The daily business briefing: October 5, 2018

1.

The U.S. economy added 134,000 nonfarm jobs in September, roughly half the gain seen in August but still enough to bring the unemployment rate down to a 49-year low of 3.7 percent, the Labor Department reported Friday. The number of new jobs fell short of expectations. Economists polled by MarketWatch had forecast a gain of 168,000. Average hourly wages rose by 0.3 percent to $27.24 an hour, with the 12-month rate for wage growth slowing to 2.8 percent from 2.9 percent the previous month, which was a nine-year high. The Labor Department also revised the employment gains for July and August upward. Economist cautioned against reading too much into the low September job growth, since it was probably affected by displacements and other distortions caused by Hurricane Florence. [MarketWatch, Bloomberg]

2.

Computer maker Lenovo's stock plunged by more than 15 percent on Friday as many Chinese tech shares struggled. The decline came after Bloomberg Businessweek reported that data center equipment run by Amazon Web Services and Apple may have been used for surveillance by the Chinese government through a tiny microchip inserted when the equipment was being manufactured. Businessweek said the chips, possibly provided by Chinese server company Super Micro, provided data on U.S. companies' intellectual property and trade secrets. Apple, AWS, and Super Micro disputed the report. Apple shares fell by 1.8 percent and Amazon lost 2.2 percent Thursday. Lenovo said Super Micro "is not a supplier to Lenovo" and that the company takes "extensive steps to protect the ongoing integrity of our supply chain." [CNBC]

3.

Concerns over rising interest rates pushed stocks sharply lower on Thursday. Internet and technology companies took some of the heaviest losses, with Google parent Alphabet falling by 2.8 percent in its biggest drop since late April, and Microsoft losing 2.1 percent. The tech-heavy Nasdaq Composite fell by 1.8 percent, while the Dow Jones Industrial Average and the S&P 500 lost 0.7 percent and 0.8 percent, respectively. The yield on the 10-year Treasury note jumped to a seven-year high of 3.18 percent Thursday after strong economic data was released Wednesday. U.S. stock futures traded cautiously early Friday ahead of reaction to the September jobs report, with futures for the Dow Jones Industrial Average up by less than 0.1 percent and those of the S&P 500 down by less than 0.1 percent. The Nasdaq-100 was down by 0.2 percent. [The Associated Press, Fox Business]

4.

Elon Musk mocked federal regulators on Thursday, less than a week after settling a lawsuit filed by the Securities and Exchange Commission, which accused him of misleading investors with a tweet in which he claimed he had funding lined up to take electric car maker Tesla private. The SEC had sought to have Musk removed as CEO, but under the deal he was removed as board chairman but remained chief executive and accepted a $20 million fine. Musk on Thursday called the agency the "Shortseller Enrichment Commission" in a tweet. The post appeared the same day that federal District Judge Alison J. Nathan asked the SEC and lawyers for Musk and Tesla to submit justification for their settlement by next Thursday. [The New York Times]

5.

Congressional Republicans have reached a tentative deal to hike pay for the nation's two million civilian federal workers by 1.9 percent, despite an effort by President Trump to freeze their pay, The Washington Post reported Thursday, citing lawmakers and aides. The preliminary deal between House and Senate Republicans seeks to lift the salary freeze on hundreds of executive-level employees and appointees, including Cabinet members and Vice President Mike Pence. Democrats oppose including the executive-level officials in the deal. GOP lawmakers, including Rep. Barbara Comstock (R-Va.), had pushed for Trump to reverse his August decision against the raises, and colleagues credited Comstock for getting others to agree. "This wouldn't be resolved without her help, or without President Trump's booming economy," said Rep. Tom Graves (R-Ga.), who chairs the spending subcommittee handling the matter. [The Washington Post]