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The US added over 300,000 jobs in March and the unemployment rate dropped slightly

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The unemployment rate decreased from 3.9% to 3.8% in March.  (iStock)

The unemployment rate decreased marginally in March to 3.8%, the Bureau of Labor Statistics noted in its Employment Situation Report. Last month, the unemployment rate sat at 3.9%. The rate dropped, in part, due to the additional 303,000 jobs added in March.

The unemployment rate hasn’t shifted much over the last few months. It’s been ebbing and flowing between 3.7% and 3.9% since August 2023.

Currently, there are 6.4 million unemployed people in the U.S. The number of long-term unemployed people — those who have been jobless for at least 27 weeks — reached 1.2 million this month, barely changing since February.

The industries that saw the largest gains include health care, government and construction. The healthcare industry added 72,000 jobs, which is higher than the average monthly gain of 60,000 over the last year.

The U.S. government added 71,000 jobs, also higher than the average in the last 12 months. The construction industry added 39,000 jobs, which is nearly double the average monthly gain of 19,000 in the last 12 months.

Some industries saw little to no change in jobs last month. The mining, quarrying, oil, gas and manufacturing industries saw hardly any change to job numbers.

The building materials and equipment industry as well as automotive parts dealers saw job losses. Builders and equipment dealerships lost 10,000 jobs and automotive parts makers lost 3,000 jobs.

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HIGH DEBT IS CAUSING MORE CONSUMERS TO LIVE PAYCHECK-TO-PAYCHECK

Inflation is back up slightly

The U.S. Bureau of Labor Statistics Consumer Price Index (CPI) — a major measure of inflation — increased by 0.4%, after rising 0.3% in January.

The index for shelter rose by 0.4% in February and the gasoline index rose by 3.8%. These two indexes drove inflation the most. The food index remained steady, with no change between January and February.

A couple of the indexes within the CPI decreased by small margins. The medical care services index decreased by 0.1%. The new vehicles decreased by the same 0.1%.

While new cars dropped in price in February, the cost of used vehicles went up. The used car index rose by 0.5%.

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THESE 5 CITIES HAVE THE LARGEST INFLATION PROBLEM: SURVEY

Home prices remain unaffordable despite rising incomes

Although the job market is staying strong, housing remains unaffordable for both buyers and renters.

The average sale price for a single-family home was 5.6 times higher than the average income, a study from the Joint Center for Housing Studies of Harvard University recently revealed. This is higher than it’s ever been on record, dating back to the 1970s.

In 2019, before the pandemic, the national price-to-income ratio stood at 4.1, today it stands at 5.6. A high price-to-income ratio indicates low homebuyer affordability.

During the pandemic, low mortgage rates helped balance out high prices, but now, the average 30-year mortgage rate sits at 6.82%, Freddie Mac recently reported. Plus, high homeowners insurance rates and lingering high home prices, are also pushing many buyers out of the market.

Renters aren’t fairing much better than buyers. Another recent Joint Center study measured affordability for renters. It found that, in 2022, half of renters in the U.S. were cost burdened, spending more than 30% of their incomes on rent and utilities.

The number of renters spending 30% of their incomes rose by two million and has reached a record high of 22.4 million. During the pandemic, there were more resources to help renters deal with these high costs. 

“As these resources have expired, however, the housing safety net is once again overwhelmed and underfunded,” Chris Herbert, the managing director of the Joint Center, said in a press release.

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THIS IS THE #1 CITY FOR FIRST-TIME HOMEBUYERS, AND OTHER HOT US HOUSING MARKETS

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Actively managed ETFs hit $1 trillion

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The rapid, record rise of active equity ETFs amid market volatility

It’s milestone month for the exchange-traded fund industry.

Actively managed ETFs now have more than $1 trillion in assets under management, according to independent research firm ETFGI.

That’s roughly the market cap of Berkshire Hathaway, Saudi Arabia’s gross domestic product and the value of 121 New York Yankees franchises.

