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WASHINGTON (Reuters) – U.S. job openings fell by the most in nearly 2-1/2 years in August, suggesting that the labor market was starting to cool as the economy grapples with higher interest rates aimed at dampening demand and taming inflation.

Despite the fifth month of decreases in job openings this year reported by the Labor Department in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday, vacancies remained above 10 million for the 14th straight month.

While there were 1.7 job openings for every unemployed person in August, down from two in July, this closely watched measure of supply-demand balance in the labor market remained above its historical average. Layoffs also stayed low, signs of a still-tight labor market, which likely keep the Federal Reserve on its aggressive monetary policy tightening path.

“Even as higher interest rates and inflation, and weaker business and consumer confidence are beginning to tamp down labor market activity, the labor market still remains healthy,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “We expect that the Fed is not yet ready to pause.”

Job openings dropped 1.1 million to 10.1 million on the last day of August, the lowest level since mid-2021. August’s decline was the largest since April 2020, when the economy was reeling from the first wave of the COVID-19 pandemic. Economists polled by Reuters had forecast 10.775 million vacancies.

The broad decrease in job openings was led by healthcare and social assistance, with a decline of 236,000. There were 183,000 fewer job openings in other services, while vacancies decreased by 143,000 in the retail trade industry. Fewer job openings were also reported in the financial activities, professional as well as leisure an hospitality industries.

Vacancies in the healthcare and leisure industries declined even though employment in the two sectors remains below its pre-pandemic levels, leading some economists to speculate that other factors besides higher borrowing costs were behind the cool off in demand for workers.

“The drop in openings could reflect healthcare providers becoming more accustomed to operating under labor shortages and forgoing hiring,” said Veronica Clark, an economist at Citigroup in New York.

All four regions saw decreases, with a big decline in the Midwest. The job openings rate fell to 6.2% from 6.8% in July. Hiring increased moderately, keeping the hiring rate at 4.1%.

Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.

Graphic: JOLTS – https://graphics.reuters.com/USA-STOCKS/byprjzmebpe/jolts.png

WORKERS STILL QUITTING

The Fed is trying to cool demand for labor and the overall economy to bring inflation down to its 2% target. The U.S. central bank has since March hiked its policy rate from near zero to the current range of 3.00% to 3.25%, and last month signaled more large increases were on the way this year.

The drop in job openings was accompanied by an increase in the unemployment rate to 3.7% from 3.5% in July. The jobs-workers gap fell to 2.5% of the labor force, or 4.0 million workers, from 3.4% in July, which could slow wage inflation. It has decreased from 3.6% of the labor force in March.

“The Fed will welcome this apparent decline in excess demand for labor in the hope that it eases wage pressures,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. “However, the ratio of job openings to unemployment in August was at about the same level as seen in the fourth quarter of 2021, which at that time was a record high.”

Graphic: Job openings unemployment and wage growth – https://graphics.reuters.com/USA-STOCKS/akpezdexxvr/jobopenings.png

The number of people voluntarily quitting their jobs climbed to 4.2 million from 4.1 million in July. Resignations increased in the accommodation and food services industry, where 119,000 more people quit, but decreased by 94,000 in the professional

and business services sector.

The quits rate, viewed by policymakers and economists as a measure of job market confidence, was unchanged at 2.8%.

Layoffs rose to 1.5 million from 1.4 million in July. There were increases in retail trade, accommodation and food services as well as professional services. Layoffs, however, fell in the construction industry. There were fewer layoffs in the Northeast and Midwest. But the South reported an increase, while the West saw a jump, likely reflecting job cuts in the technology sector.

The layoffs rate rose to 1.0% from 0.9% in the prior month.

“The heat of the labor market is slowly coming down to a slow boil as demand for hiring new workers fades,” said Nick Bunker, head of economic research at Indeed Hiring Lab. “This is still very much a job seekers’ labor market, just one with fewer advantages for workers than a few months ago.”

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

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MELBOURNE (Reuters) – Australia’s Federal Court will hear an appeal by Santos Ltd on Nov. 15-16 seeking to resume drilling at its $3.6 billion Barossa gas project off northern Australia over the objections of Tiwi Island indigenous land owners.

