Browsing all articles tagged with unemployment
Jun
1

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.

May
25

German Economy to Pick up Although Fall Short of Traditional Pace

Germany’s economy will recuperate from a bout of winter weakness however fall well short of the dynamic growth rates of previous years as euro zone recession and global slowdown stunt investment and exports.

There are homegrown problems too. What hue of government will result from September elections is injecting doubts and foreign investors cite worries regarding over-regulation and Germany’s future energy mix after Chancellor Angela Merkel turned her back on nuclear power.

Europe’s paymaster was long flexible to the euro debt crisis but contracted at the end of previous year and only eked out meager growth in the first quarter.

The Bundesbank stated this week a solid second quarter recovery was in prospect. Construction is expected to bounce back following a harsh winter and private consumption will grow thanks to low unemployment inflation-busting wage boost and low interest rates.

Although even the government forecasts just 0.5 percent growth in 2013 and economists doubt German companies will start investing heavily in the short term.

Christoph Schmidt, head of the German Council of Economic Experts, nobody expects strong growth for this year now particularly as the first quarter was so sobering, advisors to the government known as the wise men.

The economy grew just 0.1 percent in the first quarter following shrinking 0.7 percent in the previous three months of 2012.

Schmidt said trade will not contribute much, it could even drag on growth so that leaves domestic demand, private consumption is comparatively stable however investments are restrained and the key question will be when and how much they pick up.

May
25

Budget Cuts Mean Furlough Friday at Four Federal Agencies

Across the board budget cuts have shaped Furlough Friday in Washington and somewhere else because the one day closing of four federal agencies forced an unpaid day off for 115,000 workers.

Employees at the Environmental Protection Agency, the Department of Urban Development and Housing, the office of Management and the Internal Revenue Service and Budget stayed home on Friday.

According to Cory Bythrow, communications director at the National Federation of Federal Employees, a union representing government workers. The unemployment affects about 5 percent of the federal workforce. Bythrow tracks workplace fallout from the budget cuts that are known as sequestration.

Bythrow said eighty-five percent of the workers who were furloughed on Friday are based outside Washington. They include union and non-union employees, depending largely on where they are.

The layoff come as the United States heads into a holiday weekend, with Memorial Day celebrated on Monday, when government offices will be closed.

A Washington Post poll released on Friday found 37 percent of Americans feel confiscation has hurt them personally, up from 25 percent in March. Almost half of those affected say the harm to them has been major.

May
18

French President Urges Euro Zone Government

Francois Hollande, French President called on Thursday for an economic government for the euro zone with its own budget the right to borrow a harmonized tax system and a full time president.

At a 150 minute news discussion marking his first year in office a day following economic statistics showed France had fall into recession, the Socialist leader defended his record on economic reform and budget regulation and informed the French people they would have to work a bit longer for a complete pension in future.

Rebutting criticism that France has lost its leadership role in Europe as of its dwindling economic competitiveness, Hollande thought he wanted to create a fully-fledged political European Union within two years.

Hollande said it is my responsibility as the leader of a founder member of the European Union to pull Europe out of this torpor that has gripped it and to reduce people’s disappointment with it.

He accepted that he could face resistance from Germany, Europe’s dominant power, which opposes mutualising debt between member states. Berlin is also reluctant to give the euro zone its own secretariat for fear of deepening division in the EU, among the 17 members of the single currency and the 10 others.

Non-euro Britain’s government previously faces growing domestic pressure to hold a referendum on leaving the bloc.

Hollande stated he wanted Britain to stay in the EU but added, he can understand that others don’t want to join the single currency, however they cannot stop the euro zone from advancing.

Hollande said a future euro zone economic government would debate the main economic and political decisions to be taken by member states, harmonize welfare policies and national fiscal and launch a battle against tax fraud.

He proposed bringing forward planned EU spending to combat record youth unemployment, pushing for an EU-wide transition to renewable energy sources and envisaged a budget capacity that would be decided to the euro zone along with the gradual likelihood of raising debt.

May
4

ECB Cuts Interest Rates, Open to Further Action

The European Central Bank cut interest rates for the first time in 10 months on Thursday and held out the likelihood of further policy action to hold up the recession hit euro zone economy.

Responding to a fall in euro zone inflation well below its target level and growing unemployment, the ECB lowered its main rate by a quarter percentage point to a record low 0.50 percent.

Mario Draghi, ECB President promising to provide as much liquidity as euro zone banks require well into coming year and to help smaller companies get access to credit, also indicated that some policymakers had pushed for a bigger cut.

He told a news conference after the ECB’s Governing Council met in Bratislava, there was a very, very strong existing consensus towards an interest rate cut. Within that, there was a prevailing consensus for a cut of only 25 basis points.

