The daily business briefing: June 2, 2017
Trump announces withdrawal from Paris climate deal, the U.S. added fewer jobs than expected in May, and more
Trump announces withdrawal from the Paris climate accord
President Trump announced Thursday that he is pulling the U.S. out of the landmark Paris climate agreement, honoring a campaign promise but prompting swift condemnation from world leaders, environmentalists, and corporate executives. Trump said the move was necessary to protect U.S. interests against an accord that was unfair to the U.S., framing his decision as a "reassertion of America's sovereignty." The U.S., the biggest carbon polluter in history, now joins Syria and Nicaragua, which wanted a tougher deal, as the only countries in the world that oppose the 2015 deal. Trump said he would try to negotiate a better deal for the U.S., but the leaders of France, Germany, and Italy in a joint statement rejected the idea. "We deem the momentum generated in Paris in December 2015 irreversible and we firmly believe that the Paris Agreement cannot be renegotiated, since it is a vital instrument for our planet, societies, and economies," they said.
U.S. economy adds 138,000 jobs in May, below expectations
The U.S. added 138,000 jobs in May, fewer than expected, the Labor Department reported on Friday. Economists surveyed by Reuters had predicted job gains of 185,000. The unemployment rate inched down to 4.3 percent, its lowest level since 2001. Hourly wages rose by 0.2 percent to $26.22, keeping the year-on-year pay rise at 2.5 percent. Despite the lower-than-expected job gains, the report reaffirmed the argument that the economy is gaining enough strength for the Federal Reserve to raise interest rates again at its June 13-14 meeting, as unemployment has now been below 5 percent for more than a year, suggesting near full employment.
U.S. auto sales fall for 5th straight month
U.S. auto sales dropped in May for the fifth straight month, falling by 0.5 percent to just over 1.5 million vehicles. The string of declines strengthened expectations that the industry is headed for its first fall in annual sales since 2009. General Motors, Fiat Chrysler, Hyundai, and Toyota reported that their sales were lower this May compared to last May, while Ford, Honda, Nissan, and Volkswagen reported gains. Tom Libby, an industry analyst with IHS Markit, said sales were falling despite low gas prices and an improving economy because pent-up demand for new cars has been satisfied.
World stocks hit highs as strong U.S. data boosts optimism
World stocks climbed to record highs on Friday as strong U.S. economic data eased fears about economic growth in coming months. Global stocks have gained 11 percent so far this year. U.S. stocks gained on Thursday after the ADP private sector employment report showed that companies added 253,000 jobs in May, far exceeding the 185,000 in gains estimated by economists surveyed by Reuters. "More than anything it is employment data driven, it was such a resounding uptick over expectations," said Paul Springmeyer, investment managing director at U.S. Bank's Private Client Reserve in Minneapolis.
Musk and Iger quit Trump's CEO council over Paris accord withdrawal
Tesla CEO Elon Musk followed through Thursday on a vow to quit two White House advisory councils due to President Trump's decision to withdraw from the landmark Paris climate agreement. Musk has become a leading representative of the clean energy movement for his push to develop electric cars and solar power alternatives for the home, such as Tesla's new solar roof tiles. Musk faced pressure to quit Trump's advisory panels before, but said it was better to keep a seat at the table so he could make his voice heard. Trump's rejection of the Paris deal suggested that Musk had not managed to sway the president's thinking on the environment. "Climate change is real," he tweeted. "Leaving Paris is not good for America or the world." Disney CEO Robert Iger also quit Trump's council over the decision.