Chief Justice James Allsop on Monday granted an expedited hearing for Santos’ appeal and on Wednesday released orders setting the hearing dates.

Santos had to stop drilling as a federal court judge on Sept. 21 found its drilling permit was invalid, as contended by Tiwi Islander Dennis Tippakalippa, who said the company had not properly consulted traditional owners about the project.

The company aims to start producing gas from the Barossa project in 2025.

(Reporting by Sonali Paul; Editing by Muralikumar Anantharaman)

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TAIPEI (Reuters) – Taiwan’s exports likely rose for the 27th straight month in September though at a slower pace than in August, amid fears of a global recession, uncertainties due to the Ukraine conflict, and COVID-19 flare-ups in China, according to a Reuters poll.

Taiwan, a global hub for chip production and a key supplier to Apple Inc, is one of Asia’s leading exporters of technology goods. The trade data is seen as an important gauge of world demand for tech gadgets.

Exports last month were estimated to have risen 1.5% from a year earlier, a Reuters poll of 19 analysts showed on Wednesday, slightly slower than the 2% rise in August.

The export forecasts varied widely between a contraction of 5.83% and expansion of 5.1%, reflecting uncertainties over the global economy, supply chain disruptions due to pandemic lockdowns and power shortages in China, and Russia’s invasion of Ukraine.

Taiwan’s Finance Ministry has predicted September exports could be in a range of a 3% contraction to a 1% expansion from a year earlier.

Separately, the consumer price index was expected to have risen 2.7% in September from a year earlier, a faster rate than 2.66% in August.

The inflation data will be released on Thursday, followed by trade data on Friday.

(Poll compiled by Arsh Mogre and Carol Lee; Reporting by Ben Blanchard; Editing by Kim Coghill)

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By Neil Jerome Morales

MANILA (Reuters) – Philippine annual inflation quickened to 6.9% in September, hitting its fastest pace in four years, firming up expectations the central bank will hike rates further before the year ends.

The September inflation rate, which was above the 6.7% forecast in a Reuters poll, was driven mainly by high food and utility prices and brought the average rate in the nine months to September to 5.1%, the statistics agency said on Wednesday, well outside the central bank’s 2% to 4% target.

The faster-than-expected inflation rate reinforced expectations the Bangko Sentral ng Pilipinas (BSP), which has so far raised rates by a total of 225 basis points this year, would deliver more rate hikes at its November and December meetings.

“The BSP is prepared to take further policy actions to bring inflation toward a target-consistent path over the medium term, consistent with its primary objective to promote price stability,” the BSP said in a statement.

ING Bank economist Nicholas Mapa said in a statement he expects the central bank to lift its key policy rate, currently at 4.25%, by 50 basis points at each of its two remaining meetings this year in to tame inflation.

Mapa said food prices would stay high due to crop damage from a recent typhoon, consistent with the expectations of the statistics agency which said on Wednesday, inflation could further quicken in October.

Core inflation, which strips out volatile food and fuel items, eased to 4.5% in September from 4.6% in August, the statistics agency said.

(Additional reporting by Enrico Dela Cruz; Writing by Karen Lema; Editing by Edmund Klamann and Kanupriya Kapoor)

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By Anirban Sen and Tom Hals

(Reuters) – Billionaire Elon Musk is proposing to proceed with his original $44 billion bid to take Twitter Inc private, security filings showed on Tuesday, calling for an end to a lawsuit by the social media company that could have forced him to pay up, whether he wanted to or not. An agreement would put the world’s richest person in charge of one of the most influential media platforms and end months of litigation that damaged Twitter’s brand and fed Musk’s reputation for erratic behavior.

Musk, the chief executive of electric car maker Tesla Inc, will take over a company he originally committed to buying in April, but soon soured on. Late on Tuesday he tweeted that buying Twitter would speed up his ambition to create an “everything app” called X.