The ECB was also technically prepared to cut its deposit rate from the current zero percent into negative territory, meaning it would begin charging banks for holding their money overnight.

Such a move could encourage the banks to lend out money rather than hold it at the ECB, although it would also almost certainly have a big impact on banks own operations and major implications for funding and bond markets.

Draghi said the ECB could cope with these, a departure from his prior statements.

There are several unintentional consequences that may stem from this measure, we will address and cope with these consequences if we make a decision to act. And we will again look at this with an open mind and we placed ready to act if needed.

Acknowledging that, the ECB stated it would prime banks with as much liquidity as they need until at least July 2014 and look at ways to enhance lending to smaller companies, which are the lifeblood of Europe’s economies however have been starved of credit in many countries.

May
4

Job Market Resilience Eases Growth Concerns

Employment rose at a quicker pace than expected in April and hiring was much stronger than formerly thought in the prior two months, a sign of flexibility that should help the economy absorb the blow from belt tightening in Washington.

Labor Department said on Friday,non-farm payrolls increased by 165,000 jobs previous month and the unemployment rate dropped to 7.5 percent, the lowest level since December 2008. The job counts for February and March were revised up by a net 114,000.

Scott Anderson, chief economist at Bank of the West in San Francisco said that this boosts the case that the US economy will be able to survive the joint headwinds of sequestration and a deepening recession in Europe.

Investors on Wall Street cheered the statistics, which beat economists’ expectations for a 145,000 jobs advance and a steady 7.6 percent reading on the unemployment rate.

US stocks rallied, with the Dow Jones industrial average and the Standard & Poor’s 500 index closing at record highs. The US dollar vaulted to a one week high against the yen, however Treasury debt prices tumbled.

Payrolls climbed by 138,000 jobs in March, 50,000 more than formerly reported, and job growth for February was revised up by 64,000 to 332,000, the largest growth since May 2010.

However the gains previous month were far below the 206,000 jobs per month average of the first quarter, the newest evidence the economy is cooling even if not as rapidly as earlier feared.

Construction employment dropped for the first time since May and manufacturing payrolls were flat. The length of the average workweek pulled off a nine  month high and a gauge of the overall work effort knock down.

Economists pin the slowdown mainly on higher taxes that took hold at the start of the year and $85 billion in federal government spending cuts known as the sequester, that went into effect at the start of March. Economies overseas have also weakened cutting into US export growth.

However the US economy grew at a 2.5 percent annual pace in the first quarter, statistics on construction spending, retail sales and trade suggested it ended the period with less speed.

May
4

Precious Metal Ends Lower, Copper jumps 7% on US Jobs Data

Yellow metal futures finished with a modest loss on Friday as greater than expected US employment numbers dulled the gold’s safe-haven appeal.

For the week, bullion found support from the European Central Bank’s decision to cut interest rates and from strength in physical demand to end the week 0.7% advanced.

Precious metal for June delivery chop down $3.40 or 0.2%, to settle at $1,464.20 per ounce on the Comex division of the New York Mercantile Exchange.

Labor Department said on Friday that the US economy created a net 165,000 jobs in April. The figure surpassed the 135,000 prediction of economists. The rushing in hiring nudged the unemployment rate down to 7.5%, the lowest level since December 2008.

Right before the data’s release yellow metal prices were trading about $13 per ounce higher than Thursday’s close, then following the figures they fell to trade around $10 lower.

Copper futures rallied almost 7% for their biggest one day percent advance in over two and a half years, as the jobs statistics brightened demand prospects for the industrial metal.

The July silver contract added 18 cents, or 0.8%, to end at $24.01 per ounce, climbed 1% from a week ago.

Chintan Karnani, an independent bullion analyst based in New Delhi said that if hiring continues to increase at the current pace for the coming two to three months that would be bearish for safe havens like silver and gold.

He further said only the interest rate cut by the European Central Bank and firm physical gold demand in Asia are supporting gold prices.

Gold dealers reported impressive jumps in April precious metal sales.

Will Rhind, managing director of ETF Securities, a provider of physically backed gold ETFs including the ETFS Gold Trust stated request is mainly being seen by coin/bar merchants and gold dealers (bullion banks) that act on behalf of central banks and other great institutional physical players.

Copper for delivery in July jumped 21 cents or 6.8% to a three-week high of $3.315 a pound. It rose approximately 4% for the week.

 

Apr
9

Banking Union a Priority For Lew in Europe

Europe’s economic weakness and financial disorder affect the US economy, Jack Lew, US Treasury Secretary told EU leaders on Monday, stressing the require to enhanced demand and move ahead with a euro zone banking union.