The ETF Store’s Nate Geraci thinks it will grow even bigger due to the appetite for new active investing strategies.

“It’s interesting for an industry where the roots are passively managed products. That’s what the industry was built on,” the firm’s president told CNBC’s “ETF Edge” this week. “It’s interesting to see active ETFs getting all of the attention right now.”

Geraci finds most of the flows are going into “much more systemic strategies,” including a combination of passive and aggressive.  

“When you look at the growth in the number of actively managed ETFs out there … these aren’t what you necessarily think of as traditional active,” he added. “It is products like options-based income ETFs [and] buffer ETFs.”

Actively managed ETFs now comprise almost one-tenth of the ETF industry, according to VettaFi’s Kirsten Chang.

Tariffs and market volatility implications

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China may see ‘flying taxis’ in three years, Ehang predicts

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A flying taxi displayed at the China Telecom booth at SNIEC in Shanghai, on June 26, 2024, during the opening of Mobile World Congress 2024.

Nurphoto | Nurphoto | Getty Images

Flying taxis will become a viable method of transportation in China in the next three to five years, according to a senior executive at Ehang, a company that makes autonomous aerial vehicles (AAVs).

The prediction by Ehang’s Vice President He Tianxing comes days after the company became the first company, along with its joint venture partner Hefei Heyi Aviation, to obtain a certificate to operate “civil human-carrying pilotless aerial vehicles” from the Civil Aviation Administration of China.

Ehang said the certification clears the way for commercial operations of its vehicles, allowing for paid human-carrying services and any other low-altitude use cases the company develops.

At first, Ehang’s AAVs will be used for tourism, with passengers able to ride along designated routes in Guangzhou and Hefei by the end of June, He told CNBC in an interview translated from Mandarin.

The company will gradually explore air taxi services as its tourist operations progress. He named Hefei and Shenzhen as examples of some of the first cities expected to get air taxi services.

Ehang’s EH216-S, which received the certification, is a fully electric, pilotless two-seater aerial vehicle that features 16 propellers, according to Ehang’s website. It has a maximum design speed of 130 kilometers per hour, with a maximum range of 30 kilometers.

He expects to get certifications to operate in additional cities this year and next, with the second set of locations for tourist operations expected to include Zhuhai, Shenzhen, Taiyuan, Wuxi, Wenzhou and Wuhan.

For the forthcoming Hefei and Guangzhou locations, he declined to share the price per ride but hoped it would be reasonable enough to encourage more people to try out the pilotless aerial vehicle.

The experience should be “just like riding in a car,” added He, noting that no helmet or parachute is required. He said the initial length of rides offered by the company would vary from around three minutes to 10 minutes.

When asked about global markets, He said overseas partners had actively reached out since news of the certification, and he expected Ehang could expand overseas in the next few years.

Early lead

According to technology analysts, China’s allowing commercial use of passenger AAVs signifies its innovation and leadership in transportation and mobility. 

“This is a major development and shot across the bow from China showing technology innovation is accelerating,” said Dan Ives, global head of technology research at Wedbush Securities. 

China has already established itself as a global leader in electric vehicles and autonomous driving. Flying taxis, meanwhile, represent “one of the next frontiers for the auto and tech industry,” said Ives, adding that China already has created a clear lead in that space. 

Beijing first released rules for unmanned aircraft flight — vehicles without a pilot on board — in June 2023. The U.S., on the other hand, has yet to roll out comparable regulations.

Instead, Washington’s Federal Aviation Administration last year unveiled general rules for “powered-lift” vehicles, which includes some electric vertical takeoff and landing (eVTOL) aircrafts. 

eVTOL encompasses electric-powered aircrafts designed to carry passengers and take off and land vertically without the need for runways. However, the FAA has focused on those that are manually piloted.

