WASHINGTON: Less than stellar US growth in recent weeks has caused many businesses to lower their outlooks and they now expect the economy to weaken, the Federal Reserve said Wednesday.
The Fed later this month is widely expected to cut interest rates for the third time this year as policymakers work to provide support for an economy that has begun to sag — even though for the moment it continues to outshine the rest of the industrialized world.
“The US economy expanded at a slight to modest pace… as business activity varied across the country,“ the central bank said in its beige book report on the economy.
“Business contacts mostly expect the economic expansion to continue; however many lowered their outlooks for growth in the coming six to 12 months.”
Most economists do not expect a recession in the next year but forecasting models still show the risk is increasing.
The hardships that manufacturing and agriculture face, according to the report, have not eased.
And elsewhere the picture has been uneven, though household spending has remained “solid,“ according to the Fed’s report, which gathers anecdotal accounts from around the country.
The mood was generally better in the southern and western regions of the country, while the Midwest and Great Plains — regions key to President Donald Trump’s election upset in 2016 — were gloomier, according to the Fed.
Hard to find workers
Oxford Economics said in a client note that the report was “lackluster” and pointed to more rate cuts from the central bank.
“We still expect two more rate cuts this year, in October and December,“ the firm said.
While US economic expansion is in a record 11th year and unemployment remains at 50-year lows, Fed members at their most recent meeting said they had become “more concerned” by mounting risks.
As the world economy begins to sputter, policymakers in recent weeks have said a clearer picture has emerged of the threat from President Donald Trump’s trade wars: Skittish companies, unsure of markets and prices, have held back on investment and could soon reduce hiring, which could then eat into consumer spending and growth.
But according to the beige book, for many employers the main barrier to more steady hiring remains the lack of available and qualified workers.
A major New York employment firm said “almost all job candidates are merely jumping from other jobs,“ the report said, while pressure to fill open positions in the Philadelphia region remained “acute.”
But among manufacturers, the labor shortage had a different effect. Rather than lay off employees who could be hard to replace, some firms reduced worker hours instead.
In the Boston region, “signs of slowing have become more widespread,“ while growth in the New York area “slowed to a subdued pace.”
Conditions improved in the Chicago and St Louis regions.
The early fallout from a month-long nationwide strike by UAW workers at General Motors plants “was limited,“ the Fed said.
Wall Street was largely unmoved by the report, finishing slightly lower after Commerce Department data showed weakening consumer demand in September. -AFP
WASHINGTON, Oct 17 — Less than stellar US growth in recent weeks has caused many businesses to lower their outlooks and they now expect the economy to weaken, the Federal Reserve said yesterday. The Fed later this month is widely expected to cut…
WASHINGTON, Oct 14 — US President Donald Trump called his Phase 1 trade deal with China “by far, the greatest and biggest deal ever made,” even though nothing was agreed on paper, and most of the tariffs set upon Chinese goods remain in place….
KUALA LUMPUR, Oct 14 — Carlsberg Brewery Malaysia Berhad has appointed a new managing director Stefano Clini to replace Ted Akiskalos in managing its Malaysian and Singaporean operations. The 53-year-old Clini will assume his duties on October 26,…
WASHINGTON, Oct 10 — Most Federal Reserve policymakers supported the need for an interest rate cut in September, minutes of the central bank’s last policy meeting showed, but they remained divided on the path ahead for monetary policy. The…
WASHINGTON, Oct 7 — Economists have become more concerned about US growth prospects, citing trade friction as the major worry, but recession risks have receded slightly, according to a survey released today. Nearly half of the panel surveyed by…
NEW YORK, Oct 4 — Wall Street stocks climbed yesterday after data showing US services-sector activity at a three-year low fuelled expectations that the Federal Reserve would cut interest rates to stem a wider economic downturn. Microsoft rose 1.2…
PETALING JAYA: MCIS Insurance Bhd, now known as MCIS Life, unveiled a new corporate identity today following a rebranding exercise which will see the company repositioning itself among Malaysian consumers.
MCIS Life CEO and managing director Prasheem Seebran said the exercise began in 2014, when South Africa-based Sanlam Group acquired a majority stake, and was completed on Oct 1.
“We intend to take this company to new heights in Malaysia. We are a very ambitious company and we have plans to grow even further over the next three to five years.
“Our brand-new identity is all about empowering people to be a part of something bigger than themselves and what better way than contributing towards a better environment for everyone,” he told the media at the brand launch today.