Graphic: Elon Musk vs Twitter – https://fingfx.thomsonreuters.com/gfx/mkt/znvneylmkpl/Pasted%20image%201664901210577.png

The renewed offer comes ahead of a highly anticipated face-off between Musk and Twitter in Delaware’s Court of Chancery on Oct. 17, in which the social media company was set to seek an order directing Musk to close the deal for $44 billion.

Musk sent Twitter a letter on Monday that said he intended to proceed with the deal on the original terms if the Delaware judge stayed the proceedings. A source familiar with Twitter’s team told Reuters that at a court hearing on Tuesday morning the judge requested the two sides report back in the evening.

It was not immediately clear why Musk chose to abandon his fight, although some pointed to his scheduled deposition.

“He was about to get deposed and a lot of uncomfortable facts were going to come out,” said Eric Talley, a professor at Columbia Law School.

Twitter received Musk’s letter and intended to close the deal at the original price, a spokesperson told Reuters. Twitter did not say whether it accepted Musk’s offer.

Musk, one of Twitter’s most prominent users, said in July he could walk away without penalty because the number of bot accounts was much higher than Twitter’s estimate of less than 5% of users. Bots are automated accounts, and their use can lead to overestimations of how many humans are on the service, which is important for advertising rates and the overall value of the service.

Twitter’s legal team on Sept. 27 said that scientists employed by Musk estimated the number of fake accounts on the platform at 5.3% and 11%.

“None of these analyses so far as we can tell remotely supported what Mr. Musk told Twitter and told the world,” Twitter lawyer Bradley Wilson told the court.

The original deal was “a very seller-friendly agreement that would be very difficult to get out of,” said Adam Badawi, a law professor at UC Berkeley. Musk realized, he said, “in all likelihood it was going to result in forcing him to close at $54.20 a share.”

Musk was relatively quiet on Twitter during the day, but late on Tuesday he tweeted that “Twitter probably accelerates X by 3 to 5 years”.

That echoed suggestions he made to Twitter staff in June about creating a “super app” or marketplace for different apps and features like WeChat, which is popular in China. Musk also has said he wants to create a money transfer feature.

FINANCING

A settlement between the two sides would revive fears among Twitter’s users about Musk’s plans for the platform, which has removed prominent politically conservative voices. Supporters of Donald Trump hope that Musk will reactivate the account of the former U.S. president, who was banned after the Jan. 6, 2021, attack on the U.S. Capitol by his supporters.

Musk has used Twitter to stir controversy, including on Monday when he floated a peace plan for the Ukraine-Russia war that drew swift condemnation from Ukraine’s president, Volodymyr Zelenskiy.

Bloomberg was the first to report Musk was willing to pay the original price. Musk also said his offer was contingent on stopping the legal proceedings.

A settlement at the original price would also allow Musk to finance the transaction without any complications. If Musk and Twitter had renegotiated the price, it would have technically allowed committed backers to walk away.

Musk has already sold $15.4 billion worth of Tesla shares since agreeing to buy Twitter.

Musk has also secured a financing commitment from banks – including Morgan Stanley, Bank of America Corp, Mitsubishi UFJ Financial Group Inc and Barclays Plc – to provide a $12.5 billion margin loan to support his Twitter acquisition.

The banks that agreed to finance the acquisition are likely to lose hundreds of millions of dollars on the deal because they would struggle to attract investors to buy the debt, given the downturn in markets since the deal was signed.

However, the banks agreed to provide the financing irrespective of whether they can sell the loans and face long legal odds freeing themselves from the financing commitment, according to regulatory filings.

Since Twitter has already received shareholder support for the sale to Musk, the deal could close quickly in the coming weeks if the two sides were to settle on the original terms.

(Reporting by Nivedita Balu in Bengaluru, Tom Hals in Wilmington, Del., Katie Paul in Palo Alto, Calif., and Anirban Sen in New York; Additional reporting by Hyunjoo Jin and Krystal Hu in San Francisco, Diane Bartz in Washington, Sheila Dang in Dallas, and Chibuike Oguh in New York; Editing by Arun Koyyur, Kenneth Li, Peter Henderson and Matthew Lewis)

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By Anirban Sen

(Reuters) – Elon Musk’s U-turn on buying Twitter Inc could not have come at a worse time for the banks funding a large portion of the $44 billion deal and they could be facing significant losses.