Tu Le, founder of auto industry consultancy Sino Auto Insights, told CNBC that the U.S. has been falling behind China and even the EU in eVTOLs due to this lack of favorable policies, chalking it up to overregulation, lobbying from competing industries or “just plain politics.”

Meanwhile, China has been backing eVTOL technology as part of its “low-altitude economy,” the development of which has become a major policy goal. The term refers to economic activity taking place in airspace below 1,000 meters, well under the around 9,000 meters most commercial planes cruise around.  

In addition to flying taxis and other eVTOLs, examples of the low-altitude economy include unmanned drones for delivery and helicopter-operated air shuttle routes.

The term was recently included in China’s annual work report for 2025, with the government promising to promote its development. Beijing has also committed to boosting consumption in the low-altitude economy, notably in low-altitude tourism, air sports, and consumer drones, as part of a special action plan in March.

Already, China’s low-altitude economy is one of its fastest-growing industries, with it projected to be worth 1.5 trillion yuan ($205 billion) by 2025, and almost double that by 2035, according to a report by the research group Hurun

Competition ramping up 

Sino Auto Insights’ Le also credits China’s progress in the eVTOLs sector to a high degree of domestic competition. 

China has seen a major ramp-up of prospective players in recent years, as companies prepare for a high-tech future that was once confined to science fiction. 

Firms investing in the space have included electric vehicle makers like GAC, Geely and Xpeng.

Xpeng’s flying car division, Xpeng Aero HT, last week, completed a maiden flight of its “Land Carrier” product — a van paired with a 2-man quadcopter, the company told CNBC. 

Xpeng Aero HT said it will hold a pre-sale launch event and complete the construction of its mass production factory in the second half of the year. It also aims to obtain certifications for airworthiness by the end of the year.

Last month, XPeng Motors CEO He Xiaopeng told state media the company plans to mass-produce flying cars by 2026, as China’s low-altitude economy is boosted by supportive policy.

However, despite China leading in eVTOL regulation, it is expected to face competition from international companies also investing in and building various types of air vehicle technologies. 

Some of those companies include international companies like America’s Boeing, France’s Airbus, and the Brazilian firm Embraer, which have taken steps to take advantage of future flying car demand. 

Numerous startups, including Joby Aviation, Archer, and Wisk, in the U.S. are also planning on launching various commercial air taxi services over the next few years. 

According to Wedbush’s Ives, the global electric vertical takeoff and landing (eVTOL) aircraft business could grow into a $30 billion market opportunity over the next decade.

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China’s response to U.S. tariffs will likely focus on stimulus, trade

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Chinese national flags flutter on boats near shipping containers at the Yangshan Port outside Shanghai, China, February 7, 2025. 

Go Nakamura | Reuters

BEIJING — China’s reaction to new U.S. tariffs will likely focus on domestic stimulus and strengthening ties with trading partners, according to analysts based in Greater China.

Hours after U.S. President Donald Trump announced additional 34% tariffs on China, the Chinese Ministry of Commerce called on the U.S. to cancel the tariffs, and vowed unspecified countermeasures. The sweeping U.S. policy also slapped new duties on the European Union and major Asian countries.

Chinese exports to the U.S. this year had already been hit by 20% in additional tariffs, raising the total rate on shipments from China to 54%, among the highest levied by the Trump administration. The effective rate for individual product lines can vary.

But, as has been the case, the closing line of the Chinese statement was a call to negotiate.

“I think the focus of China’s response in the near term won’t be retaliatory tariffs or such measures,” said Bruce Pang, adjunct associate professor at CUHK Business School. That’s according to a CNBC translation of the Chinese-language statement.

Instead, Pang expects China to focus on improving its own economy by diversifying export destinations and products, as well as doubling down on its priority of boosting domestic consumption.

Watch for cascading tariffs as tariffs reroute trade within Asia, says economist

China, the world’s second-largest economy, has since September stepped up stimulus efforts by expanding the fiscal deficit, increasing a consumption trade-in subsidy program and calling for a halt in the real estate slump. Notably, Chinese President Xi Jinping held a rare meeting with tech entrepreneurs including Alibaba founder Jack Ma in February, in a show of support for the private sector.

