Economic Power

U.S. Unemployment Down, Oil Prices Up

2011-12-27T20:15:00.000-08:00

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Oil prices continued rising in a fourth day on the New York Mercantile Exchange, Thursday (22/12/2011) local time along with the decline in applications for unemployment benefits in the U.S. to the lowest of three years and U.S. index indicates economic growth will be quick.

West Texas Intermediate oil prices rose 86 cents to 99.53 dollars a barrel on the Nymex on Thursday. This is the highest price since December 13 last. Meanwhile, Brent oil for determination of February rose 18 cents to 107.89 dollars per barrel on the ICE Futures Europe exchange in London. "We are on an upward trend and can develop further," said Tom Bentz, director of BNP Paribas Prime Brokerage Inc. in New York on Thursday.

He said the amount of oil supply shock many people on Wednesday. Where, Energy Department report said the U.S. oil supply experienced the biggest drop in a decade last week. The decline was also led to a rally of oil (long hikes).

Indeed, the report showed jobless claims fell 4,000 to 364,000 last week. And, a number of key indicators related to unemployment was more than forecast last month.

Kian lifting oil prices are also influenced by what was reported by a research institute based in New York. They said the Conference Board's index to the prospect of three to six months ahead rose 0.5 percent after rising by 0.9 percent in October. In fact, the survey only estimated Bloomberg index increase by 0.3 percent.

OECD: Global Economy Struggling Overcome Debt

2011-12-23T20:59:00.000-08:00

The survey of an international economic organizations and the government estimates, the market will face an uphill battle in overcoming financial problems next year. The difficulty was triggered by uncertainty about resolving the debt crisis in the eurozone and the global economy in general.

Assessment was expressed by a report of a survey team Organisation of Economic Cooperation and Development (OECD). According to Reuters, the essence of their reports are published daily in The Financial Times, December 12, 2011.

The OECD consists of 34 countries with advanced economies spearheaded a number of countries, like USA, Japan, Britain, France, Italy, Canada and Germany. However, those countries in recent years of economic difficulties.

Report of the OECD states that the possibility of continued financial pressures, coupled with uncertainty in the market, thus threatening the stability of many countries are struggling to pay their debts.

"The events in the market is likely to reflect a situation where the instinct to dominate the dynamics of the market, thus boosting lending rates which have serious consequences for the resilience of the country's debt," said Harris Blommestein, chairman of the management of public debt in the OECD.

The report estimates that OECD countries will face a huge challenge to raise the volume in the private market. This could be a problem for many governments and economic stability.

According to the OECD, the level of borrowing countries in 2011 could be the group amounted to U.S. $ 10.4 trillion. Next year, the number will rise to U.S. $ 10.5 trillion, or U.S. $ 1 trillion larger than 2007 and nearly doubled from 2005 levels.

Wall Street Potential to Negative Zone

2011-12-14T08:07:00.000-08:00

Wall Street could potentially be weakened in trading wednesday (14/12) with a rise in the dollar to its highest level in 11 months.

European stocks fell with the assessment of European investors that the ratings will go down in the near future. Factor solution debt crisis is still hard to find until now. European exchanges such as the FTSE moves flushed down 1.04%, the DAX fell 1.2% and CAC down 1.7%. Quoting the yahoofinance.com.

The index will be moved heavy equipment maker Caterpillar shares that will sell some Bucyrus businesses distribution with colleagues from Malaysia. Shares of Morgan Stanley who will disburse U.S. $ 700 million to build a mega real estate.

Shares of Avon Products is seeking a new CEO to replace Andrea Jung. Fiat shares which would predict a profit of U.S. $ 3 billion in 2012 from the U.S. Chrysler unit.

The European Crisis More Serious

2011-12-14T07:56:00.000-08:00

The results of the EU summit was not making the company's debt rating agency believes the crisis will be overcome. Instead, they plan to cut its debt rating of Germany and France, two of Europe's economic motor.

Moody's Investors Service is not the Fed. But the statement that flung as effective as America's central bank. As it happens this Tuesday (13/12), the world stock immediately dipped after the debt ratings agency said it would evaluate the entire debt of European countries during the first quarter of 2012.

Moody's also stated that the agreement about EU budget discipline will not be able to overcome the crisis. The statement makes the situation in Europe again tense.

