Jim Genova | Facebook | Friday, November 13, 2009 | 11:40pm
This morning the U.S. Department of Labor released its weekly jobless claims figures for the week ending 7 November. Coming in at 502,000 new initial jobless claims, the number marked a slight decrease over the previous week (about 12,000) and continued a recent trend of almost microscopic incremental decreases in the weekly claims over the past month or so. However, the figure is still historically very high – at the depths of the economic crisis earlier this year weekly claims peaked at about 690,000. Moreover, an economics reporter on CNBC noted this morning that the “lower” tally of 502,000 still indicates that every week in the U.S. as many people file for initial unemployment claims as live in a medium sized city like Atlanta, Georgia (population circa 567,000). This is a staggering concept – the idea that each week a medium-sized U.S. city joins the ranks of the unemployed. Yet, this is touted as evidence of economic “improvement.”
Reflecting on this morning’s “improved,” but “disappointing” report President Obama announced that he will convene a “Jobs Summit” in December to explore the means for tackling this seemingly intractable problem of mounting unemployment even in the face of positive GDP (Gross Domestic Product) numbers from the third quarter of 2009. It is unclear from this morning’s announcement who will be invited to Continue reading
Bloomberg | November 25, 2009 | 09:17 EST
Spending by U.S. consumers rebounded in October more than anticipated, an indication that mounting unemployment has yet to stifle American’s willingness to buy. The 0.7 percent increase in purchases was larger than the median estimate of economists surveyed by Bloomberg News and followed a 0.6 percent September drop, Commerce Department figures showed today in Washington. Incomes climbed 0.2 percent, also exceeding expectations. A jobless rate that is projected to exceed 10 percent through the first half of next year means households will probably contribute less to growth as the economy recovers. Nonetheless, retailers such as J.Crew Group Inc. are among companies seeing improving demand heading into the holiday shopping season.
“People have been too negative for too long on the consumer,” said John Herrmann, chief economist at Herrmann Forecasting in Summit, New Jersey, who accurately forecast the gain in spending. “We’re seeing very positive spending signals for November.” A separate report from the Labor Department today showed the number of Americans filing claims for unemployment benefits fell last week to the lowest level since September 2008. Claims declined to 466,000 in the week ended Nov. 21 from 501,000 a week earlier, the report showed. Continue reading
Bloomberg | November 25, 2009 | 00:00 EST
Federal Reserve policy makers said for the first time that their decision to cut interest rates to zero may be fueling undue financial-market speculation even as they called the dollar’s decline ‘orderly.’ The Federal Open Market Committee said its policy of keeping rates low might cause “excessive risk-taking” or an “unanchoring of inflation expectations,” according to minutes of its Nov. 3-4 meeting released yesterday. Central bankers also said further dollar depreciation that might “put significant upward pressure on inflation would bear close watching.” The dollar weakened as investors wagered the central bank will tolerate further declines in a currency that has slid more than 6 percent against the yen in three months. Policy makers are wary of fueling a third asset-price bubble in about a decade as they hold the benchmark interest rate near a record low to revive growth, economists said.
“Financial markets have been doing much better than people might have expected,” said Marvin Goodfriend, a former policy adviser at the Richmond Fed who is now a professor at Carnegie Mellon University in Pittsburgh. “The Fed is saying to markets, ‘Don’t overdo it.’” Fed Chairman Continue reading
Bloomberg | November 25, 2009 | 05:12 EST
The U.K. economy shrank less than previously estimated in the third quarter as consumer spending stopped falling and the service industries slump eased, bringing the longest recession on record closer to an end. Gross domestic product fell 0.3 percent from the previous three months, compared with a prior measurement of a 0.4 percent drop, the Office for National Statistics said today in London. The result matched the median prediction of 28 economists in a Bloomberg News survey. Prime Minister Gordon Brown this week called for stimulus to stay in place to avoid “choking off recovery” as an election looms within six months. The Bank of England has expanded its bond-purchase plan three times since March to ensure Britain’s escape from recession and Governor Mervyn King said yesterday the pickup isn’t “particularly strong.”
“Over the coming quarters the economy will accelerate pretty sharply,” said Nick Kounis, chief European economist at Fortis Bank Nederland NV in Amsterdam and a former U.K. Treasury official. “In third quarter the U.K. was one of the sick men of Europe but it’s going to step up a few gears and will be one of the stronger performers in Europe next year.” The pound erased gains against the dollar and was trading at $1.6702 as of 10:05 a.m. in London. U.K. government bonds extended gains, pushing yields lower. The yield on the 2-year gilt fell 5 basis points to 1.17 percent. Continue reading
ABC News | Tue Nov 24, 2009 | 7:57pm AEDT
It has warned that the global economy is improving but it is still highly vulnerable to shocks such as more loan losses from banks. IMF managing director Dominique Strauss-Kahn has told a conference in London that stimulus spending by governments should be maintained until a global recovery is entrenched. “Exit too soon and you kill the recovery. Exit too late and you sow the seeds for the next crisis,” he said. “This kind of support will have to last some time more until we will be sure that the recovery is firmly established which in our view will happen.” Mr. Strauss-Kahn says high unemployment, large budget deficits and weak household finances make the global economy vulnerable.
“We don’t see a high probability for a double dip but it doesn’t mean it’s a done deal and one of the biggest risks would be to withdraw [stimulus] too early,” he said. Westpac senior international economist Huw McKay thinks a double dip recession in the US is still a possibility. “It is still very much is in the frame. We’re still in a situation where fiscal stimulus is helping activity,” he said. “The challenge for 2010 in the United States is that household balance sheets are very weak,” he said. Mr. McKay says the US banking system is also weak and that is not helping the economy to grow. “We also have the fact that the US banking system is not actually extending credit in a way that is going to be a great help to financing economic recovery,” he said. Continue reading
BBC NEWS | 2009/10/29 | 00:03:07 GMT
America slowly appears to be emerging from recession, rebounding from its worst slump in decades. For many Americans the pain is still dragging on. More than 200 years ago, Slater Mill in Rhode Island helped kick off America’s industrial revolution. For centuries, manufacturing, mainly in textile mills, provided jobs in this small north-eastern state, but not anymore. Rhode Island now has the third highest unemployment rate in the country, after Michigan and Nevada. According to the US Labor Department, the rate of unemployment climbed to 13% in September. This does not come as a surprise to Jon Polis. Each day, he searches for work on his computer and in the local newspaper. He says his eight years working for a medical supplies company was over in eight minutes. He was laid off a year-and-a-half ago. Now his benefits have run out and he is living on his savings. “I can last maybe next March or April,” says Jon. “After that I’ll just have to go to my family and ask for money.” At age 53, this is not the first recession he has lived through, but it is the worst. “I’ve been out of work a few months here or there but never like this,” he says. Continue reading
BBC NEWS | 2009/11/18 | 14:21:13 GMT
The construction of new homes and apartments in the US showed a surprise fall in October. New US housing starts tumbled 10.6% to an annual rate of 529,000 homes – the lowest level since April. The decline in construction was led by a fall in demand for both single-family and multi-family occupancies. Separately, a report showed prices edging up in October. The consumer price index rose 0.3%, pushed up by higher energy prices.
‘A weak number’
The housing figures are a blow to recent signs of recovery in the market. David Resler from Nomura Securities in New York said they were “really disappointing.” “I had convinced myself that we had turned the corner on housing,” he added. “I am no longer convinced. This is really a quite weak number.” Congress has voted to extend a tax credit of up to $8,000 for first-time buyers. It had been due to expire at the end of November. Some analysts said that the uncertainty over whether it would be renewed could have held back construction. Continue reading