Morning Money Memo…
The jobs market appears to be getting stronger and the US economy may be revving up. Employers hired at a healthy pace in May for a fourth straight month, fueling hopes of accelerating growth after a grim start for the year. The Labor Department said today that employers added 217,000 jobs last month, down from 282,000 in April, which was a very strong month for job creation. Employment gains have now averaged 234,000 in the past three months, up from only 150,000 in the previous three. The US unemployment rate remained at 6.3 percent. The job market has reached a significant milestone. Nearly five years after the Great Recession ended, the U.S. has finally regained all the jobs lost in the downturn. But that’s hardly cause for celebration: The population has grown nearly 7 percent since then. The US workforce participation rate was unchanged at 62.8 percent.
Vodafone, the world’s second-largest cellphone company, says “at the flick of a switch, governments around the world can listen to private phone calls. In a report covering the 29 countries where it operates, Vodafone says authorities in some countries “have direct access to an operator’s network.” The reports says, “Vodafone will not receive any form of demand for lawful interception access as the relevant agencies and authorities already have permanent access to customer communications via their own direct link.” The findings add to worldwide concern about privacy rights highlighted by the leaks of NSA documents from former contractor Edward Snowden. “Direct-access systems do not require warrants, and companies have no information about the identity or the number of customers targeted,” says today’s Guardian newspaper.
Bank of America is said to be in talks to pay at least $12 billion to settle a Department of Justice investigation into how it sold mortgage-backed securities. At least $5 billion will be paid in consumer relief to help struggling homeowners. In March, the bank paid more than $9 billion to settle a similar inquiry by the Federal Housing Finance Agency. According to a Financial Times analysis, “BofA, which acquired Countrywide Financial and Merrill Lynch during the financial crisis, has already paid over $25 billion in fines and settlements since 2009.”
Today’s May employment report is likely to influence the stock market. Futures rose overnight after the Standard and Poor’s 500 and Dow Jones index closed yesterday at record highs. European markets moved higher the day after a dramatic move by the European Central Bank, aimed at boosted the economy and increasing the amount of lending to businesses. The ECB cut two key interest rates, pushing one of them below zero.
J.K. Rowling’s publisher is laying off some employees amid a dispute with Amazon, responsible for an estimated 40 percent of all US book sales. Hachette Book Group cites a “changing marketplace” for layoffs that will affect less than 3 percent of its staff. Hachette also publishes James Patterson, Stephenie Meyer, Stephen Colbert, Malcolm Gladwell and other popular authors. It released a statement saying staff reductions were necessary for it to improve “resilience” in difficult times. Hachette says the layoffs were planned before its recent standoff with Amazon. The online retailer has been restricting the availability of many Hachette books, reportedly because of a disagreement over terms for e-books.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow