of the U.S. presidential election. But Trump has recently toned down his comments as Washington has looked to Beijing to back measures to curb North Korea’s development of nuclear weapons.

Shamshad Akhtar, UNESCAP executive secretary, said the debate over protectionism and “distrust of globalization” needs to be addressed.

“The region now accounts for nearly one-third of the world output. Yet there is growing distrust of globalization and emerging protectionist tendencies that have created global uncertainty,” she said.

“If not addressed, [it] has implications for growth prospects in [the] Asia and Pacific region that has traditionally been dependent on its exports for jobs and prosperity,” Akhtar said.

The UNESCAP said growing global trade has led to wide-ranging regional economic benefits over decades. But the debate is being challenged by opposition to globalization, especially in the U.S. and Europe.

But Akhtar said it was difficult to “arrest globalization because of labor mobility, capital mobility and so on, [that] have been instituted now for years”.

“So I want to be rightly understood that distrust [of globalization] is really [a] public and politicians’ gimmick more than anything else — but of course we have to take appropriate policies,” she said.

The U.N. survey said projections show if trade protectionism and global uncertainty increase, growth for major developing countries could be lower by up to 1.2 percentage points.

The survey noted while the Asia Pacific region remains “the engine of global growth,” expansion was insufficient in the face of several challenges.

The commission pointed to rising income inequalities, with the expansion of decent employment also a challenge.

The region was also “falling behind the rest of the world in terms of social protection, financing and coverage” in contrast to levels of spending in developed economies.

Environment

Environmental damage was a key concern in the face of rapid economic expansion over several decades, with growth coming at a steep environmental cost.

“On average developing Asia–Pacific economies use twice as many resources per dollar of GDP as the rest of the world. Environmental degradation and carbon emissions not captured in GDP [growth data] undermine the sustainability of economies,” the survey said.

The survey called for improved governance and accountability, seen as a measure for improved economic outcomes.

Countries, it said, that perform better on governance measures, focusing on the rule of law, regulations and control corruption and government effectiveness also “tend to mobilize and spend their fiscal resources efficiently and effectively.”

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Refugees Turn Skills From Home into New Business

Once they acclimate to their new environment, overcoming language, social and cultural barriers, refugees in the U.S. often thrive. Some translate their experiences into assets that are valuable to their new community, as did Parvin and Yadollah Jamalreza. VOA’s June Soh visited their popular tailoring shop in Charlottesville, Virginia.

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Growth Slows in April in China’s Manufacturing Sector

Growth in China’s manufacturing sector slowed in April, official data showed Sunday, pointing to an unsteady recovery in the world’s second-largest economy. 

 

The monthly purchasing managers’ index by the Chinese Federation of Logistics and Purchasing fell to 51.2 in April, lower than the 51.8 recorded in March. 

 

The index is based on a 100-point scale on which numbers above 50 indicate expansion.

 

National Bureau of Statistics statistician Zhao Qinghe said in the release that April’s figure was affected by sluggish growth in market demand and supply, and slower expansion in imports and exports.

 

April’s index still represented a ninth consecutive month of expansion. 

 

China saw its slowest growth in nearly three decades in 2016. China’s huge manufacturing sector is seen as an important indicator for the wider Chinese economy. It has cooled gradually over the past six years as Beijing tries to pivot it away from heavy reliance on export-based manufacturing and investment toward consumer spending.

 

The official full-year economic growth target for 2017 is 6.5 percent. 

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IT Workers, Companies Cautious on H1B Visa Program Review

During a recent visit to Wisconsin, President Donald Trump announced he was signing an Executive Order reviewing the visa program that brings many technical workers to the United States, known as the H1B visa. About 85,000 workers come to the United States annually using an H1B visa. More from VOA’s Kane Farabaugh

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On 100th Day in Office, Trump to Focus on Trade

President Donald Trump will spend his 100th day in office talking tough on trade in one of the states that delivered his unlikely win.

 

The president is expected to sign an executive order Saturday that will direct his Commerce Department and the U.S. Trade Representative to perform a comprehensive study of the nation’s trade agreements to determine whether America is being treated fairly by its trading partners and the 164-nation World Trade Organization.

It’s one of two executive orders the president will sign at a shovel factory in Pennsylvania’s Cumberland County, the kind of place that propelled his surprise victory.

Rally in Pennsylvania 

The last week has been a frenzy of activity at the White House as Trump and his team have tried to rack up accomplishments and make good on campaign promises before reaching the symbolic 100-day mark. In addition to the visit to the Ames tool factory, which has been manufacturing shovels since 1774, the president will hold one of his signature campaign rallies in Harrisburg to cap the occasion.

 

It’s a return to fundamentals for a president who has, in recent days, sounded wistful reflecting on his term so far.

 

Earlier this week, Trump announced his intention to work to renegotiate the North American Free Trade Agreement. He also said he would begin renegotiating a free trade deal with South Korea, with which the U.S. has a significant trade deficit.

Trade discussed every day

 

“There isn’t a day that goes by that the president doesn’t discuss some aspect of trade,” Commerce Secretary Wilbur Ross said at the White House Friday.

