Browsing all articles tagged with Economists

Record Unemployment Low Inflation Highlight Europe’s Pain

Unemployment has reached a new high in the euro zone and inflation remains well beneath the European Central Bank’s target, pacing pressure on EU leaders and the ECB for action to stimulate the bloc’s sickly economy.

Joblessness in the 17 nation currency area climbed to 12.2 percent in April, EU statistics office Eurostat stated on Friday spoting a new record since the data series began in 1995.

With the euro zone in its greatest recession since its creation in 1999, consumer price inflation was far lower the ECB’s target of just below 2 percent, coming in at 1.4 percent in May slightly higher then April’s 1.2 percent rate.

That augment may quieten concerns regarding deflation, however the deepening unemployment crisis is a threat to the social fabric of the euro zone. Almost two-thirds of young Greeks are not capable to find work exemplifying southern Europe’s lost generation.

Policymakers and economists including Germany’s finance minister Wolfgang Schaeuble have stated the greatest menace to the unity of the euro zone is now social collapse from the crisis, rather than market-driven factors.

In France, Europe’s second biggest economy, the number of jobless rose to a record in April while in Italy the unemployment rate hit its highest level in at least 36 years, with 40 percent of young people out of work.

Thousands of demonstrators from the anti-capitalist Blockupy movement cut off access to the ECB in Frankfurt on Friday to protest against policymakers handling of Europe’s debt crisis.

Some economists suppose the ECB, which meets on June 6 will have to go beyond an additional interest rate cut and consider a US style money printing program to breathe life into the economy.

Nick Matthews, a senior economist at Nomura International in London said we do not expect a strong recovery in the euro zone. It puts pressure on the ECB to deliver even more conventional and non conventional measures.


Bank of Cyprus Controls To Previous Month, Minister Says

Bank of Cyprus conceded on Thursday that firmed capital controls would remain in force greater than expected as the island’s banks reopened for the first time following the government was forced to believe a hashed EU rescue package to prevent bankruptcy.

Cypriots lined up peacefully to withdraw partial amounts of cash, however there was no symbol of a run on deposits, as had been frightened.

Banks were shut for almost two weeks as the government discussed a 10 billion euro which is equal to $13 billion international bailout, the first in Euro zone to enforced losses on bank depositors.

Ioannis Kasoulides, Foreign Minister stated curbs on money arrangements imposed following the bailout would be phased out over regarding a month.

A number of restrictions will be lifted and steadily, most likely over a period of about a month according to the estimation of the central bank, the limits will be fully lifted.

Government primarily stated the controls would remain in place for a week subject to reassess. Economists say they will prove hard to boost as long as the economy is in crisis.

A lot of money had already missing electronically. Statistics published by the Central Bank of Cyprus illustrate that savers from other euro zone countries withdrew 18 percent of their deposits from the suffering island in February, as talk of a tax on bank accounts added ground. Overall private sector bank deposits in Cyprus knock down by 2.2 percent to 46.4 billion euros previous month, following a similar slump in January.

To assist the Cyprus banks conditions the crisis, the ECB flew in 5 billion euros which is equals to $6.4 billion in cash overnight from Frankfurt.

Government said it had appointed a board to investigate the banking meltdown and look into assert of junior bondholders.

Constantinos Petrides, under secretary to the Cypriot president said that it will have a broad mandate. It will investigate criminal, political and civil responsibilities.


Jobs statistics Are Far Worse Than They Look, Economists Shocked

Economists were shocked by the enormous beat in Friday’s reported job figures. The unemployment rate plunged 0.2 percentage points to 7.7% and the economy purportedly added 236,000 jobs.

According to the household inspection on which the unemployment rate is based the economy added a strong 170,000 jobs. The survey also illustrate a marvelous boost of 446,000 part time jobs.

A Gallup survey on jobs released on Thursday illustrate the percentage of workers working part time however wanting permanent work was 10.1% in February, a boost from 9.6% in January and the greatest rate measured since January 2012.

Gallup survey notes though fewer people are unemployed now than previous year, they are not transfered to permanent jobs for an employer. In reality, fewer Americans are working permanent for an employer than were performing so previous year and more Americans are working part time.

While part time work is obviously better than no work at all, these are not the sort of good jobs that millions of Americans are still penetrating for.

During the previous month there was a rush of 679,000 in the amount of people working multiple jobs. The seasonally adjusted boost was 340,000.

One can preserve the statistics two ways. Either the economy is getting healthier and more jobs are available, or people are working more jobs as their hours were cut and they need an additional job.


President Barack Obama And Senate Leaders to Construct Last Channel of Fiscal cliff Effort

US congressional leaders and Barack Obama agreed on Friday to make a last effort to prevent the United States to over coming the fiscal cliff, setting off strong bargaining regarding Americans tax rates as a New Year’s deadline looms.

Days left to prevent steep spending cuts and tax hikes that could originate a recession, two Senate veterans will try to build a deal that has avoid the Congress and White House for months.

Obama stated he was discreetly optimistic an agreement could be found. However neither side appeared to give much space at a White House conference of congressional leaders on Friday.

He further stated that the American people are not going to have any tolerance for a politically self inflicted wound to our economy,the Congressional Budget Office has stated that if Congress does not act the spending changes and tax might cause a recession in the first half of 2013.

Obama told reporters that the hour for instant action is here. They are now at the point where in just four days, every American’s tax rates are scheduled to increased by law. Every American’s paycheck will get significantly smaller.

A total of $600 billion in tax climb and routine cuts to government spending will create kicking in on Tuesday New Year’s Day if politicians cannot reach a deal. Economists fear the measures will push the US economy into a recession.

A core of fiscal conservatives there strongly opposes Obama’s efforts to elevate taxes for the wealthiest as part of a plan to close America’s budget deficit. House Republicans also want to observe Obama commit to major spending cuts.

Meeting among Obama and Republican House Speaker John Boehner collapsed previous week when several dozen Republicans defied their leader and rejected a plan to raise rates for those earning $1 million or more.