The US Labor Department was to release yesterday a report that was expected to show the biggest monthly jobs loss in 26 years, piling more pressure on the Federal Reserve to slash rates again and adding urgency to an automaker bailout as the global economic crisis deepens.
After bolting to a 14-year high of 6.5 percent in October, the unemployment rate likely climbed to 6.8 percent last month, according to economists’ forecasts. If they are right, that would mark the worst showing in 15 years.
Skittish employers, which have slashed 1.2 million jobs this year alone, probably cut another 320,000 last month, economists forecast.
If that estimate is correct, it would represent the deepest cut to monthly payrolls since October 2001, when the economy was suffering through a recession following the Sept. 11 terrorist attacks.
Investors have been nervous about the fate of the cash-starved US auto industry, the failure of which would hit a chain of parts suppliers and financiers that spans the world.
“Concerns have spread that financial institutions, including Japanese ones, wouldn’t be able to escape unscathed if big US automakers were to go bankrupt,” said Tsuyoshi Segawa, an equity strategist at Shinko Securities in Tokyo. “We have no idea where and what could happen if a huge corporation like them failed.”
Other firms such as US phone company AT&T Inc, Swiss bank Credit Suisse and Japanese brokerage Nomura Holdings Inc were already cutting their work force by thousands, bracing for a long and hard global recession.
Ahead of the latest employment data, dealers priced in a three-in-five chance Fed would cut rates by 75 basis points to 0.25 percent on Dec. 16.
US Fed Chairman Ben Bernanke is exploring other economic revival options and wants the government to step up efforts to curb home foreclosures. Treasury Secretary Henry Paulson, the overseer of a US$700 billion financial bailout program, is also weighing new initiatives, even as his remaining days in office are numbered.
Central banks throughout Europe and Asia have slashed rates aggressively this week, with other more radical actions expected, as policymakers raced to stabilize financial markets and stop deflationary forces from getting further out of control.
The European Central Bank dropped its benchmark rate by 0.75 percentage point to 2.5 percent, the eurozone’s biggest cut ever.
Sweden lopped a record 1.75 percentage points off its policy rate to 2.0 percent, while the Bank of England chopped rates by 1 percentage point to 2 percent, the lowest level since 1951.
In addition to slashing borrowing costs, central bankers have been considering more direct actions to protect their economies. After cutting rates, the Bank of England is mulling buying up government debt and flooding markets with cheap cash to prevent a more severe recession, an unsourced report from the Daily Telegraph newspaper said.
Governments were trying to align their efforts with the deluge of central bank rate cuts.
South Korean officials said that if needed more help was on the way to the economy and financial markets.
“Aggressive countermeasures are required for the automobile, semiconductor and petrochemical sectors due to a rapid decline in export demand, falling export prices, an intensifying global competition and a supply glut,” the Ministry of Knowledge Economy said in a report.
France announced a 26 billion euro (US$32.9 billion) stimulus plan targeting infrastructure and investment projects for its faltering economy as data showed the unemployment rate rose in the third quarter to 7.7 percent..
Time was of the essence though, as economic data globally reflected rapidly worsening conditions.
“I believe we could lose General Motors by the end of this month,” Ron Gettelfinger, president of the United Auto Workers told lawmakers. “Honestly, we’re down to the wire.”
ANNOUNCEMENT: People who do not comply with the ban after a spoken warning would be reported to the police, the airport company said on Friday Taoyuan International Airport Corp on Friday announced that riding on vehicles, including scooter-suitcases (also known as “scootcases”), bicycles, scooters and skateboards, is prohibited in the airport’s terminals. Those using such vehicles should manually pull them or place them on luggage trolleys, the company said in a Facebook post. The ban intends to maintain order and protect travelers’ safety, as the airport often sees large crowds of people, it said, adding that it has stepped up publicity for the regulation, and those who do not comply after a spoken warning would be reported to the police. The company yesterday said that
QUIET START: Nearly a week after applications opened, agencies did not announce or promote the program, nor did they explain how it differed from other visitor visas Taiwan has launched a six-month “digital nomad visitor visa” program for foreign nationals from its list of visa-exempt countries who meet financial eligibility criteria and provide proof of work contracts. To apply, foreign nationals must either provide proof that they have obtained a digital nomad visa issued by another country or demonstrate earnings based on age brackets, the Bureau of Consular Affairs said. Applicants aged 20 to 29 must show they earned an annual salary of at least US$20,000 or its equivalent in one of the past two years, while those aged 30 or older must provide proof they earned US$40,000 in
NEW YEAR’S ADDRESS: ‘No matter what threats and challenges Taiwan faces, democracy is the only path,’ William Lai said, urging progress ‘without looking back’ President William Lai (賴清德) yesterday urged parties across the political divide to democratically resolve conflicts that have plagued domestic politics within Taiwan’s constitutional system. In his first New Year’s Day address since becoming president on May 20 last year, Lai touched on several issues, including economic and security challenges, but a key emphasis was on the partisan wrangling that has characterized his first seven months in office. Taiwan has transformed from authoritarianism into today’s democracy and that democracy is the future, Lai said. “No matter what threats and challenges Taiwan faces, democracy is the only path for Taiwan,” he said. “The only choice
UNITY MESSAGE: Rather than focusing on what Trump said on the campaign trail about Taiwan, Taipei should be willing to engage with the US, Pompeo said Taiwan plays a key role in Washington’s model of deterrence against China, former US secretary of state Mike Pompeo said in a speech in Taipei yesterday. During US president-elect Donald Trump’s first term, “we had developed what we believe was a pretty effective model of deterrence against adversaries who wanted to undermine the set of rules and values that the people of Taiwan and the people of the US hold dear,” Pompeo said at a forum organized by the Formosa Republican Association. “Succeeding in continuing to build this model will not solely rest at the feet of president Trump and his team,
RSS