 

The executive orders signed Saturday will mark Trump’s 31st and 32nd since taking office, the most of any president in his first 100 days since World War II. It’s a jarring disconnect from Trump’s rhetoric during the campaign, when he railed against his predecessor’s use of the tool, which has the benefit of not needing congressional sign-off.

The more significant of the two orders will give the Commerce Department and the U.S. Trade Representative 180 days to identify violations and abuses under the country’s trade agreements and recommend solutions.

World Trade Organization outdated 

Ross said the WTO, the Geneva-based arbiter of world trade rules, is bureaucratic and outdated and needs an overhaul. Ross downplayed the possibility that the United States would consider leaving the organization but didn’t rule it out. 

“As any multilateral organization, there’s always the potential for modifying the rules,” he said.

 

The administration argues that unfair competition with China and other trade partners has wiped out millions of U.S. factory jobs. Ross said dissatisfaction with trade policy is one reason voters turned to Trump.

 

“They’re fed up with having their jobs go offshore. They’re fed up with some of the destructive practices,” he said. “So in effect, the country said in this last election: It’s about time to fix these things. And the president heard that message.”

 

Trump, who campaigned on a vow to crack down on China and other trading partners, has announced several other moves on trade in recent weeks. He ordered the Commerce Department to study the causes of the United States’ massive trade deficit in goods, $734 billion last year, $347 billion with China alone. The administration is also imposing duties on Canadian softwood timber and is investigating whether steel and aluminum imports pose a threat to national security.

 

Ross said Friday that the WTO is too narrowly focused on limiting traditional tariffs — taxes on imports — and does little to counter less conventional barriers to trade or to police violations of intellectual property rights.

 

Trump has pushed a model of “reciprocal trade” agreements in which the U.S. would raise or lower tariffs on a country’s imports depending on how that country treats the U.S.

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Trump Signs Order Opening Arctic for Oil Drilling

President Donald Trump is re-opening for oil exploration areas that President Barack Obama had closed, a move that environmental groups have promised to fight.

In an executive order Friday, the president reversed the Obama administration’s decision to prohibit oil and gas drilling in the Arctic waters off Alaska.

The order also instructs the Interior Department to review current restrictions on energy development in the Atlantic Ocean and Gulf of Mexico. In addition, it bars the creation or expansion of marine sanctuaries and orders a review of all areas protected within the last 10 years.

Trump cites advantages

The White House says 90 billion barrels of oil and 327 trillion cubic feet of natural gas are buried off the U.S. coastline, but 94 percent of the area is off limits.

“Renewed offshore energy production will reduce the cost of energy, create countless new jobs and make America more secure and far more energy independent,” Trump said at a signing ceremony at the White House.

The action is the latest from the Trump administration aimed at boosting domestic energy production and loosening environmental regulations.

In his first 100 days, Trump has relaxed coal mine pollution rules and ordered a review of vehicle efficiency standards and power plant greenhouse gas rules. His administration has stopped defending Obama-era pollution regulations challenged in court.

The energy industry has cheered the moves. Environmental groups have promised strong opposition.

Fragile ecosystems

Conservationists have long opposed oil drilling in the Arctic. A spill would devastate the region’s fragile ecosystems, they say, while extreme conditions raise the risks of a spill and make cleanup harder.

Fishing and tourism on the Atlantic coast and Gulf of Mexico would suffer from an accident, too, environmentalists note.

“By his actions today, President Trump has sent a clear message that he prioritizes the oil and gas industry over the needs of working Americans in our coastal communities who depend on healthy fishing and tourism economies for their livelihoods,” Environmental Defense Fund Vice President Elizabeth Thompson said in a statement.

Reviewing and rewriting the current offshore drilling plans are expected to take several years. Environmental groups plan legal challenges to the changes.

 

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US Economy Grows at Disappointing 0.7% in First Quarter

The latest economic data indicate the U.S. economy is growing at the slowest rate in three years. The GDP or gross domestic product, the broadest measure of all goods and services produced in the country, increased at a disappointing 0.7 percent annual rate, according to new government estimates released Friday.  That’s the weakest performance since 2014, as consumer spending stayed flat and business inventories remained small.  

Analysts say that’s bound to be a disappointment to U.S. President Donald Trump who predicted strong economic growth on day one, once he took over the White House. 

“Remember candidate Trump talked about GDP of about 5 percent and paraphrasing, perhaps something much, much stronger,” said Bankrate.com senior analyst Mark Hamrick. 

“Most economists believe the track for the U.S. economy for the intermediate future is going to be very familiar to what has been seen over the last number of years, and that’s somewhere between one and probably 2.5 percent on an annual basis.”

The U.S. economy grew at a 2.1 percent pace in the fourth quarter of 2016.  But economists say first quarter estimates tend to be notoriously low for a number of reasons.  

“In some years it’s been because of bad weather that kept people in their homes, keeping them from purchasing things but it’s also believed to be somewhat flawed statistically — meaning that what’s actually happening in the economy isn’t being perfectly captured by government statistics,” Hamrick tells VOA.  “It ends up being an estimate and most of them are not perfect”.

Most economists say the first quarter estimate should not be seen as a true measure of U.S. economic health. 

Other indicators suggest a more positive outlook. The U.S. unemployment rate is near a 10-year low at 4.5 percent, consumer and business sentiment are rising and major U.S. stock indexes are near record highs.