The rebranding of the life insurer marks a new era of mutual assistance and protection as the company also unveiled its brand promise of “People Helping People”.
According to Prasheem, MCIS was top among life insurers in Malaysia in 1H19 in terms of new business growth, and going forward, the company will target previously underserved segments.
“There will be expansion over all of Malaysia whether it’s new territories that we enter or whether it’s new markets like the underserved segments in Malaysia, MCIS wants to play its part,” he said.
Looking ahead, Prasheem said the company had set ambitious growth targets but declined to provide details, saying only that the company would maintain a growth target of between 40% and 60%.
“I don’t want to give exact numbers right now, but our targets are very high and ambitious. We want to penetrate areas that Malaysia has not historically penetrated before, such as the B40 segment, and it’s up to us to provide protection to these communities,” he said.
Meanwhile, in conjunction with the rebranding, Prasheem announced MCIS’ corporate social responsibility initiative in which the company pledged to support and nurture, over a period of five years, some 500,000 seedlings consisting of six endemic species of rainforest trees.
“We want to contribute to the rehabilitation and restoration of our natural ecosystem in Malaysia. Our humble efforts will begin with the initial planting of 1,200 trees (of the identified six species) and we will nurture the trees and the seedlings produced by the trees in two separate locations in Selangor,” he said.
Over a period of five years, the initial 1,200 trees are expected to produce new seedlings, which will continue to be planted in identified locations through a smart collaboration with Majlis Perbandaran Sepang.
Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin said MCIS would receive the government’s full support in its initiative.
“The government supports all efforts by corporates, the private sector, NGOs and other agencies to plant trees as well as preserving green lungs and forests. This is in line with the government efforts to keep our 1992 Rio de Janeiro commitment of maintaining our forest cover at least 50%,” she said at the launch.
NEW YORK, Sept 25 — US President Donald Trump said today that a deal to end a nearly 15-month trade war with China could happen sooner than people think. “They want to make a deal very badly… It could happen sooner than you think,” Trump…
GEORGE TOWN: The landmark decision by Indonesia to relocate its capital from Jakarta in the Java Island to Kalimantan area is expected to make the Borneo Island one of the biggest growth centres in Asia, said a leading banker here.
Labuan Financial Services Authority (LFSA) director–general Danial Mah Abdullah (pix) said that he agreed with the assertion that Borneo – home to the Malaysian states of Sarawak, Sabah and the Federal Territory of Labuan as well as Brunei and Kalimantan (Indonesia) should brace itself for the push and demand for growth.
Penang–born Mah said that the designated capital is likely to be situated near Tawau in Sabah so the growth within the region is expected to be phenomenon.
In view of this, LFSA, which is the country’s sole mid-shore banking facility and regulator, is keen to position itself as a prime participant in the development process of a new capital, especially since it has a unique range of banking services.
Presently, the population base of Jakarta is expected to touch 10 million – making it one of the biggest cosmopolitan cities in Asia and likely the biggest in Asean.
Mah said that LFSA has the potential to become a major financial services centre as it shares the same time zone with Asia’s financial hubs – such as Shanghai, Hong Kong and Singapore.
Its emphasis on digitalisation and digital currency in the banking system was also helping its cause to compliment the Asian financial hubs.
Presently, some 200 companies registered in Penang are using the LFSA to cement its international dealings, said Mah.
“There is room for more growth. LSFA is also seeking for talents, including from Penang to help grow our potential. Labuan is also a duty free entreport.”
Digitalsation of the banking services has seen LSFA cement an agreement with China Construction Bank Corp (CCB) – one of the biggest infrastructure companies in the world – to set up a branch in Labuan.
The application was approved for them to conduct digital banking activities in the Labuan International Business and Financial Centre (Labuan IBFC).
It was reported that a core strategy of CCB is building a digital financial ecosystem with the use fintech to empower customers’ access to their banking needs.
Since its formation 29 years ago, the Labuan International Business Financial Centre is now home to 55 banks, 217 insurers, 61 trust companies and more than 300 leasing companies as well as 43 commodity trading companies.
Earlier, LFSA hosted an awareness talk on its role at the Wawasan Open University (WOU) main campus here.
The event was graced by the Yang di – Pertua Negri Tun Dr Abdul Rahman Abbas where also present was WOU deputy vice–chancellor Prof Dr Zoraini Wati Abas.