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The United Nations and Turkey have negotiated a two-month extension to an agreement allowing Ukraine farmers to continue to export of millions of tons of grain. That’s good news for Dutch farmer Kees Huizinga, who has been farming in Ukraine for 20 years. Anna Kosstutschenko reports.
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Fewer Americans applied for jobless benefits last week after a previous spike that some took as a sign that higher interest rates were finally cooling the labor market.

Applications for jobless claims for the week ending May 6 fell by 22,000 to 242,000, from 264,000 the week before, the Labor Department reported Thursday. The weekly claims numbers are broadly as representative of the number of U.S. layoffs.

The four-week moving average of claims, which flattens some of the week-to-week fluctuations, ticked down by 1,000 to 244,250. Analysts have pointed to a sustained increase in the four-week averages as a sign that layoffs are accelerating, but are reluctant to predict that a spike in layoffs is imminent.

Overall, 1.8 million people were collecting unemployment benefits the week that ended April 29, about 8,000 fewer than the previous week.

Since the pandemic purge of millions of jobs three years ago, the U.S. economy has added jobs at a breakneck pace and Americans have enjoyed unusual job security. That’s despite interest rates that have been rising for more than a year and fears of a looming recession.

Early this month, the Fed raised its benchmark lending rate for the 10th time in a row in its bid to cool the economy and bring down four-decade high inflation. Though the labor market still favors workers, there have been some recent indications that the Fed’s policy actions are working.

In April, U.S. employers added a healthy 253,000 jobs and the unemployment rate dipped to 3.4%, matching a 54-year low. But the figures for February and March were revised lower by 149,000 jobs, potentially signaling that the Fed’s rate policy strategy is starting to cool the job market.

The government also recently reported that U.S. job openings fell in March to the lowest level in nearly two years.

The Fed is hoping to achieve a so-called soft landing — lowering growth just enough to bring inflation under control without causing a recession. Economists are skeptical, with many expecting the U.S. to enter a recession later this year.

Last month, the Commerce Department reported that U.S. economy slowed sharply from January through March, decelerating to just a 1.1% annual pace as higher interest rates hammered the housing market and businesses reduced inventories.

There have been an increasing number of high-profile layoffs recently, mostly in the technology sector, where companies added jobs at a furious pace during the pandemic. IBM, Microsoft, Salesforce, Twitter, Lyft, LinkedIn and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November.

But it’s not just the tech sector that’s trimming staff. McDonald’s, Morgan Stanley and 3M also announced layoffs recently. 
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President Joe Biden on Wednesday sought to assure Americans that the U.S. would not default on its debts as the White House and top congressional leaders conducted tense, protracted budget negotiations in which Republicans were seeking substantial spending cuts in exchange for raising the debt limit.

“I’m confident that we’ll get the agreement on the budget and America will not default,” Biden said as he prepared to leave Washington for a Group of Seven summit in Japan with the leaders of some of the world’s biggest economies. “And every leader in the room understands the consequences if we fail to pay our bills. And it would be catastrophic for the American economy and the American people if we didn’t pay our bills.”

The White House argues that the two events — setting a budget and raising the debt ceiling to pay for expenses the U.S. has already incurred — should not be linked, as they are in the budget presented by Republican House Speaker Kevin McCarthy. Biden insists that Congress raise the current $31.4 trillion debt ceiling without conditions on future spending.

McCarthy’s budget seeks future spending caps, new work requirements for able-bodied public assistance beneficiaries and changes to approve domestic energy projects at a faster pace.

Biden said he had appointed senior members of his administration to negotiate with McCarthy’s team in his absence. An administration official told VOA that the team includes one of Biden’s closest, longtime advisers, Steve Ricchetti; the head of his budget office, Shalanda Young; and the head of his legislative affairs team, Louisa Terrell.

Biden added that the negotiators met Tuesday night — just hours after Biden ended his meeting with McCarthy and congressional leaders — and that they would also meet Wednesday.

“To be clear, this negotiation is about the outlines of what the budget will look like, not about whether or not we’re going to, in fact, pay our debts,” the president said. “Leaders all agreed we will not default.”

McCarthy said default was never his plan.

“We already had taken default off the table because the House Republicans passed a bill that raised the debt ceiling, limited our future spending, saved taxpayers money by being able to pull back unspent money and waste and actually grow our economy by making our economy stronger and helping lifting people out of poverty into work,” the House speaker told reporters outside the West Wing of the White House on Tuesday.

Biden has indicated he is willing to talk about future spending limits to pare chronic overspending by the government, where annual trillion-dollar deficits have been common for years. But it’s not clear what parts of McCarthy’s plan he is willing to swallow.

“I’m not going to accept any work requirements that go much beyond what is already — what I voted for years ago — for the work requirements that exist,” Biden said Wednesday when asked by reporters. “But it’s possible there could be a few others, but not anything of any consequence.”