There economy’s strength remains sensitive to events beyond our shores and they have an huge stake in Europe’s health and stability, Lew informed reporters following talks with European Union leaders including European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso.

Lew further said in this circumstance he was particularly interested in their European partners plans to strengthen sources of demand at a time of growing unemployment, EU forecasts indicate the largest trading partner of the United States will remain in recession for the second year in a row this year.

Lew’s visit also comes shortly following messy negotiations among the euro zone, the Cyprus and International Monetary Fund on a bailout for the Mediterranean island, which in the end forced losses on large Cypriot bank depositors.

In his talks with Van Rompuy and Barroso, Lew highlight the significance of the euro zone moving ahead with plans for a banking union which will engaged handing over supervision to the European Central Bank and drafting bank resolution laws.

This would permit the 17-nation bloc to handle troubles like the resolution of banks in Cyprus more efficiently. Senior EU official said that they discussed the banking union a bit more than other things the Americans are keen for the process to move forward.

The surprise levy on bank deposits over 100,000 euros in Cyprus agreed as part of the country’s bailout has spoiled confidence that Europe will be united in tackling bank problems rather than leaving countries to struggle alone.

If anything, this crisis and recent events in Cyprus have exposed the absolute need to anchor, once and for all a logical scheme that would allow resolving failing financial institutions in an effective, consistent manner and predictable across the European Union.

Apr
2

Gold Extend Additions Because Weak US Statistics Hits dollar

Yellow metal extended addition’s on Tuesday because the US dollar dropped following weaker than expected US manufacturing statistics suggested the world’s leading economy lost some momentum at the end of the first quarter.

Jeffrey Wright, managing director at Global Hunter Securities said that currently precious metal is finding support from the feeble ISM manufacturing report.

He further said that the GHS suppose prices will float around the $1,600 level in expectation of Friday’s US employment report.

The rate of unemployment has now taken on superior importance with a target at 6.5%, because to when the Federal Open Market Committee restrain quantitative-easing measures, the precious metal market will be looking very closely at the matter of unemployment numbers.

Precious metal added $2.34 per ounce to $1,600.74 by 0026 GMT as the US statistics spurred safe haven buying. It rallied to a 1 month high in March on concerns regarding fiscal stability in Europe following the European Union gave Cyprus an ultimatum to lift billions of euros it needs to clinch a bailout deal. US gold for June was stable at $1,601.70 per ounce.

Statistics on Monday demonstrate that the swiftness of production production and sales at US manufacturers sluggish in March. The Institute for Supply Management’s survey of senior executives knock down to 51.3% from 54.2% in February.

Bullion vault, an online physical silver and gold market for individual investors stated its Gold Investor Index fall to 53.3 in March from 54.4 in February, marking a third following monthly turn down. The March statistics was the weakest reading since previous September.

Gold future for June delivery added $5.20 per ounce or 0.3%, to settle at $1,600.90 per ounce on the Comex division of the New York Mercantile Exchange. The Prices knock down 0.7% on Thursday to $1,595.70 per ounce.

Mar
22

Easy Federal Reserve Softens Fiscal Policy Strike On Economy

According to economists who have been scrambling to raise their growth forecasts, the Fed ‘s aggressive easing of monetary policy is demonstrating unexpectedly effective at blunting the blow to the US economy from tighter fiscal policy.

Economists had feared deep government spending cuts and higher taxes would exploit growth in the first quarter, however a series of strong economic data has so far proven them wrong. And they principally blame the Fed.

Tom Higgins, global macro strategist at Standish Mellon Asset Management in Boston said that the monetary policy is launch to gain some traction here.

According to Higgins, if it were not for the monetary incentive the economy would perhaps facing growth of a 1 percent annual rate or less, he anticipate growth to come in at a 2.5 percent pace in the first quarter.

The US central bank has held overnight interest rates near zero since December 2008 and has pushed around $2.5 trillion into the economy by acquiring mortgage-backed bonds and Treasury debt in a bid to promote faster growth and decreasing unemployment.

On Wednesday, it recommitted to plans to buy $85 billion worth of bonds each month and stated it would keep buying assets until it sees a considerable improvement in the labor market.

These activities have assist to put the economy in better shape to compact with the end of a 2 percent payroll tax cut, higher tax rates for rich Americans and $85 billion in across-the-board government spending cuts which is known as the sequester.

The easy money position has given a increase to interest rate sensitive sectors of the economy, such as housing and autos.

The vowed to easy policy also emerges to be lifting business confidence, which in turn is underpinning stock market and the job growth. Non-farm payrolls augmented 236,000 in February and the jobless rate knock down to a four-year low of 7.7 percent.