The policy reversal — from regulatory tightening in recent years — reflects how Beijing has been “anticipating the coming slowdown or even crash in exports,” Macquarie’s Chief China Economist Larry Hu said in a report, ahead of Trump’s latest tariff announcement. He pointed out that the pandemic-induced export boom of 2021 enabled Beijing to “launch a massive regulatory campaign.”

“My view stays the same,” Hu said in an email Thursday. “Beijing will use domestic stimulus to offset the impact of tariffs, so that they could still achieve the growth target of ‘around 5%.'”

Instead of retaliatory tariffs, Hu also expects Beijing will focus on still using blacklists, export controls on critical minerals and probes into foreign companies in China. Hu also anticipates China will keep the yuan strong against the U.S. dollar and resist calls from retailers to cut prices — as a way to push inflationary pressure onto the U.S.

China’s top leaders in early March announced they would pursue a target of around 5% growth in gross domestic product this year, a task they emphasized would require “very arduous work” to achieve. The finance ministry also hinted it could increase fiscal support if needed.

About 20% of China’s economy relies on exports, according to Goldman Sachs. They previously estimated that new U.S. tariffs of around 60% on China would lower real GDP by around 2 percentage points. The firm still maintains a full-year forecast of 4.5% GDP growth.

Changing global trade

What’s different from the impact of tariffs under Trump’s first term is that China is not the only target, but one of a swath of countries facing hefty levies on their exports to the U.S. Some of these countries, such as Vietnam and Thailand, had served as alternate routes for Chinese goods to reach the U.S.

At the Chinese export hub of Yiwu on Thursday, businesses seemed nonchalant about the impact of the new U.S. tariffs, due to a perception their overseas competitors wouldn’t gain an advantage, said Cameron Johnson, a Shanghai-based senior partner at consulting firm Tidalwave Solutions.

He pointed out that previously, the U.S. had focused its trade measures on forcing companies to remove China from their supply chains and go to other countries. But Chinese manufacturers had expanded overseas alongside that diversification, he said.

“The reality is this [new U.S. tariff policy] essentially gives most of Asia and Africa to China, and the U.S. is not prepared,” Johnson said. He expects China won’t make things unnecessarily difficult for U.S. businesses operating in the country and instead will try harder to build other trade relationships.

Since Trump’s first four-year term ended in early 2021, China has increased its trade with Southeast Asia so much that the region is now Beijing’s largest trading partner, followed by the European Union and then the U.S.

The 10 member states of the Association of Southeast Asian Nations (ASEAN) joined China, Japan, South Korea, Australia and New Zealand in forming the world’s largest free trade bloc — the Regional Comprehensive Economic Partnership (RCEP) — which came into being in early 2022. The U.S. and India are not members of the RCEP.

“RCEP member countries will naturally deepen trade ties with one another,” Yue Su, principal economist, China, at the Economist Intelligence Unit, said in a note Thursday.

“This is also partly because China’s economy is likely to remain the most — or at least among the most—stable in relative terms, given the government’s strong commitment to its growth targets and its readiness to deploy fiscal policy measures when needed,” she said.

Uncertainties remain

The extent to which all countries will be slapped with tariffs this week remains uncertain as Trump is widely expected to use the duties as a negotiating tactic, especially with China.

He said last week the U.S. could lower its tariffs on China to help close a deal for Beijing-based ByteDance to sell TikTok’s U.S. operations.

But the level of new tariffs on China was worse than many investors expected.

“Unlike some of the optimistic market forecasts, we do not expect a US-China bilateral grand bargain,” Ting Lu, chief China economist at Nomura, said in a note Thursday.

“We expect tensions between these two mega economies to worsen significantly,” he said, “especially as China has been making large strides in high-tech sectors, including AI and robotics.”

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