Yellen’s warning

The negotiations come under a tight deadline, with Treasury Secretary Janet Yellen warning that the U.S. could run out of cash to meet all its obligations by June 1 and then could default on some of them.

“A default would crack open the foundations upon which our financial system is built. And it’s very conceivable that we’d see a number of financial markets break, with worldwide panic triggering margin calls, runs and fire sales,” she said Tuesday before the leaders met.

Although the current debt limit was reached in January, Yellen and U.S. financial officials have taken what they describe as “extraordinary measures” to juggle U.S. spending accounts to keep paying the government’s bills.

The United States has never defaulted on its debt. Top government officials have warned that doing so would have immediate and widespread consequences inside the U.S., including massive U.S. worker layoffs and delayed payments to U.S. pensioners, government contractors and health care providers treating older Americans.

Congress has raised the debt ceiling 78 times under both Democratic and Republican presidents, including three times during the four-year term of former President Donald Trump.

If an agreement is reached in Washington’s politically charged atmosphere, it might be a matter of semantics whether a debt ceiling increase and a tandem cut in future spending are linked. Both Biden and congressional Republicans want to be able to claim victory.

The two sides are debating to what extent the debt ceiling would be raised and for how long, as well as specific spending cuts House Republicans recently approved in a narrow vote over united Democratic opposition.
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U.S. President Joe Biden, House Speaker Kevin McCarthy and other top congressional leaders appeared no closer Tuesday to a deal aimed at reaching agreement on raising the country’s debt ceiling so the government can borrow more to pay its existing obligations.     

The impasse comes amid dire warnings from the U.S. Treasury that a default could cause “worldwide panic” and “catastrophe,” and as Biden prepares to leave Wednesday for a summit in Japan with the world’s top seven economies.     

The looming crisis also scotched Biden’s plans to visit Papua New Guinea and Australia after the summit, the White House said in a statement.      

“It’s unfortunate we are where we are,” McCarthy said after the hourlong Oval Office meeting ended. “But the good thing about it is Republicans always look to find a solution.”    

Senate Majority Leader Charles Schumer, a Democrat, said the group did agree on some key issues.     

“We all agreed that the only path forward is to reach a bipartisan agreement anchored in common ground,” he said. “We all agree that default is not an acceptable option and must be avoided.”    

And Biden said his staff would continue to work toward a deal in his absence.   

“There’s still work to do, but I made it clear to the speaker and others that we’ll speak regularly over the next several days, and the staff’s going to continue meeting daily to make sure we do not default,” he said.     

Also Tuesday, Treasury Secretary Janet Yellen warned that “a default would crack open the foundations upon which our financial system is built. And it’s very conceivable that we’d see a number of financial markets break, with worldwide panic triggering margin calls, runs and fire sales.”    

Yellen said, “If Congress does not address the debt limit, there are no good options the Treasury or the government can use to save us from catastrophe.”  

Biden has insisted that Congress raise the current $31.4 trillion debt ceiling without conditions on future spending. McCarthy and congressional Republicans have called for substantial cuts in future government spending in exchange for raising the debt limit for a year.    

That scenario would require a new round of debt ceiling negotiations amid the early phase of the 2024 presidential primary elections.

Although the current debt limit was reached in January, Yellen and U.S. financial officials have taken what they describe as “extraordinary measures” to juggle U.S. spending accounts to keep paying the government’s bills. She said the U.S. could run out of cash to meet all its obligations by June 1 and then could default on some of them.     

The United States has never defaulted on its debt. Yellen and other top government officials have warned that doing so would have immediate and widespread consequences inside the U.S., including massive U.S. worker layoffs and delayed payments to U.S. pensioners, government contractors and health care providers treating older Americans.      

The U.S. Congress has raised the debt ceiling 78 times under both Democratic and Republican presidents, including three times during the four-year term of former President Donald Trump. 

While Biden has said he would not link an increase in the debt ceiling to future government spending cuts, he has said that separately, he is willing to talk about future spending limits to pare the chronic overspending by the government, where annual trillion-dollar deficits have been common for years.     

If an agreement is reached in Washington’s politically charged atmosphere, it might be a matter of semantics whether a debt ceiling increase and a tandem cut in future spending are linked. Both Biden and congressional Republicans want to be able to claim victory.     

The two sides are debating to what extent the debt ceiling would be raised and for how long, as well as specific spending cuts Republicans in the House of Representatives recently approved in a narrow vote over united Democratic opposition.      

The Republicans have called for future spending caps, new work requirements for able-bodied poor people receiving government financial assistance and implementing changes to approve domestic energy projects at a faster pace.    

Some information in this story came from The Associated Press. Margaret Besheer contributed to this report.
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