US unemployment rate rose again to seven month high of 9.8 percent, US labour department said on Friday, December 3. Only 39,000 jobs were created in November much less than analysts’ expectations. In addition, this figure is very lower than the figure of 172,000 jobs created in October.
Most of the western stock indices were closed down on the back of US unemployment report. The UK’s FTSE 100, Germany’s DAX and France’s CAC fell back registering negative change. Euro inched up to $1.335. However, the jobs number is the first estimate and optimists are expecting the figure may be revised upwards. Jobs were created in the business services, healthcare and mining sectors, but job numbers in the retail and manufacturing sectors fell.
The labour department of the US said there were 15.1 million unemployed in the US, which is equal to 9.8 percent. This is greater than 9.6 percent figure recorded past three months. Analysts say that many people are giving up seeking new jobs there by disappearing from official unemployed people. There was also rise in long term unemployed labour department revealed.
Rise unemployed means less people coming to shops to buy goods. Less consumer spending contributes to slower GDP growth. Many US citizens ceased to be eligible for claiming unemployment benefits by November as per BBC news.
Is this a case for shallowness of freedom of speech in the US? Velma Hart, the chief financial officer for Am Vets, a veteran services organization based in Maryland, is laid off two months after she criticized the US President Obama while directly talking to him in a town hall style meeting in September. The programme was telecast on CNBC.
Velma reportedly told Obama that she was exhausted from defending him and his economic policies and waiting for the change, she expected after voting for him. Obama reportedly admitted it was tough time. The Am Vets’ executive director was quoted by the Washington Post as saying the laying-off action had nothing to do with the Velma’s criticism on Obama’s policies.
The director said, "She got bit by the same snake that has bit a lot of people. It was a move to cut our bottom line." But, removing a chief officer as part of cutting expenditure seems somewhat odd, as the firm will have to lose her experience with the firm and its operations and expertise acquired with that experience.
Velma told CNBC television that she was still supporter of Obama. Her family was facing hard times with the loss of job, she said. She is expecting that there is a job looking for her in coming days. Let us expect the same.
Reuters | Oct 15, 2010 | 6:46pm IST
U.S. Federal Reserve Chairman Ben Bernanke said on Friday that high unemployment and low inflation point to a need for a further easing of U.S. monetary policy, but he offered no details on the central bank’s next step. "There would appear — all else being equal — to be a case for further action," Bernanke said at a conference sponsored by the Boston Federal Reserve Bank.
He said a prolonged period of high unemployment could pose a risk to the recovery’s sustainability and said the low level of inflation meant the risk of a dangerous downward slide in prices was greater than desirable. However, he said policymakers were still weighing how aggressive they should be. The U.S. dollar fell against the euro and yen on Bernanke’s remarks, and stock index futures turned positive. Prices for U.S. government debt rose, but only briefly.
Since the U.S. recovery began showing signs of fading over the summer, the Fed has steadily built up expectations that it would renew its large-scale asset buying to support growth. Most economists expect around $500 billion in easing before the end of the year, a Reuters poll showed.
Bernanke said that while the central bank, which pushed overnight interest rates to zero in December 2008, has the tools to ease financial conditions further, it still needed to proceed cautiously. "Nonconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used," he said.
The central bank’s previous program of bond buying succeeded in lowering borrowing costs, but adding to the Fed’s already enlarged balance sheet has risks and it is hard to calibrate the scope of any further purchases, the Fed chief said. The U.S. dollar has hit its lowest level of the year against a broad basket of currencies on expectations of further Fed easing, drawing the ire of
Article first published as Deflation Fears Linger for the US, Fed Data Shows on Technorati.
Market analysts are predicting that the US may have to face deflation for the coming one or two years. Consumer confidence has fallen to its 13-month low for August month.
Even though the consumer prices rose by 0.3 percent and food prices and energy costs have gone up consumer confidence dropped as they are generally ignored due to their volatility. Speculations are floating that the US Federal Bank may resort to large-scale debt purchases. Some analysts reject for such case saying the data was not so weak.