The situation is getting worse after Standard & Poor's also issued a statement saying it would cut the debt ratings of Germany, France, and 13 other European countries. In fact, the success or failure of efforts to overcome the crisis depends on the support of investors, central banks, and the company's debt rating agencies.

Well, if Germany and France's debt rating cut, analysts believe the crisis in Europe will be heavier. Bad news from Moody's and Standard & Poor's eventually affected the whole world.

World Economic Outlook 2011 and 2012 from IMF

2011-12-08T16:57:00.001-08:00

International Monetary Fund (IMF) cut its global economic growth forecasts and predict the emergence of a severe impact if Europe fails to resolve its debt crisis or the U.S fiscal policy plans at a stalemate.

Prediction of the world body was conveyed in the World Economic Outlook report as quoted by Bloomberg last month.

The IMF estimates the growth of world economy will grow 4 percent in 2011 and 2012, lower than previous forecasts issued in June 2011, namely by 4.3 percent and 4.5 percent in 2012.

While U.S. economic growth will shrink from the previous estimate of 2.5 percent to 1.5 percent.

"Global activity weakened and increasingly uncertain, the trust has collapsed and the growing downside risks," the IMF said in a report.

The IMF hopes the country's leaders should hold the principle to take any steps to maintain confidence in the policy of his country and Europe.

IMF Managing Director Christine Lagarde last week's encouraging policy makers around the world to seek settlement of collective remembering investors have started to worry about the bankruptcy of Greece and Bank of Greece was forced to lose money by selling bonds in the region that has the largest debt condition. Outside of alternative scenarios of economic growth, Europe and the U.S. is expected to enter recession.

Financial institution based in Washington say the U.S. is his latest report is expected to see the latest economic activity in several developed countries and strong growth of developing countries. Economic conditions requires policy makers in the euro area economy run through the mechanism of handling the bailout approved last July.

Financial markets

The IMF report also estimates the level of volatility in financial markets that will not worsen and the authorities in the U.S. who have agreed to run a fiscal plan will support the economic and fiscal consolidation in the medium term.

"The main factor of economic activity is stronger in the short term include improved activity in Japan, the decline in crude oil and food prices, and strong growth in demand from developing countries," the IMF said.

IMF expects economic growth of developing economies in the region reached 6.4 percent this year and 6.1 percent next year. It fell from the previous prediction of 6.6 percent and 6.4 percent.

Rich countries would likely just economic growth 1.6 percent, down from its previous forecast in June by 2.2 percent. While next year is expected to grow only 1.9 percent from 2.6 percent previously.

Japan is one of the members of the G7 are experiencing the biggest revision of economic growth that is only 0.5 percent from 0.7 percent previously. While in 2012, grew only 2.3 percent, down 0.6 percent from previous estimates.

European region

In the European region, the IMF estimates that economic growth is only about 1.6 percent from the previous 2 percent. While next year will grow only 1.1 percent. "Bank capital injections and restructuring or closing of the banks is essential," the IMF said.

European Central Bank (ECB) is also proposed to lower interest rates if you want to risk the economic growth is reduced. Currently the ECB set the interest rate of 1.5 percent.

In a scenario of lower growth economy, the IMF assumed the bank must absorb the loss with the impact of capital reduction by 10 percent

Missing Parts of the U.S. Economy

2011-09-23T23:14:00.000-07:00

Works, a unit of workers, politicians and economists in the U.S. a few years away. They all switched to China. What causes it?

The reason was simple, the disparities are much lower cost. Just imagine, when the U.S manufacturing sector workers are paid U.S. $ 50 per hour, including benefits and wages, the workers at the Chinese factory only requires a few hundred dollars more per month, to do the same thing.

No wonder when U.S. companies moved operations to China and a global company like the China made goods are cheaper.

According to the Economic Policy Institute (EPI), the United States in the last decade has even lost 2.8 million jobs.

More than ten years ago, U.S. imports from China have been growing more than that can be exported. This causes a very large job losses. "Between 2001 and 2010, the trade deficit with China to reduce 2.8 million jobs," EPI said in a report released this month.

As many as 1.9 million jobs, or nearly 70% of it engaged in the manufacturing sector. The biggest losses occurred in computer and electronic components industry. As well as some finished goods from the sectors of clothing, motor vehicles and units.