As in any large acquisition, banks would look to sell the debt to get it off their books. But investors have lost their appetite for riskier debt such as leveraged loans, spooked by rapid interest rate hikes around the world, fears of recession and market volatility driven by Russia’s invasion of Ukraine.

While Musk will provide much of $44 billion by selling down his stake in electric vehicle maker Tesla Inc and by leaning on equity financing from large investors, major banks have committed to provide $12.5 billion.

They include Morgan Stanley, Bank of America Corp and Barclays Plc.

Mitsubishi UFJ Financial Group Inc, BNP Paribas SA, Mizuho Financial Group Inc and Societe Generale SA are also part of the syndicate.

Noting other recent high-profile losses for banks in leveraged financing, more than 10 bankers and industry analysts told Reuters the outlook was poor for the banks trying to sell the debt.

The Twitter debt package is comprised of $6.5 billion in leveraged loans, $3 billion in secured bonds, and another $3 billion in unsecured bonds.

“From the banks’ perspective, this is less than ideal,” said Wedbush Securities analyst Dan Ives. “The banks have their backs to the wall – they have no choice but to finance the deal.”

Leveraged financing sources have also previously told Reuters that potential losses for Wall Street banks involved in the Twitter debt in such a market could run to hundreds of millions of dollars.

Societe Generale did not respond to a request for comment while the other banks declined to comment. Twitter also declined to comment. Musk did not immediately respond to a request for comment.

Just last week, a group of lenders had to cancel efforts to sell $3.9 billion of debt that financed Apollo Global Management Inc’s deal to buy telecom and broadband assets from Lumen Technologies Inc.

That came on the heels of a group of banks having to take a $700 million loss on the sale of about $4.55 billion in debt backing the leveraged buyout of business software company Citrix Systems Inc.

“The banks are on the hook for Twitter — they took a big loss on the Citrix deal a few weeks ago and they’re facing an even bigger headache with this deal,” said Chris Pultz, portfolio manager for merger arbitrage at Kellner Capital.

Banks have been forced to pull back from leveraged financing in the wake of Citrix and other deals weighing on their balance sheet and that is unlikely to change anytime soon.

The second quarter also saw U.S. banks start to take a hit on their leveraged loans’ exposure as the outlook for dealmaking turned sour. Banks will begin reporting third-quarter earnings next week.

(Reporting by Anirban Sen, additional reporting by Megan Davies, Lananh Nguyen, Sheila Dang and Hyunjoo Jin; Writing by Paritosh Bansal; Editing by Edwina Gibbs)

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By Daniel Wiessner

(Reuters) – McDonald’s Corp has temporarily beat back a lawsuit by 52 Black former franchise owners who claim the fast-food giant set them up for failure by steering them towards crime-ridden, low-income neighborhoods.

A federal judge in Chicago dismissed the 2020 lawsuit in a written order last week, but gave the plaintiffs until October 21 to file an amended complaint. The judge did not explain why he dismissed the case.

The plaintiffs claim McDonald’s has not offered profitable restaurant locations and growth opportunities to Black franchisees that were on the same terms as white franchisees, despite its public commitment to diversity and Black entrepreneurship. They are seeking up to $1 billion in damages.

McDonald’s has denied wrongdoing and has said that while it may recommend store locations, franchisees make the final decisions.

(Reporting by Daniel Wiessner in Albany, New York; Editing by Bernadette Baum)

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Airlines will be required to give flight attendants at least 10 hours off duty between shifts, one more hour than currently, under a rule announced Tuesday by the Federal Aviation Administration.

Acting FAA Administrator Billy Nolen said that the extra hour of rest would contribute to safety.

The rule goes into effect in 30 days, and airlines have up to 90 days to comply.

Congress directed the FAA in 2018 to increase the rest requirement for flight attendants and eliminate a provision that let crews work with less rest under some circumstances.

