US interest rates to rise again; High minimum wages may cost South Africa dear; ‘FB will track non-users, too’

1 US interest rates to rise again (Jana Kasperkevic in The Guardian) Federal Reserve chair Janet Yellen had a message for Wall Streeters anxiously wanting to depart for the long weekend: interest rate hikes are coming.

The US central bank is expected to announce two to three interest rate hikes this year after it increased rates in December for the first time in nearly a decade. Yellen said that the economy is continuing to improve despite the weak growth reported in the first quarter.

Before Yellen’s statement, the US commerce department revised up its gross domestic product figured for the first quarter. US GDP – the broadest measure of the health of the economy – rose at 0.8% instead of the 0.5% reported last month. The Atlanta Federal Reserve is currently estimating second-quarter GDP rising at a 2.9% rate.

Yellen, too, said that she expects GDP to pick up and the labor market to continue to improve. The Fed will continue to monitor incoming data and will assess the risks to the outlook, she said. While she did not mention what those risks are, the Fed had previously focused on risks posed by Britain’s potential exit from the European Union, “Brexit”, and by the lingering uncertainty over China’s economy.

Yellen also pointed out that the unemployment rate is nearing full employment, labor participation has increased in the past few months, and that oil prices and dollar depreciation, which can influence inflation, have both stabilized.

“It’s appropriate for the Fed to gradually and cautiously increase our overnight interest rate over time,” said Yellen, adding: “Probably in the coming months such a move would be appropriate.”

2 High minimum wages may cost South Africa dear (Johannesburg Times) Ratings agency Fitch has warned the ANC to avoid introducing populist measures such as a minimum wage in the run-up to local elections, while Cosatu has threatened to strike over the government’s slow implementation of the proposed policy.

Fitch, which rates South Africa at BBB-, one notch above speculative grade, is expected to publish a review of the country’s debt rating on June 3. The government is mulling the implementation of a national minimum wage but has not set a date for its introduction.

“The authorities may see a need to react to the discontent about insufficient improvement to living standards by pushing costly social programmes,” Fitch head of EMEA sovereign ratings Jan Friederich told a banking conference, referring to the upcoming elections.

“Authorities may feel, if they have a poor showing, that there is a need for quick fixes like the introduction of a high minimum wage that would appear to help the poor but may also discourage investment,” he said.

3 ‘FB will track non-users, too’ (Khaleej Times) In a bid to expand its user base, social media giant Facebook has announced it will begin displaying ads to web users who are not members of its social network.

“Facebook will use cookies, ‘like’ buttons and other plug-ins embedded on third-party sites to track members and non-members alike,” a report in The Wall Street Journal said. The company said it will be able to better target non-Facebook users and serve relevant ads to them.

“Publishers and app developers have some users who are not Facebook users. We think we can do a better job powering those ads,” Andrew Bosworth, vice president of Facebook’s ads and business platform, was quoted as saying.

Meanwhile, Facebook’s practices have come under criticism from regulators in Europe over privacy concerns. Facebook began displaying a banner notification at the top of its News Feed for users in Europe, alerting them to its use of cookies as mandated under an EU directive.

Facebook believes that targeted advertising can more accurately target non-members using the vast amounts of data it already has on the nearly 1.7 billion people who use the site, the report said. The company said that “it can use that data to make inferences about the behaviour of non-members, an approach known as “lookalike” targeting”.


About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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