China could have a production cost advantage, by moving millions of workers from rural areas to cities with new facilities built. Even American companies like Walmart can not afford to buy goods made in the U.S, when China made goods are much more efficient and of course, much cheaper.

Cheap labor may be the main reason for China's manufacturing advantages, but the manipulation of currencies other means. While labor costs affect China's exports, currency manipulation which distorts the import occurs. Although China joined the World Trade Organization in 2001.

On the other hand, American policymakers have long predicted, with the rising middle classes of China, U.S. companies selling to new customers will also grow. But it did not go according to expectations.

As a result of China's currency manipulation and trade distorting practices, including the continuation of subsidies, barriers to legal and illegal imports, dumping and the suppression of wages and workers' rights, the flow of U.S. exports to China did not happen "Plus the advantage of labor costs, currency manipulation this money has destroyed many U.S. companies."

EPI study did not make an exact estimate of how many American jobs might be lost, because the cost advantage of Chinese manufacturing and trade policies in question.

And losses, of course, does not suddenly end in 2010, but continued to take place. In fact, nearly half a million jobs were lost or misplaced in 2008-2010.

U.S. unemployment problem is so severe, so any additional erosion in the employment of external factors, will make the U.S. economic recovery more difficult.

Are U.S Get Bankrupt?

2011-09-18T10:21:00.000-07:00

A total of 2.6 million people the U.S. poor fell in 2010, bringing the total of country's poor people achieve 46.2 million people. That figure is not only bleak, but also scored highest record.

Based on U.S. Census Bureau, the poverty rate was the highest in 52 years this institution is to collect data. In fact, the influx of middle- class households fell into the same level as 1996. Once adjusted, it turns out that the lowest figure since the Great Depression.

"America is actually facing a lost decade. We believe, America a good place for all generations. But now, we are witnessing the worst period for the family since the mid 1990s," said Lecturer of Economics at Harvard University, Lawrence Katz.

The findings of this bureau is worse than the predictions of economists, though more wide- open eyes about what really felt the pressure of the American population. Not only the poor, the middle class was now choking.

The report states, the number of Americans living below the poverty line by 2010 reached 15.1% and the highest level since 1993. The poverty line for 2010 for American families with four members are revenues of U.S. $ 22,314 or down, per year.

Coinciding with the release of this report, President Barack Obama is pushing for the bill passed parliament regarding employment. With numbers that bad, Obama seems to have to try harder and faster. Moreover, the opposition prepared to oppose it.

"It could be bad news the economy again. This adds a heavy burden of government," said the director of the Center on Children and Families at the Brookings Institution, Ron Haskins.

The last decade, America is also facing increasingly wide gap between high and low income. Middle- income households for the 10 lowest income, down 12 % from its peak in 1999.

While the top 90 was down just 1.5% only. Overall, inflation adjusted middle-class income fell 2.3 % by 2010 from a year earlier to U.S. $ 49,445. That figure is 7% lower than its peak, U.S. $ 53,252 in 1999. Some fell as the size of the shrinking American family.

The economists feel, this year was no better. Stimulus funds are exhausted, the central and local governments to reduce the number of staff and budget for social programs. Steps should be taken to avoid more and more people into poverty.

Masyarat minority of Americans who are most affected. Most black people poor, 27% or an increase of two percent from the 2009 figure. The poor Hispanics increased from 25% to 26%. Whites, 9.9% from 9.4 % and Asia remained at 12.1%.

Analysis of the Brookings Institution estimates that, at the current pace, the recession will cause 10 million more people become poor in the middle of this decade. Unemployment is the biggest problem that causes people to become poor.

"Last year, 48 million people aged 18-64 do not work, even for a week in a year. The number was up from 45 million in 2009. So you do not work, would be difficult to get a job again," said Trudi Renwick, Census Bureau worker.

While Lecturer of Public Policy at the University of Michigan Sheldon Danziger stated, this problem is also hitting hard the people who do not have a college degree. "Especially men middle-class full-time workers who do not make progress in his work."

The recession also forced the population of productive age (25-34 years) were forced to live with family and friends to save. In this group, almost half live below the poverty line. Poverty line for single people under 65 years is U.S. $ 11,344.