“It took us way too long, but we are finally here,” Nolen said at a news conference at Reagan Washington National Airport, where he was flanked by more than a dozen flight attendants.

Current federal rules allow flight attendants to work up to 14 hours in a day and get nine hours of rest between shifts.

The Association of Flight Attendants has fought for years for a longer break between shifts. The union thought it had prevailed four years ago, when Congress voted by large margins to require more rest. The union’s president, Sara Nelson, appeared with Nolen at the news conference and accused the Trump administration of attempting to kill the expansion through regulatory foot-dragging.

Union officials have pointed to a 2020-2021 increase in incidents involving unruly passengers as demonstrating the need to give cabin crews more rest between shifts. Airlines have reported fewer incidents since the federal requirement to wear face masks on flights ended in April.

“This is a small handful of people making it hell for flight attendants on the front lines,” Nelson said.

The FAA took public comments on the extra rest requirement in both 2019 and 2021 and received more than 1,000 comments from airlines, flight attendants and the public.

Airlines for America, a trade group representing the largest U.S. airlines, said safety is always the industry’s top priority, and “having rested and alert flight attendants who are prepared to carry out their responsibilities, including cabin safety and other duties, is critical to this goal.” The group said it supports “scientifically validated and data-driven countermeasures to prevent fatigue.”

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THE HAGUE, Netherlands (AP) — The Dutch government unveiled details of its planned energy price cap for households Tuesday, together with the outline of a subsidy system aimed at easing the pain for small-to-medium-sized businesses that use a lot of power.

The moves come amid soaring prices for gas and electricity caused by Russia’s war in Ukraine, and moves across Europe to get a grip on skyrocketing energy bills that have forced some businesses in the Netherlands to halt production.

The government said its consumer price cap will start in January and limit electricity to a maximum of 0.40 euros ($0.40) per kilowatt hour while gas will be a maximum of 1.45 euros ($1.45) per cubic meter. Households will still have to pay market rates on any gas they use each month over 1,200 cubic meters or electricity over 2,900 KwH.

It said the cap should save a family with average energy use some 2,500 euros in 2023.

To help families hit by a cost-of-living crisis this year, all households will receive a discount of 190 euros on their energy bills in November and December, the government said in a statement.

At the same time, the government announced it is establishing a scheme to compensate higher energy costs for small and medium businesses that will be based on their energy use and their turnover.

Economic Affairs Minister Micky Adriaansens said that many companies often can’t avoid high energy bills because of the nature of their business and can’t raise their prices enough to cover the extra costs. “That’s why the government is now introducing extra support” via the new system, Adriaansens said.

Exact details of the system are being worked out to ensure they adhere to European Union rules on state support for businesses, meaning it will likely not be available until the start of next year. The government said it is working on extra support for businesses until the new subsidies kick in.

The new subsidies were announced as a Dutch government delegation led by Prime Minister Mark Rutte met German Chancellor Olaf Scholz and other ministers in Berlin for talks that covered issues including moves to tackle energy price rises.

German Economy Minister Robert Habeck and his Dutch counterpart, Minister for Climate and Energy Policy Rob Jetten, said Germany and the Netherlands were exploring possible cooperation to promote the market ramp-up of hydrogen produced using renewable energy.

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(Reuters) – Chipmaker Micron Technology is planning to invest as much as $100 billion over the next 20 years to build a computer chip factory complex in upstate New York, the New York Times reported on Tuesday.

The news comes after U.S. President Joe Biden signed the CHIPS and Science Act into law in August, which included provision of $52.7 billion in subsidies for U.S. semiconductor production and research.

The act aims to revitalize domestic chip manufacturing and boost U.S. competitiveness with China.

Over the next 20 years, the project will generate nearly 50,000 jobs, with site preparation for the factory scheduled for next year, the report added.

Micron did not immediately reply to a Reuters request for comment.

Last week, the company warned of slowing demand for PCs and smartphones and said it planned to reduce investments by 30%.

(Reporting by Savyata Mishra in Bengaluru; Editing by Anil D’Silva)

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