Reuters index of consumer sentiment dropped from 68.9 in August to 66.6 in September’s preliminary reading, Reuters said in a report (Go to consumer sentiment graph here). Despite encouraging results posted by Oracle Corp and RIM, the Fed data prevented the stock prices from raising that ended nearly flat.
Fed data showed that the household wealth came down by $1.5 trillion to 53.5 trillion due to high unemployment of 9.6 percent. The household wealth had reached its peak $64.2 trillion at the end of 2007 when the US economy began crumbling into recession.
MSN | PTI | 08/09/2010
The increasing American debt poses a national security threat, US Secretary of State today warned, saying it could impact Washington’s ability to exercise "global leadership". "Today more than ever, our ability to exercise global leadership depends on building a strong foundation here at home," Clinton said. "That’s why rising debt and crumbling infrastructure pose very real long-term national security threats," she said in a major foreign policy speech at Council on Foreign Relations, a Washington-based think tank. She warned the increasing debt poses a national security threat, saying the Obama Administration is focusing on this crucial aspect of the country’s economic policy.
She said US President Barack Obama understands this. "You can see it in the new economic initiatives that he announced this week and in his relentless focus on turning the economy around," Clinton said. The rising debt levels pose a national security threat, and it poses a national security threat in two ways, she explained later in response to a question. "It undermines our capacity to act in our own interest, and it does constrain us where constraint may be undesirable. And it also sends a message of weakness internationally," the top diplomat said. She underlined that it is very troubling that the "we are losing the ability not only to chart our own destiny but to have the leverage that comes from this enormously effective economic engine that has powered American values and interests over so many years".
President of the US Barack Obama proposed a six-year plan to rebuild aging roads, railways and runways with an initial $50 billion investment. With a view to leap forward in jobs’ creation Obama declared “We are going to rebuild 150,000 miles (240,000 km) of our roads — that’s enough to circle the world six times. … We’re going to lay and maintain 4,000 miles (6,400 km) of our railways — enough to stretch coast-to-coast,” Obama told a labor rally in Milwaukee. The promise of election campaign, one of Obama’s several initiatives of creating jobs through spending on infrastructure building was immediately rejected by the Republicans. Many believed that Republicans would control House of Representatives after Nov 2 congressional elections. With fellow Democrats facing punishment from recession-weary voters in November, Obama is under pressure to do more to create jobs and bring down the stubbornly high 9.6 percent unemployment rate, even as economists agree he has few good options left.
Nearly $14 trillion economy would not change significantly in just 2 months ahead of elections. Economists point out that investments in infrastructure typically do not stimulate the economy quickly. A centerpiece of Obama’s new plan is a proposal for the U.S. Congress to increase and permanently extend a tax credit for business research and development. The tax credit proposal, which was widely expected by investors, would cost $100 billion over 10 years. He is to lay out the plan on Wednesday in Cleveland. While Obama declared some jobs would be created immediately by the infrastructure overhaul, a senior administration official told reporters the plan would not create jobs until 2011.
Yet another oil rig seems exploded in the Gulf of Mexico. Though it is not known whether it is a rig or a production platform that is on fire, muted response from the facility to reporters’ queries is feeding speculations that the rig is on fire. US coastguard has reached the site which is said to be 90 miles away from Vermilion Bay along Louisiana coast, and rescued all 13 workers working on the platform shifting them to another platform. One worker is said to be injured. The facility is owned by Mariner Energy Company. Helicopters, boats and aircraft are deployed to the site of burning.
Mariner Energy has not provided any information regarding the fire till news last came in. It is also learned that oil is not seen leaking into the sea. As the news of the explosion spread Marine Energy shares dipped by 5% to $22.30. Shares of Apache Corp also came down by 1.8% as it is expected to buy the Mariner Energy.